A new report by the Socio-Economic Rights and Accountability Project
(SERAP) has revealed how over N11 trillion meant to provide regular
electricity supply was allegedly squandered under the governments of
former presidents Olusegun Obasanjo, Umaru Musa Yar’Adua and Goodluck
Jonathan.
According to the report, “The total estimated financial loss to Nigeria
from corruption in the electricity sector starting from the return to
democracy in 1999 to date is over Eleven Trillion Naira (N11 Trillion
Naira). This represents public funds, private equity and social investment
(or divestments) in the power sector. It is estimated that may reach over
Twenty Trillion Naira (N20 Trillion Naira) in the next decade given the
rate of Government investment and funding in the power sector amidst
dwindling fortune and recurrent revenue shortfalls.”
The 65 pages report launched today at the Westown Hotels, Lagos is titled:
From Darkness to Darkness: How Nigerians are Paying the Price for
Corruption in the Electricity Sector. The report presented to the media by
presented by Yemi Oke, Ass. Professor, Energy/Electricity Law, Faculty of
Law, University of Lagos discloses that “the country has lost more
megawatts in the post-privatisation era due to corruption, impunity, among
other social challenges reflected in the report.”
The report shows that, “The much-publicised power sector reforms in
Nigeria under the Electric Power Sector Reform Act of 2005 is yet to yield
desired and/or anticipated fruits largely due to corruption and impunity
of perpetrators, regulatory lapses and policy inconsistencies. Ordinary
Nigerians continue to pay the price for corruption in the electricity
sector–staying in darkness, but still made to pay crazy electricity
bills.”
Mr Femi Falana SAN who chaired the report launch said that, “This report
is a must read, and I promise to lead in the follow-up litigation efforts
to ensure the full implementation of the recommendations of the report.”
The report launch was also attended by Babatunde Irukera, the Director
General/Chief Executive of the Consumer Protection Council (CPC); and Mr
Ibrahim Magu Chairman Economic and Financial Crimes Commission (EFCC) who
was represented by Mr Osita Nwajah, Director Public Affairs EFCC. Both
promised to work to ensure the full implementation of the recommendations
contained in the report.
Others at the events are Barrister Babatunde Ogala; Dayo Olaide, Deputy
Director Macarthur Foundation; Eva Kouka, Program Officer Ford Foundation;
Motunrayo Alaka Coordinator Wole Soyinka Centre for Investigative
Journalism; representatives of the Independent Corrupt Practices and other
Related Offences Commission (ICPC); the National Human Rights Commission,
and the media.
The report accuses Dr. Ransom Owan-led board of the Nigerian Electricity
Regulatory Commission (NERC) of allegedly “settling officials with
millions of Naira as severance packages and for embarrassing them with
alleged Three Billion Naira (N3,000,000,000.00) Fraud. The authorities
must undertake a thorough, impartial and transparent investigation as to
the reasons why corruption charges were withdrawn, and to recover any
corrupt funds.”
The report also called for the reopening and effective prosecution of
corruption allegations, including the alleged “looting of the benefits of
families of the deceased employees of Power Holding Company of Nigeria
(PHCN) levelled against a former Permanent Secretary in the Ministry of
Power, Godknows Igali”
The report reads: “The Obasanjo’s administration spent $10 billion on NIPP
with no results in terms of increase in power generation.
$13.278,937,409.94 was expended on the power sector in eight years while
unfunded commitments amounted to $12 billion.”
“The Federal Government then budgeted a whopping N16 billion for the
various reforms under Liyel Imoke (2003 to 2007) which went down the
drains as it failed to generate the needed amount of electricity or meet
the set goals. Imoke was alleged to have personally collected the sum of
$7.8 million for the execution of the contract for the construction of the
Jos-Yola Transmission Line, which was never executed. There were
documented/reported allegations of corruption against Imoke that
fizzled-out shortly thereafter.”
“Professor Chinedu Nebo handed over the assets of the PHCN to private
investors on November 1, 2013. Prof. Nebo is alleged to have corruptly
funded the privatized power sector with over N200 Billion despite
privatization. The allegation of N200 Billion funding of the privatized
power sector during Prof Nebo’s tenure should be thoroughly and
transparently investigated and anyone suspected to be responsible
prosecuted. Any corrupt funds should be fully recovered.”
“Our research revealed that the sum of N1.5 billion with which the
vehicles were acquired was allegedly sourced from the diverted N27 billion
insurance premium of deceased workers of the defunct Power Holding Company
of Nigeria (PHCN).”
“The National Assembly and members should desist from and avoid
manipulating the award of electricity contracts or cite projects in their
constituencies under the guise of “Constituency Project”. The National
Assembly should publish and ensure the full implementation of the
recommendations of all power-related investigations to date.”
“The Federal Government should back-down from Rural Electrification
initiatives and allow States to undertake rural electrification through
their respective Local Governments and Development Areas. Federal
Government should consider fully divesting its stakes in the power sector
and allow for efficient, decentralized sector governance by Federal and
State governments, as appropriate, in line with the provisions of the
Second Schedule, paragraph 13 and 14 of the Constitution of the Federal
Republic of Nigeria 1999 (as amended).”
“The 36 state governments should wake up to their rights, duties and
obligations under the Constitution of the Federal Republic of Nigeria
relating to the power sector by working to promote and ensure access to
regular and uninterrupted electricity supply for all residents within
their states. The 36 state governments have been abdicating the duties to
the power sector, bearing in mind that Power is an item on the Concurrent
Legislative List under the Nigerian Constitution 1999 (as amended).”
“When the late Bola Ige took up the mantle of the Power and Steel Ministry
in 1999, he probably didn’t understand the magnitude of problems in the
power sector and consequently, promised that within six months of his
appointment, “power failure will be a thing of the past” and that on a
regular basis, he will brief the nation on the state of power, steel and
aluminum. Current minister Babatunde Fashola SAN also claimed that ‘a
serious Government will fix the power problem in six months’”
“The power sector under Ige was characterized by epileptic and unreliable
supply, bogus billing and archaic rate collection. The late Minister
failed and was unable to put an end to these. His failure was attributed
to acts of sabotage and corruption by people who were benefitting from the
use of generators. The late Bola Ige was not accused of corruption.”
“When Rilwan Lanre Babalola (2008 to 2010) took over the affairs in the
Ministry of Power, he met 3,700MW on ground and promised to increase it to
6,000MW and ensure a 24-hour power supply by the end of 2009. Six months
after assuring Nigerians of making a significant impact in the sector, in
September 2009, the 3,700MW capacity he met on ground dropped to 2,710MW
which shortfall was attributed to inadequate supply of gas to the new
generators.”
“The duo, Elumelu and Ugbane allegedly colluded in misappropriating over
N10 billion public funds from the account of Rural Electrification Agency
(REA). The research also established, based on evaluation and analyzing
documents, a prima-facie case of misappropriation of unspent funds at the
end of the year instead of returning same to the treasury. Alleged
misappropriation of N500million to buy houses; diversion of REA’s funds;
flouting of government’s rules on award of contracts and award of
fictitious and unnecessary contracts without following due process.”
“The government of Nigeria handed over the transmission company to a
Canadian company Manitoba, to manage and under a management service
contract of over $200 million. Findings also show that the Transmission
Company of Nigeria could not execute most of its approved 44 projects
after having 50 percent of its N30 billion 2016 budget released to it.
Funds were released from Eurobond. $23.6 million allegedly paid to
Manitoba Hydro International (MHI) of Canada to manage the Transmission
Company of Nigeria (TCN) would appear to be without due process.”
“The privatization of PHCN would appear to have yielded the country total
darkness. Gains of privatization were lost through alleged corruption,
manipulation of rules and disregard to extant laws and lack of
transparency in the exercise. The PBE encouraged the deferment of payment
and restructuring of payment terms in contravention of bidding rules to
the disadvantage of other bidders.”
“Billing methodology shrouded in secrecy. Billings do not reflect actual
electricity consumptions in most cases. Most if not all, officials of the
DISCOs are still very corrupt and demand gratification from customers
before doing the job they are paid to do. Grand corruption against the
Federal Government owner of the 40% stakes in the DISCOS, and by
implications, the Nigerian masses due to non-remittance or
under-remittances of the monies collected by the DISCOs.”
“The Manitoba deal is shrouded in secrecy as essential details of the deal
remain unknown to Nigerians till date. The authorities should undertake a
public-oriented audit on the state of affairs of the TCN two years before
and after the Manitoba deal. The outcome of the audit should form basis
for further action and charges in court against the suspected perpetrators
and corrupt funds fully recovered.”
“The Federal Government should undertake a thorough, impartial and
transparent investigation into the power sector privatization with a view
to doing things the right, fair and just way. Ownership of public stakes
of 40% in those entities should be revisited and further privatized to
avoid using government/public resources to subsidize private entities.”
“Attention should be focused also on petty corruption. Petty corruption in
the electricity sector has not received much attention, as the focus has
been on grand corruption in the sector.”
“The Attorney-General of the Federation and Minister of Justice Abubakar
Malami SAN should request the report of the House of Representative
Committee that probed government spending in the power sector from 2000 to
2007, and the Elumelu House Probe Committee which had accused 21 persons
and 36 companies of subversion of government policy on due process make
the report public and ensure appropriate legal action against anyone
suspected to be involved in corruption as well as full recovery of corrupt
funds.”
“Undocumented, monumental fraud and corruption is said to be perpetrated
at the Niger Delta Power Holding Company (NDPHC) and investigation by the
EFCC and ICPC will ensure that those involved are effectively brought to
justice.”
“Mr Malami should direct the EFCC and ICPC to probe metering and billing
fraud and corruption and bribery among Discos. Most consumers are unhappy
will their billing methodology and feel short-changed by the operators. Mr
Malami should promptly make progress on all outstanding cases of
corruption in the electricity sector including by ensuring effective
prosecution of all power sector cases being handled by the Ministry.”
“The ICPC should make public the status of the investigation and
recommendations for prosecution (if any) on the AEDC Recruitment
Scandal/Jumbo Pay Scandal given the facts that the Nigerian Government and
public have 40% stakes in the AEDC. The Manitoba deal is shrouded in
secrecy as essential details of the deal remain unknown to Nigerians till
date. The EFCC/ICPC should lead a public-oriented audit on the state of
affairs of the TCN two years before and after the Manitoba deal.”
“The ICPC show tell Nigerians about the current status of the probe of the
recruitment scandal and corruption-induced jumbo pay to workers of the
Abuja Electricity Distribution Company (AEDC Plc). Anyone found to be
responsible should be brought to justice and corrupt funds fully
recovered.”