The Senate, on Wednesday, mandated its Senate committees on Power; and Public Accounts to invite the Minister of Power, Works and Housing, Babatunde Fashola (SAN), to explain how his ministry spent $35m out of the money on power projects without approval by the National Assembly.
The investigation follows the alleged plan by the Ministry to secure the release of $350m domiciled in the Nigerian Sovereign Investment Authority to finance electricity projects.
The decision followed the adoption of a motion moved by Senator Dino Melaye (Kogi-West), at the plenary on Wednesday, which was entitled, ‘Monumental Fraud in the Power Sector.’
The Senate mandated the committee to invite the Minister “to render a detailed account in terms of public funds spent on the Fast Power Projects (Afam Fast Power Project in particular); evidence of feasibility study indicating the viability of the projects; requisite appropriation by the National Assembly as required by the constitution; and the controversial presidential approval for the projects.”
The committee was mandated “to investigate and consider summoning the Nigerian Sovereign Investment Authority, the Nigeria Electricity Bulk Trading Company, etc., to generally establish the status of the funds ($350m) and to report back to the Senate within two weeks”, and to “direct the Federal Ministry of Power, Works and Housing to stop or suspend all attempts or efforts to pressurise the NSIA to release $350m meant for NBET to the ministry for use on the controversial fast power projects.”
In the motion, Melaye recalled that the Federal Government raised $1bn through a Eurobond issue in July 2013, while the government released $350m out of the sum to the Nigeria Electricity Bulk Trading Company Plc as shareholder contribution to shore up its capitalisation.
Melaye said, “The Senate observes that this fund has been with the 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.
“The Senate is alarmed that there is now a desperate attempt by the Federal Ministry of Power, Works and Housing to retrieve this fund ($350m) and divert same to fund the so-called Fast Power Projects, which the ministry has already spent $35m of public funds not appropriated by the National Assembly.”
“The Senate is further alarmed that since the introduction of the Fast Power Project by the Federal Ministry of Power, Works and Housing, a total sum of $35m has been spent by the ministry on Afam Power Project alone to pay $29m to General Electric as cost for turbines and $6m 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.”
The senator said “a lot of questions are begging for answers” as regards the $29m paid to General Electric and the $6m paid to other consultants.
He asked who the consultants were and how were they procured. He also asked if there was observance of due process in the award of the contracts. He further asked why the transaction was cloaked in secrecy and what was the true value of Afam Fast Power?
Melaye added, “Why is the ministry engaging in constructing new power plant while the 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?”
He added, “The Senate is 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 $350m meant for NBET on the pretext of acting under a purported presidential approval.
“The Senate is convinced that there is an urgent need to bring the .ministry to order regarding its planned diversion of the sum of $350m meant for NBET and further demand a detailed account of unappropriated public funds spent on the controversial fast power projects.”