Shocking frauds in the power sector

Idowu Samuel takes a look at the heart-rending revelations of fraudulent activities that have characterised every attempt at reviving the power sector and reports

THE world is aware that the story of electricity generation in Nigeria any day is mind blowing. It seems to have been aware too that Nigeria is eternally jinxed with the problem of electricity even as the country appears to have been at a loss on how to remedy the situation. However, it hardly occurred to any watcher of the problem of electricity in Nigeria that the officials of government saddled with the responsibility of providing basic needs for the populace are more than daft and never fit to occupy any high position in government. It has taken the ongoing probe of the Energy Sector in the past eight years by the House of Representatives to realise just that.

The problem of electricity in Nigeria had started surfacing as early as the mid 70s under the moribund Electric Corporation of Nigeria (ECN). That was when the government of Nigeria lost focus on paying attention to maintenance of facilities that were generating electricity for Nigeria. Corruption had crept into the system since the such that the monies realised from electricity consumption were disappearing into private pockets rather than being ploughed back into the system.

The rulers of Nigeria at that time had thought that the idea of changing the name of electricity corporation from ECN to National Electric Power Authority (NEPA) was sufficient to make electricity available as desired across the country. That even added to the problem, NEPA having failed woefully to live up to expectation. Even at the prospect of changing the name to Power Holding Nigerian Limited, electricity generation, distribution and transmission have continued to record the worst effects despite the efforts made to involve private sector participation.

The task of management of electricity and power in Nigeria has simply revealed government officials as rabidly corrupt, insensitive and unpatriotic. The poor attributes of the crop of Nigerian leaders were the key points highlighted at the public hearing being conducted on the Power sector since 1999 till 2007 with emphasis on discovering how estimated sum of N16billion voted for the revival of the sector went down the drain without any visible results.

So far, the probe panel has been able to establish that Nigerian government, particularly under chief Olusegun Obasanjo was fond of approving huge sums of local and foreign currencies to foreign firms for contracts in the energy sector which the companies would never execute. It has been established that foreign companies were even at liberty to collect mobilisation funds sometimes more that half of the total cost of particular contracts and then refuse to mobilise to the sites where they were expected to perform.

Nigeria has laws, but it has never attempted to make the full weight of the law descend on any of the erring foreign contractors who have openly demonstrated brazen audacity to rip it off in different circumstances even as the expatriates involved were remitting hard currencies meant for execution of different projects of energy to their different countries.

Even at that, the officials of government who approved the contacts for construction of most of the National Integrated Power Projects (NIPP) across the country had demonstrated special liking for paying the foreign contractors while deliberately refusing to fund the supervisors appointed to monitor the contracts so awarded. It tells much about the high level of connivance between government officials and the foreign contractors which Nigerians had depended on to help revive electricity in Nigeria.

There are cases to focus attention on in the ongoing probe of the power sector in Nigeria. Hardly had the probe started than mind boggling revelations about massive rip-off of Nigeria by foreign contractors began to make the rounds. On day one of the probe, the House of Representatives Committee on Power and Steel Hon Ndudi Elumelu had alleged that a sum of N250million was spent on the building of a bungalow just for the ground breaking ceremony of the Mambilla Power Project in May 2007 a few days to the exit of former President Olusegun Obasanjo from Power. The Project has since remained moribund.

More disturbing was the case of a German based consultancy firm, LAHMEYER International which admitted its failure to execute the feasibility study on Mambilla Hydro Power Project in spite of N369 million paid for it. 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.

The Chairman of the probe panel, Ndudi Elumelu had alleged that Lahmeyer was unqualified for the contract as it was blacklisted by the World Bank alleged for fraudulent activities in one of the Asian countries. The company, he said had never visited the site of the contract despite collecting the huge sum of money, a fact corroborated by Menzel who said the company staff were only at Gembu, 25 kilometres away from Mambilla.

The Minister of State for Energy (Power), Mrs Fatima Ibrahim had also appeared before the panel and told members that more than $13 billon was spent on power supply between 1999 and 2007. The minister gave the breakdown of the budget allocation indicating that the sum of N6.7 million was approved by the government in 1999, N49.8 million in 2000, N 71 million in 2001, N41.2 million in 2002, N5.2 million in 2003, N54.4 billion in 2004, N70.1 billion in 2005, N72.4 billion in 2006 and N61.1 billion in 2007. She said the sum of N235 billion, $6.5 billion and 330 million Euro were used to finance the National Integrated Power Projects (NIPP).

She said another $4.6 billion sourced from international creditors, $1.6 billion from Jont Venture Calls (JVCs) were also used to finance thesector between the period. There was also the case of Enego Nigerian Limited which the House learnt failed to execute a contract worth N19,429,901,010.00 after it collected mobilisation fee for the contracts. Former Head of State, General Abdulsalami Abubakar is the chairman of the firm which won the contract to build a power sub-station of 330kv at the site after collecting more than 60 percent of its fees totaling N501,348,252million. The original feed earmarked for the supervision of the contract stood at N720,159,940, leaving the balance of N218m. The engineer contracted to supervise the project, Colenco claimed it did not go to the site because the outstanding balance was not paid.

A South African company, Pivot was also reported as having fiddled with a huge sum of N3.3billion earmarked for construction of Double Circruit Transmission Line in Enugu Haven. Managing Director Pivot, Mr. David Greng failed to convince the probe panel how his company collected the sum of N1.096,929,116.00 without mobilising to the site of the contract.

It was a tale of woe told by the Permanent secretary in the Ministry of Power and Steel, (PHCN), Alhaji Aliyu Abdullahi who recounted that as the permanent Secretary, he was not the accounting office as he put the former minister of Power and Steel, Liyel Imoke in the full glare of the anomalies recorded with the contracts awarded on NIPP during the Obasanjo’s administration.

According to the Permanent Secretary while Imoke was a member of the Steering Committee on NIPP set up by the federal government to award and execute the NIPP contracts, he was directly relating with the then president and the minister of Finance, Mrs. Ngozi Okonjo Iweala while he was only making little imputes. There are certainly more earth shaking revelations to expect at the sittings of the Probe panel on Power Sector. The panel had invited President Umaru Yar’Adua to testify before it as well as his immediate predecessor, Chief Olusegun Obasanjo. All the same, the Probe Panel Chairman, Elumelu had threatened to invoke the constitutional power by the National Assembly to sanction whosoever failed to honour his invitation.

Interestingly, the chairman had given the world a cause to feel that he has been stepping on toes with the ongoing probe on Power Sector in Nigeria. He had reported cases of harassment and death threats from different quarters to him. He seems to have the gut to continue with the probe and then get to the root of the matter. His ability to do that will have made the difference for Nigeria at the end of the day. Somehow, the House which initiated the idea of the probe had expressed shock at the extent of revelations trailing the sittings of the panel. The House Committee chairman on Media and Public Matters, Honourable Ezeuche Ubani gave the impression last weekend during a media briefing. He said the turn of events had however, energized the House to be more alive to its constitutional role of not only approving funds for projects by ensuring that the funds so approved would be used judiciously.

Ubani was optimistic that the probe of the Power Sector would produce a desirable results on the likelihood of the House to made recommendations on how to bring those found culpable of mismanaging the huge sums voted for power projects in the past years to book. Nigerians would be awaiting such moments when even the big toes who would have been found culpable would be answering charges of killing Nigeria in bits through the power projects.