Senate President Bukola Saraki, on Tuesday directed the Senate Committee on Finance to investigate the Nigerian Sovereign Investment Authority (NSIA) over its complicity in the misappropriation of $35m, representing 10% of the $350m earmarked for projects in the nation’s power sector.
This followed a motion directing the Senate Public Accounts Committee to investigate how the NSIA as custodian of the fund caved in to pressure mounted by the Federal Ministry of Power, Works and House to retrieve and divert the funds to some ‘Fast Power Projects’ that had not been appropriated by the National Assembly.
He noted that already, $35m or 10% of the non-appropriated public funds had been spent on the scheme, with $29m paid to General Electric for turbines, and $6m to other entities as ‘consultancy fees.’
The $350m was released to the Nigeria Electricity Bulk Trading Company (NBET) by the Federal Government, from a July 2013 $1bn Eurobond, adding that as a confidence-building measure, this fund was domiciled in the NSIA for structured reinvestments in a low risk manner that will provide NBET with the necessary liquidity.
The Senate directed the committees “to investigate and consider summoning the NSIA; Nigerian Electricity Bulk Trading Company to establish the status of the $350million.”
According to Saraki, “it is important that we examine how policy decisions in this organization (NSIA) are made; (to) ensure that it operates with appropriate oversight and with best practices.”
Both committees are to report back to the full plenary with their full Reports in two weeks, he said.
Giving further background to the motion, the Senate President also noted that the Motion had to do with NBET as “a Federal Government-owned public liability company that deals in electricity trading and management of associated liabilities. This is why the release of the $350m to NBET, was to demonstrate the company’s preparedness to assume its role as a government-backed bulk trader of electricity.
“Additionally, the aforementioned release of the funds was intended to backstop NBET with new investors by providing these investors with the assurance that NBET was a credit-worthy off-taker of power with the requisite capitalization to meet its obligations.
Some of the questions the committees would provide answers to on the $35m disbursement include the identity of the consultants paid and how they were procured, whether due process was followed in the award of the $6m consultancy contract, why the transaction was cloaked in so much secrecy and why the Ministry is constructing new power plants when government has several idle ones.
To answer these questions, the Senate mandated its Committees on Power and Public Accounts to invite Babatunde Fashola, “Minister of Power, Works and Housing to render a detailed account of how the public funds were spent on the Fast Power Project; evidence of the feasibility studies conducted to show the viability of the project; and the requisite appropriation by the National Assembly as required by the Constitution.”