The Senate Wednesday 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.
The upper chamber said that Fashola should also give evidence of feasibility study indicating the viability of the projects and requisite appropriation by the National Assembly as required by the Constitution.
It said that the minister should also furnish the Senate with presidential approval for the projects
It also asked 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
The resolution followed the adoption of a motion entitled “Monumental fraud in the power sector” sponsored Senator Dino Melaye (Kogi West).
Melaye in his lead debate noted that sometime in July 2013, the Federal Government raised a total sum of $1Billion through a Eurobond issue.
He said that he 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.
He also said that he is further aware that NBET is a Federal Government owned public liability company that deals in electricity trading and management of associated liabilities.
Melaye noted 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.
He observed that the 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.
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 N BET can call for funds at short notice when required
He said 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 expressed alarm 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.”
Melaye said that he 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 $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.”
He observed 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?
“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?”
Melaye expressed 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.”
He said that he is 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.
Senator Gbenga Ashafa in his contribution said 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.