ABUJA – Senate yesterday, resolved to probe into disbursement and expenditure of $1billion allegedly raised from Eurobond in 2013.
The resolution followed the adoption of a motion: “Monumental fraud in the power sector” by Sen. Dino Melaye (Kogi West).
As a result, the Senate mandated its joint committee on Power and Public Accounts to invite the Minister of Power, Works and Housing, Mr. Babatunde Fashola, to give a detailed account of the public funds spent on the Fast Power Projects particularly Afam Fast Power Project.
Mr. Fashola is expected to give evidence of feasibility study indicating the viability of the projects and requisite appropriation by the National Assembly as required by the Constitution.
Also, the minister is to furnish the Senate with presidential approval for the projects
In addition, the committee to investigate the Nigerian Sovereign Investment Authority ( NSIA), Nigerian Electricity Bulk Trading Company ( NBET) and others to establish the status of the balance of $350million from the $1 Eurobond issued by the Federal Government in 2013.
The joint committee was given two week to report back to the Senate
Melaye in the motion noted that sometime in July 2013, the Federal Government raised a total sum of $1Billion through a Eurobond issue.
He noted that $350 million was taken by the Federal Government out of the proceeds and released it to Nigeria Electricity Bulk Trading Company ( NBET) Plc as shareholder contribution to shore up its capitalization.
He further informed the Senate that the NBET is a Federal Government owned public liability company that deals in electricity trading and management of associated liabilities.
According to him, the $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.
The sum he, continued, was intended to back-up NBET 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.
He further observed that as confidence building measure, $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
Melaye noted that the 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.
He however was 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 on which, the Ministry has already spent $35 million of public funds not appropriated by the National Assembly.”
Melaye was “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 $6 million in consultancy fees to other entities respectively”.
Worse still, the senator observed that all the releases were done “without requisite feasibility study of the projects and appropriation by the National Assembly as required by the Constitution.”
“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?
“Why is the Ministry engaging in constructing new power plant while government has several idle plants that is seeking buyers?
“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?”
Melaye expressed concern 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 for NBET on the pretext of acting under a purported presidential approval.”
He expressed his convinction that there was 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.
Sen. Gbenga Ashafa in his contribution noted that for the Senate to do a thorough job, those mentioned in the motion should be given opportunity to say their own side of the story.
He noted that some of the allegations raised in the motion were grave and should not be taken without hearing from those involved.
