The Senate has summoned the Minister of Power, Works and Housing, Babatunde Fashola, over grave allegations of monumental fraud in the Ministry.
The minister is to appear before the Senate Committees on Public Accounts and Power to diversion of $350 million from the Nigerian Sovereign Investment Authority (NSIA) by his Ministry, give a detailed account in terms of public funds spent on the Fast Power Projects (Afam Fast Power Project in particular) and evidence of feasibility study indicating the viability of the projects.
The Chairman, Senate Committee on Public Accounts, Senator Matthew Urhoghide, PDP, Edo South, would chair the Joint Committee that would also look into the requisite appropriation by the National Assembly as required by the Constitution; and the controversial presidential approval for the projects..
Resolutions of the Senate Wednesday were sequel to a motion by Senator Dino Melaye, APC, Kogi West, entitled “Monumental Fraud in the Power Sector.”
The Senate also mandated the committees to investigate and summon, if necessary, the Nigerian Sovereign Investment Authority, NSIA; Nigerian Electricity Bulk Trading Company, NBET, etc., to generally establish the status of the funds( $350million) and report back to the Senatewithin two weeks.
The Senate would like to know how the Ministry of Power, Works and Housing spent another $35 million on a single power project and wants to pay another $29 million to General Electric (GE) as cost for turbines as well as another $6 million in consultancy fees to other companies, all of which were done without appropriation by National Assembly.
Senate also mandated a full probe of $500 million Eurobond with NNPC and another $150 million with Transmission Company of Nigeria, TCN.
The prayer that the Senate direct the Federal Ministry of Power, Works and Housing to stop or suspend all attempts or efforts to pressurize NSIA to release $350 million meant for NBET to the Ministry for use on the controversial fast power projects, was, however, dropped.
Presenting the motion, Melaye alleged that the Ministry of Power, Works and Housing was plotting desperately to retrieve the $350 million in NSIA which is meant for state-owned Nigeria Electricity Bulk Trading Company, NBET, with a view to diverting it for its “Fast Power Project.
The fund has been with NSIA since 2014 to help build market confidence especially among new investors in the newly privatised electricity market and to ascertain the exact status of the fund ($350 million).
In his presentation, Senator Melaye said: “The Senate notes that sometime in July 2013, the Federal Government raised a total sum of $1billion through a Euro bond issue;
“It is aware that the sum of $350 million was taken by the Federal Government out of the proceeds of the July 2013 Eurobond issue and released to Nigeria Electricity Bulk Trading Company( NBET) Plc as shareholder contribution to shore up its capitalization;
“It is further aware that NBET is a Federal Government owned public liability company that deals in electricity trading and management of associated liabilities;
“Notes that the sum of $350 million released to NBET was to demonstrate NBET’s preparedness to assume its role as a government backed electricity bulk trader to provide market confidence in the privatized electricity market;
“Observes that this move by the Federal Government was intended to backstop NBET’s with new investors in the electricity market especially new generation companies and to provide assurance to them that NBET is a credit worthy off-taker of power with the requisite capitalization to meet its payment obligations to both greenfield and brownfields power generating companies;
”Notes that as confidence building measure, this money ( i.e. $350 million) was domiciled with the Nigerian Sovereign Investment Authority ( NSIA) for reinvestment in low risk investment and structured in a manner that NBET can call for funds at short notice when required;
“Observes that this fund has been with NSlA since 2014 and has helped build market confidence especially among new investors in the electricity market who see NBET’s positive balance sheet as a form of security that their investments are safe and that NBET has the wherewithal to meet its payment obligations;
“Alarmed that there is now a desperate attempt by the Federal Ministry of Power, Works and Housing to retrieve this fund ( $ 350 million) and divert same to fund the so called Fast Power Projects which the Ministry has already spent $35 million of public funds not appropriated by the National Assembly;
“Further alarmed that since the introduction of the Fast Power Project by the Federal Ministry of Power, Works and Housing, a total sum of $35 million has been spent by the Ministry on Afam Power Project alone to pay $29 million to General Electric (GE) as cost for turbines and $6million in consultancy fees to other entities respectively, all without requisite feasibility study of the projects and appropriation by the National Assembly as required by the Constitution;
Observes that a lot of questions are begging for answers as regards the $29 million paid to General Electric and the $6 million paid to other consultants as to Who were the Consultants and how were they procured; Was there observance of due process in awarding the consultancy of $6 million and in paying General Electric $29 million for turbines; Why is the transaction cloaked in secrecy; What is the true value of Afam Fast Power?
Also, why is the Ministry engaging in constructing new power plant while government has several idle plants that is seeking buyers for; Why is the Ministry that is supposed to be making policies, dabbling into constructing new power plants that we have all agreed is better handled by the private sector?
“Concerned that the Federal Ministry of Power , Works and Housing is determined to persist in this brazen violation of the Constitution and extant laws on due process by insisting that the NSIA should release the $350 meant to NBET on the pretext of acting under a purported presidential approval;
“Convinced that there is an urgent need to bring the Ministry to order regarding its planned diversion of the sum of $350 meant for NBET and further demand a detailed account of unappropriated public funds spent on the controversial fast power projects.”
