OBJ'S $16bn fund shocker: How contractors looted N369m - Reps - N250m used to build bungalow - Rep alleges death threat over probe

Idowu Samuel, Abuja - 12.03.2008

THE House of Representatives Committee Chairman on Power and Steel, Honourable Ndudi Elumelu, on Tuesday alleged that N250 million was spent on the building of a bungalow for the ground breaking ceremony of the Mambila Power Project in May 2007 a few days to the exit of former President Olusegun Obasnajo from power.

The project has since remained moribund. Elumelu made this known in Abuja during a public hearing by the House of Representatives on the revival of the power sector, just as he said there had been threats to his life by forces he said were bent on halting the probe of the alleged misappropriation of about $16 billion earmarked for the power sector by the Obasanjo government.

According to him, the contractors had made efforts to inaugurate the Mambilla power project before the expiration of the tenure of Obasanjo and had hurriedly built the bungalow at Gergu, a distance of about 25 kilometres to the Mambilla project site, to host the event.

He disclosed that the former president and top government functionaries were flown to the area in a helicopter, “apparently to shield the shoddy job at the site from him.”

“Gergu where they did the ground breaking ceremony is 25 kilometres to Mambilla. They just built a bungalow. They said they spent N250 million for the bungalow which is already dilapidating. Why did they not do it in Mambilla?

“The former president was flown there in a helicopter because there are no access roads to the place. LAHMEYER has done nothing despite the sum of N369 million it has collected and I believe they should be thinking of refunding the money to the Federal Government.

“Fellow Nigerians, we are serious, very serious. We are not after anybody, we just want to ensure that all the monies paid for jobs not done should be refunded,” he said.

The chairman disclosed also that anonymous callers had been issuing threats to him with instructions that he should discontinue the ongoing probe of the power sector under the past civilian administration as a condition for sparing his life.

Also at the public hearing, a German-based consultancy firm, LAHMEYER International, had admitted that it failed to execute the feasibility study on Mambilla Hydro Power Project in spite of N369 million payment to it by the government.

The Administration Manager of LAHMEYER, Mr. Benhard Menzel, said the contract was awarded to the company in April 2005 at the cost of N586 million.

He said the terms of the contract provided for 15 months completion period, although he exonerated his company for the delay in the completion of the project. The reason, according to him, was based on a result of geo-technical investigation which he said was being handled by a different company.

Elumelu, in his address at the investigative hearing into the $16 billion spent on the power sector reform between 1999 and 2007, had disclosed that a German firm collected mobilisation fee of N369 million for jobs it failed to execute. He said the contract was awarded to the firm even after it was blacklisted by the World Bank.

Elumelu vowed that his committee would not spare anyone in a bid to recover the looted funds. He, however, directed the German firm to refund the money it had so far collected to Federal Government coffers.

In his presentation at the hearing, the governor of Benue State, Mr. Gabriel Suswam, said he began to distance himself from the past civilian administration on realising that a huge sum of money was voted for the power sector without corresponding evidence to justify it.

According to him, being a lawmaker during the Obasanjo presidency, he refrained from supporting the third term plot because of the wastages made by the government on power sector.

He said Mambilla project was meant to deceive Nigerians that the administration was committed to boosting public power supply. He said the expenditure on the power sector reform ran into trillions of naira. The Benue State governor promised to submit a comprehensive list of budgeted amount to the investigative panel.

He stated that the bulk of the money spent on the power sector reform under the Obasanjo administration came from the excess crude account, disclosing also that the Governors Forum had been requesting for a refund of their own share of the money from the Federal Government since in their view, the projects were no longer feasible.

Also testifying before the probe panel, the Minister of State for Energy (Power), Mrs. Fatima Ibrahim, disclosed that more than $13 billon was spent on power supply between 1999 and 2007.

The amount, she said, was made up of annual budgetary allocation to the sector, foreign loans and other Joint Venture Cash (JVC).

Giving the breakdown of the budget allocation, she said N6.7 billion was allocated to the power sector in 1999, N49.8 billion in 2000, N71 billion in 2001, N41.2 billion in 2002, N5.2 billion in 2003, N54.4 billion in 2004, N70.1 billion in 2005, N72.4 billion in 2006 and N61.1 billion in 2007.

According to the minister, N235 billion, $6.5 billion and 330 million euro were used to finance the National Integrated Power Projects (NIPP), adding that another $4.6 billion sourced from international creditors as well as $1.6 billion from Jont Venture Calls (JVCs) were also used to finance the sector during the period.