Senate fumes at Fashola for spending $35m without approval, summons him

The Senate on Wednesday lambasted the Minister of Power, Works and Housing, Babatunde Fashola (SAN), for allegedly spending $35 million out of the $350 million domiciled in the Nigerian Sovereign Investment Authority (NSIA) on power projects without the approval of the National Assembly.

The Senate therefore ordered an investigation into an alleged plan by his ministries to secure the release of the $350m domicile in the NSIA to finance electricity projects.

This came following a motion entitled “Monumental Fraud in the Power Sector” which was moved by the Kogi West Senator, Dino Melaye, at the Senate plenary on Wednesday, which was adopted by the lawmakers.

Upon the adoption, the Senate authorized its committees on Power; and Public Accounts to summon Fashola and ensure he rendered “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.”

Also, the Senate granted another prayer in the motion by asking the same committees “to investigate and consider summoning the NSIA, the Nigeria Electricity Bulk Trading Company, etc., to generally establish the status of the funds and to report back to the Senate within two weeks.”
Unanimously, the lawmakers further granted the prayer to “direct the Federal Ministry of Power, Works and Housing to stop or suspend all attempts or efforts to pressurise the NSIA to release $350 million meant for NBET to the ministry for use on the controversial fast power projects.”

Senate President Bukola Saraki had in his remarks recalled that the issues on the power sector had earlier been raised in the chamber, adding that it was high time that the law that established the NSIA was reviewed.

The suggestion on the review of the NSIA Establishment Act by the Senate President was presented as an additional prayer and was also unanimously granted.

The Kogi West Senator had in his motion noted that the Federal Government raised $1 billion through a Eurobond issue in July 2013, while the government released $350 million out of the sum to the Nigeria Electricity Bulk Trading Company Plc as shareholder contribution to shore up its capitalisation.

“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 ($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.”

“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 $35 million has been spent by the ministry on Afam Power Project alone to pay $29 million to General Electric as cost for turbines and $6 million 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.

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“The Senate is convinced that there is an urgent need to bring the ministry to order regarding its planned diversion of the sum of $350 million meant for NBET and further demand a detailed account of unappropriated public funds spent on the controversial fast power projects.”

The motion was seconded by Senator Mohammed Hassan (Yobe-South), who added that apart from the $350 million released to NBET that the Transmission Company of Nigeria also got $150 million and the Nigerian National Petroleum Corporation got $500 million for some gas projects.

“I will want to recommend that the Senate Committee on Power should look at that, not only ascertaining the credit balance of the $350 million, we need to find out what is the status of the $500 million with NNPC and $150 million with TCN. I think that is the way to go,” he said.

 

 

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