Revisiting The Power Sector Probe: How Obasanjo’s Men Paid $ 16 Billion For Darkness!

Despite the billions that have been pumped into Nigeria’s power sector and the many promises on power generation from the Minister of Power, not many parts of Nigeria, if any can boast of constant and uninterrupted supply of electricity. Just like it did over the fuel subsidy regime, the House of Representatives set up a committee to look into the power sector and come up with recommendations that would bring about positive changes in the sector.

By the time the Ndudi Elumelu-led committee concluded its investigations and submitted its report, many had expected that the anti-graft agencies would move in and people would be called to account for how the $ 16 billion dollars spent on the sector failed to yield “commensurate result”.

Incidentally, most of the “big fishes” indicted in the report are still walking as free men while the report of the probe has been discarded; thanks to a report review committee set up by the House of Reps.

The only headway that seems to have been made so far is the discovery of about 2,500 containers of imported power equipment worth about $ 5 billion at the   Lagos ports. The containers have been abandoned for long and the demurrage generated by the abandoned equipment has been put at over N 4 billion. Investigations revealed that the equipment formed part of what the $ 16 billion was expended on within Obasanjo’s 8 years. Sadly however, most of those who got contracts during that time never looked back after obtaining funds. Some never even visited the sites .

While the Committee that carried out the probe recommended that the former President, Chief Olusegun Obasanjo should be called to account for the recklessness that took place in the power sector during his time, it was noted that Senator Liyel Imoke had a penchant for waiving due process.  The committee submitted that as a former Minister of Power, Imoke should be held liable to account for over-costing of projects and subverting the reform process of the government by wilful non-compliance with the spirit and letter of the Electric Power Sector Reform Act 2005.  The Committee also recommended that he be thoroughly investigated by the EFCC and ICPC. Sixteen companies were also indicted by the probe panel.

Excerpts from the Committee’s recommendations:
Persons recommended for investigation by the appropriate agencies

The following persons are recommended for investigation by the appropriate agencies for their roles in subversion of Government Policy on Due Process which gave rise to project over-scoping, project cost inflation, Awarding one contract two times and general lack of performance in the power sector in spite of huge expenditures made.

The barefaced looting of the National treasury through the NIPP and PHCN and other projects greatly diminished national capacity to provide electric power leading to wholesale decline in productive business activities and erosion of competitiveness of Nigeria products in the world market. Furthermore, it negatively affected the psyche of citizens. It was a cruel deprivation at the highest possible level, of the class, which George Moody-Stuart (1994) characterized as “grand corruption”, a phenomenon of developing countries “usually involving senior officials and politicians”

Grand corruption constitutes a crime beyond mere theft dealt with in the Penal Codes/Acts. Its devastating impact derogate from the standard of living and quality of life. It is an economic crime against humanity, depriving citizens of the wherewithal for the good life. It has caused Nigeria of all classes, students, market women, craftsman, small scale enterprises and industrialists not only financial loss but also inestimable mental and physical suffering.

Notable individuals in this category are:

Chief Olusegun Obasanjo, GCFR, former President and C-in-C
In view of the enormity of issues entailed in the findings above, it is recommended that former President Olusegun Obasanjo should be called to account for the recklessness in power sector during his time.

The Committee recommends that EFCC and ICPC should investigate him.

Senator Liyel Imoke, former Minister of Power and Steel

Senator Imoke is also liable to account for over costing of projects and subverting the reform process of the government by wilful non-compliance with the spirit and letter of the Electric Power Sector Reform Act 2005, especially as regards the transition from the initial holding company PHCN to the successor companies, thereby stifling the transitional institutional bodies required to facilitate the emergence of a viable electricity market; abuse of due process in respect of payments under the NIPP projects through the use of Presidential Anticipatory Approvals to tele-guide award of contracts to pre-determined entities, with the BMPIU being relegated to the role of providing retroactive certification thereafter; wilful manipulation of tender processes of PHCN and NIPP.

Senator Liyel Imoke is the principal author executive of waiver of “Due Process”. In addition to the facts laid bare in this investigation as outlined in this report, the Committee recommends that EFCC and ICPC should thoroughly investigate him.

Alhaji Abdulhamid Ahmed, former Minister of State Energy, for his patently and wilful manipulation of due process, flagrant abuse of due process, gross abuse of financial procedures in the award of contracts and payments, especially during the last weeks of the Obasanjo administration, exemplified by initiation of requests to the President, and procurement of presidential approvals for huge and questionable payments in respect of Papalanto Phase II, Omotosho Phase II, Geregu Phase II, Alaoji Phases II, Mambilla Packages 1,  Zungeru Hydro, Omoku Expansion, Gbarain-Ubie Expansion and Egbema Expansion (9 additional GE Frame 9 turbines to Rockson International) without due process compliance for contract award and certification for payment.

The Committee recommends that he should be investigated by EFCC and ICPC and if found culpable, banned from holding public office for the next 10 years and if he is already holding any, he should be recalled and the appointment cancelled.

Dr. Olusegun Agagu, former Minister of Power and Steel

The committee found that during the tenure of Dr. Olusegun Agagu as Minister of Power and Steel, numerous contracts were awarded. Relying on a letter from the Corporate Affairs Commission at the time of Agagu’s tenure as Minister in 2002, the Committee found that some unregistered companies were awarded huge contracts. In his testimony, he said that it was not his duty to verify the legal status of companies that were awarded contracts by the Ministry of Power and Steel under his watch. Consequently, there is a prima facie evidence that Agagu awarded contracts without due process.

Up till the time of this report, all efforts to get the owners of the companies to appear in person before the Committee proved abortive. Rather, the Committee received some documents containing reports that the companies were registered. The true identity of the owners remained unresolved.

Recommendation

In view of the huge amounts involved, the Committee recommends that EFCC and ICPC should investigate the allegations with a view to prosecuting anyone found culpable.

Engr. Joseph Makoju, former MD of PHCN and currently Special Adviser to the President on Electric Power, for gross incompetence in the management of PHCN, the sector reforms and the NIPP.

The Committee recommends that he should be investigated by EFCC and ICPC and if found culpable, he should be banned from holding public office for the next 10 years and if he is already holding any, he should be recalled and the appointment cancelled.

Engr. G.O.P Osakue, CEO TCN, for presiding over and directing the manipulation of tenders, abuse of due process, and the deliberate over-scoping of transmission projects; incompetence and gross dereliction of duty in respect of management of transmission contracts awarded since 2001, all of which remain uncompleted to date in spite of payments exceeding 80% of contract costs having been made to the respective contractors; incompetence and gross dereliction of duty in the repeated award of contracts to contractors that have failed consistently on previous uncompleted and abandoned projects.

The Committee recommends that he should be investigated by EFCC and ICPC with a view to recovering huge amounts, which he paid to people who ought not to have been paid. He should be redeployed to another position pending the conclusion of investigations.

Engr. (Dr.) C.E Ifesie, Head Transmission TCN and Project Manager (Transmission) NIPP, for his complicity in deliberate over-scoping of transmission lines projects in PHCN and NIPP, and duplication of projects within PHCN as well as between PHCN and NIPP (2nd Benin – Onitsha 330kV Single-circuit Transmission Line; 3rd Benin – Onitsha 330kV Single-circuit Transmission Line); incompetence and gross dereliction of duty in respect of management of transmission contracts awarded since Y2002, all of which remain uncompleted to date in spite of payments exceeding 80% of contract costs having been made to the respective contractors; incompetence and gross dereliction of duty in the  repeated award of contracts to contractors that have failed consistently on previous uncompleted and abandoned projects (ABB, Charnel Engineering, Chris-Ejike, Pivot Engineering); abuse of office in award of contracts to himself through relatives and proxies (Soltek, Union Allied Engineering).

The Committee recommends that he should be investigated by EFCC and ICPC.

Engr. Mike Ezeudenna, AGM (Lines), TCN, for masterminding the deliberate over-scoping of transmission lines projects in PHNC and NIPP, manipulation of tender evaluation processes, duplication of projects within PHCN as well as between PHCN and NIPP (2nd Benin – Onitsha 330kV Single-circuit Transmission Line; 3rd Benin – Onitsha 330kV Single-circuit Transmission Line), gross abuse of due process.

The Committee recommends that he should be further investigated by EFCC and ICPC.

Engr. C.N.O Nwachukwu, Chairman Technical Committee and General Project Manager (NIPP) for gross negligence and incompetence in the conceptual development of NIPP projects evidenced by the comprehensively dismal failure in managing the NIPP program, and particularly for deliberate manipulation and abuse of due process in the procurement of due process certification for contract award in respect of NIPP Gas EPC Lot 3: extremely poor professional judgment in recommending the award of 3Nos. Power station EPC (Gbarain-Ubie, Omoku and Egbema) contracts to Rockson Engineering without regard to the contractor’s lack of capacity to execute these contracts alongside the Alaoji Phase I and II projects; incompetence, unprofessional conduct in recommending the expansion of scope for Egbema, Gbarain-Ubie and Omoku power plants and award of same to Rockson Engineering, mindful of the contractor’s lack of capacity to successfully execute these projects.

He told the Committee that he knew various project sites but during the on-the-spot assessment tour, the Committee found that he never visited the sites.

The Committee recommends his immediate retirement.

The Committee also recommends that he should be further investigated by EFCC and ICPC with a view to arraigning him for fraudulent management of NIPP projects.

Mr. J.A. Olotu, Managing Director, NDPHC/NIPP for gross incompetence, abuse of due process in the 1000% overpricing of NIPP distribution projects, which happened under his watch from October 2006.

The Committee recommends that he should be relieved of his post.

The Committee also recommends that he should be further investigated by EFCC and ICPC with a view to prosecuting him for involvement in huge fraudulent manipulations on NIPP distribution and other projects.

Engr. I. Onuoha, Deputy Chairman, Technical Committee, for gross negligence and incompetence in general project management and comprehensively dismal failure in managing the supervision of projects under the NIPP program.

The Committee recommends that he should be further investigated by EFCC and ICPC.

Engr. Emmanuel Okonkwo, Project Manager Distribution, NIPP, for his ignoble role in presiding over the 1000% overpricing of NIPP distribution contracts.

The Committee recommends that he should be further investigated by EFCC and ICPC.

Engr. Tope Onadipe, Project Manager Gas, NIPP for his role in the abuse of due process, fraudulent procurement of BMPIU contract award certifications, revocation of contracts and misleading the Federal Executive Council to procure ratification of award of contract to Messrs. IOEC/Kaztec Consortium in respect NIPP Gas EPC Lot 3.

The Committee recommends that he should be further investigated by EFCC and ICPC.

Mr. J.C.W Balami, Head Finance NIPP and AGM Finance PHCN, for presiding over the violation of financial guidelines resulting in overpayments to contractors on NIPP projects, especially with respect to milestone payments against measured works.

The Committee recommends that he should be further investigated by EFCC and ICPC.

Engr. Ayodele

As GM, Technical Services, Engr. Ayodele failed to ensure that the scoping of work on contracts was realistic and that costing was properly done.

Consequently, he contributed to the huge financial loss suffered by the Federal Government on account of over-scoped contracts.

He also failed to bring his professional competence to bear in monitoring PHCN Distribution Projects across the country where most of the CEOs related directly with him in channelling technical jobs in the zones.

Recommendation:

The Committee recommends that Engr. Ayodele be deployed to the Ministry of Energy (Power) or one of the Discos, given serious warning for the above lapses and enjoined to put the interest of the nation first in the performance of his professional duties.

Engr. Sam Gekpe, MD/CEO, Rural Electrification Agency (REA)

In spite of opening offices in various parts of the country, the REA under Dr. Gekpe’s watch failed to ascertain actual projects thereby causing duplication in award of contracts. The Committee found instances of REA projects awarded by the Federal Government already taken over and executed by State Governments while others were awarded by both State and Federal Governments, making the projects as dual awards for the same projects thereby leading to financial loss for the country.

It was equally noted that some contractors have not even been to project sites after collecting mobilization fees while others merely erected poles, abandoned the projects and never returned to site.

In all of the above, there was no evidence of strong action taken by the Director-General of REA to protect the interest of government.

The Committee recommends that Engr. Gekpe should be redeployed and the EFCC and ICPC should thoroughly investigate the entire REA, finances, particularly duplicated contracts and the role of its MD/CEO. Engr. Sam Gekpe.

Mr. P.M. Chigbo

The Committee found that he was responsible for duplication of figures, later found to be typographical errors, in the Energy Commission of Nigeria (ECN).

Recommendation:

The Committee recommends that Mr. Chigbo should be more careful in computation to avoid re-occurrence of such mistakes.

Mr. S.S. Hayatu

The Committee found that he was responsible for duplication of figures, later found to be typographical errors, in the Energy Commission of Nigeria (ECN.

Recommendation:

The Committee recommends that Mr. Hayatu should be more careful in computation to avoid re-occurrence of such mistakes.

Companies recommended for investigation by appropriate agencies

The companies in this category include:

Rockson Engineering/Rockson International (Owned by Arumemi-Johnson -ARIK Airline boss) for incompetence, lack of execution capacity and poor performance on Alaoji I, Omoku, Egbema and Gbarain-ubie powers stations and complicity in unreasonably high contract sums claimed for projects.

The Committee recommends that the company should be further investigated by EFCC and ICPC with a view to recovering huge sums fraudulent received on power project contracts.

Pivot Engineering for extremely poor performance on Alaoji – Umuahia 132kV DC transmission line awarded to it since May 2001; non-completion of substantial aspects of the Owerri – Ahoada – Yenagoa 132kV DC transmission line awarded to it since Y2000.

The Committee recommends that the company should be further investigated by EFCC and ICPC with a view to recovering huge sums fraudulent received on power project contracts.

Marubeni (WA) and Marubeni International for very poor performance in respect of LOT 1 (Calabar), LOT 4 (Sapele) and LOT 6 (Eyaen.Ihovbor) power stations projects, and complicity in the violation of financial procedures by obtaining and/or receiving payments in respect of construction activities not yet performed to the tune of 100% in respect of the same projects.

The Committee recommends that the company should be further investigated by EFCC and ICPC with a view to recovering huge sums fraudulent received on power project contracts.

Lahmeyer International for generalized project management failure in respect of the NIPP project, complicity in tender manipulation, negligence or complicity in over-scoping as well as overpricing of NIPP projects, abuse of due process certification of invoices for payments for works not yet done by contractor (e.g., Marubeni).

The Committee recommends that the company should be further investigated by EFCC and ICPC with a view to recovering huge sums fraudulent received on power project contracts.

The World Bank has already blacklisted the Company. Nigerian Government should henceforth blacklist it.

ABB Powerlines for failure of contracts in respect of 2nd Benin – Onitsha 330kV transmission line project and Katampe – Kukwaba (National Stadium) 132kV transmission line project.

The Committee recommends that the company should be further investigated by EFCC and ICPC with a view to recovering huge sums fraudulent received on power project contracts, and blacklisted.

Energo Nigeria Ltd for complicity in the over-scoping of NIPP Lot 3 Transmission project, and acquiescence in accepting underserved payments totaling over N13 billion, and for non-diligent prosecution after receiving payments representing about 100% of what the actual project cost should be for the actual scope, 167 kilometers, instead of the contracted 240 kilometers.

The Committee recommends that the company should be further investigated by EFCC and ICPC with a view to recovering huge sums fraudulent received on power project contracts.

The Committee recommends that the company should be further investigated by EFCC and ICPC with a view to recovering huge sums fraudulent received on power project contracts.

Chrome Consortium Energy  (Emeka Offor’s Company) for gross incompetence, non-diligent contracts, prosecution and non-performance on all projects awarded to it since 2001, especially Gombe –Yola-Jalingo 330kV SC transmission line awarded to it since May 2001.

The Committee recommends that the company should be further investigated by EFCC and ICPC with a view to recovering huge sums fraudulent received on power project contracts and blacklisted.

IOEC/Kaztec Consortium for complicity in abuse of due process and procurement of control award for NIPP Gas EPC Lot 3.

The Committee recommends that the company should be further investigated by EFCC and ICPC.

Cartlark International for complicity in the over-scoping of NIPP Lot 4 Transmission project, and acquiescence in accepting payments totaling over N4 billion

The Committee recommends that the company should be further investigated by EFCC and ICPC with a view to recovering huge sums fraudulent received on power project contracts.

KEC/News Engineering for non-performance and lack of diligent prosecution of contract for Gombe – Damaturu –Maiduguri 330kV transmission Line project

The Committee recommends that the company should be further investigated by EFCC and ICPC with a view to recovering huge sums fraudulent received on power project contracts.

Hoquado Nigeria Ltd
This company received payment sums in excess of $ 10 million since March 2006 and refused to carry out its contract on the excuse that the community landowners claimed compensation of N 18 million when interest it earned on the $ 10 million it received would be about  $ 2 million (N240 million).

The company displayed disgusting lack of diligence in prosecuting its contracts and was apparently enjoying the excuse so as to collect more money and receive interest on dollar payments while ignoring] to perform the contract thereby leading to worsening of the power problems in Nigeria.

The Committee recommends that this company should be thoroughly investigated by EFCC and ICPC with a view to recovering huge and underserved financial gains it made at the expense of the Federal Government and the people of Nigeria.

Santon Energy for failure to execute contract for Umuahia – Mbalano 132kV Trx Line.

The Committee recommends that the company should be further investigated by EFCC and ICPC with a view to recovering huge sums fraudulent received on power project contracts.

Union Allied Engineering for failure to execute three substation contracts awarded to it since 2001 contracts.

The Committee advice that the company be further investigated by EFCC and ICPC with a view to recovering huge sums fraudulently received on power project contracts. The relationship between this company and Engr. (Dr.) E.C. Ifesie should also be investigated by EFCC and ICPC.

Mogabs

The Committee recommends that the company should be further investigated by EFCC and ICPC with a view to recovering huge sums fraudulent received on power project contracts.

Atlantic Engineering for failure to execute contract for Mbalano – Okigwe 132kV transmission line awarded to it since 2001.

The Committee recommends that the company should be further investigated by EFCC and ICPC with a view to recovering huge sums fraudulent received on power project contracts.

Harlesden Engineering (Owned by Senator Ikechukwu Obiora-Anambra South Senatorial District)

The Committee recommends that the company should be further investigated by EFCC and ICPC with a view to recovering huge sums fraudulent received on power project contracts.

Author: NewsAdmin

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