FORMER Minister of Finance, Dr. Ngozi Okonjo-Iweala, yesterday told the House of Representatives Committee probing the alleged spending of about $16 billion on the power sector in 10 years without commensurate result that former President Olusegun Obasanjo approved Due Process waiver for the controversial National Integrated Power Plants (NIPP) to fast track payments to contractors.
But her former colleague in the Ministry of Solid Minerals, Dr. Oby Ezekwesili, said the Bureau for Public Procurement (Due Process) knew nothing about the waivers.
The committee said yesterday that Mrs Esther Nenadi Usman who succeeded Dr Okonjo-Iweala as Finance Minister had declined its summons to come and testify.
Dr Okonjo-Iweala and Dr Ezekwesili flew in from Washington to testify before the House Committee on Power and Steel in a special public hearing organised by the committee having failed to appear initially.
Dr. Okonjo-Iweala denied that her ministry was responsible for approval of money for the Ministry of Power and Steel which enabled it to obtain the funds for the NIPP projects.
Her words: “With regard to who was accounting officer at that time, I want to make it extremely clear that the Minister of Finance cannot be accounting officer for the Ministry of Power and Steel or for any power project.
That is not in the terms of reference of the Ministry of Finance. Any notion that Finance was the accounting officer for the Ministry of Power, I want to debunk that immediately.
“I want to repeat: I knew absolutely nothing about the contracting and tendering process for these power projects. What I do know is that when tenders and contracts were awarded, they presented a waiver letter which to us was the place of the Due Process because Ministry of Finance would not disburse money unless you present a certificate for payment.
That was the procedure we put in place.
“It was not there before and it was for the sake of transparency and due process. Now, if you present a waiver, that is taking the place of the certificate but it is still a documentation that we can disburse this money and that was what we did. So, there is no question of being accounting officer for any NIPP project or for any parastatal.”
Asked by the chairman of the committee, Mr Ndudi Elumelu, to explain the position of waiver, she said: “Of course, the honourable chair, you said you have seen evidence from the present minister of finance, a letter. What I have is my recollection.
“My recollection is that because we needed a document as I said in order to follow our procedure, we cannot just disburse money without some certification, a waiver letter was presented to us that was sent by the former minister of power and steel to the former President and it was approved and I recalled copied to the Minister of Finance, the Accountant-General of the Federation and I think the Central Bank of Nigeria.”
Asked to name the former President, she said: “Well, this is very factual. Given the period 2003 to 2006, the Minister of Power and Steel was Sen. Liyel Imoke and the President of the Federal Republic of Nigeria was President Olusegun Obasanjo.”
She added that the argument for waiver was that it was needed to fast track the NIPP project which was expected to added 10000 megawatts to the national grid.
She said the NIPP was established and funded from the Excess Crude Account and about $2.5 billion had been set aside to target 2000MW by 2007 “because the whole country was held hostage by the power sector.”
She argued that certain decisions might have been taken at the Ministry of Finance without her knowledge as she was away many times from the country to negotiate debt relief but added that while she was the Minister the sum of N54.6 billion was budgeted for capital power projects in 2003 but N54.4 billion was released while recurrent was N4.3 billion of which N4.1billion was released.
In 2004, N91.1 billion was for capital while N71.8 billion was released and N3.38 billion was for recurrent and N3.3 billion was released. For 2005, N74.4billion was budgeted for capital projects and N71 billion was released while N3.3 billion was budgeted for recurrent of which N3.1 billion was released.
On the use of funds from the Excess Crude Account, she said the President had explained that he had agreed with state governors to use the money to take care of pressing needs such as power and roads as well as repay some debts.
“I also recall that the plan was to take the money and refund it after. But since I left I don’t know or can recall what has happened,” she said.
She recalled the measure the administration put in place to ensure due process in the finances of the Federal Government, saying: “When we took over we started publishing the revenue of all tires of government. We also set up measures to have a Due Process Certification for projects.”
Dr. Okonjo-Iweala contended that only the sum of $874 million was released for NIPP during her tenure as Minister of Finance, saying most of the disbursement to the power sector was made after her exit from the ministry. She also advised the committee to hold the then Minister of Power and Steel accountable for all the transactions that took place during the period under review.
“I had nothing to do with the contracts and in fact it is not the responsibility of the Minister and any attempt to drag the ministry into it is unfortunate. It would only be resolved by sitting the Ministry involved down with the contractors. It is only then that you can resolve the differences in figures,” she said.
In her testimony, Dr. Ezekwesili said it was her concern about the state of the power sector that made her to pay her way from Washington to attend the hearing adding that the need for transparency had influenced the setting up of the Due Process office.
According to her, “it was with a singularity of purpose that we established Due Process. Before the office started, we commissioned a specialized study into how procurement had happened in this country before 2002. The study revealed that Nigeria may have lost several hundreds of billions of naira from flagrant disregard for due process.”
She argued that the certificate of due process was not to ensure payment for contract but that it “enables you to go the Executive Council FEC to get final approval.”
“For projects that have gone to the FEC the rule says the 25% of the amount will be paid upon the contractor presenting a clean copy of guarantee from a reputable bank. It also says payment would be paid according to the stages of the project.
“That you have a certificate for award does not mean you have a certificate for releasing funds from the public treasury.
On the question of conflicting figures presented by President Umaru Yar’Adua, the Accountant-General of the Federation and the Central Bank Governor as the amounts involved in the NIPP projects, she advised the committee to stick to the presentation made by the apex bank.
“Capital investment by Federal Government can’t be beyond what CBN has said it released from the FG coffers. When the Central Bank of a country says X amount of money is paid, that ought to be the reference,” she said.
Mrs Ezekwesili advised the National Assembly to strengthen the Due Process Office, saying: “You must give your unalloyed support to the Bureau. They used to report us to all your committee. People will start projects without even an engineering design. I used to be a frequent visitor to the National Assembly because of my insistence that the rule should not be violated. We were inflexible as far as the rules of the game were concerned. You can empower the Bureau.”
She also spoke on the allegation of unregistered companies getting contract awards under NIPP, arguing that the Due Process office had stringent procedures for fishing out unqualified contractors but added: “We discovered there could be some shenanigans and I wrote a letter to CAC to install a software that shows a listing of all registered companies in the Due Process office.
It is possible that what you are referring to may be contracts awarded before 2002 before the office was set up or before the software was installed.”
Usman shuns panel
On the failure of Mrs. Nenadi Usman to appear, Elumelu called on Nigerians to convince her to appear to defend herself against issues that had been raised against her.
“If you look at the contract for Mambilla Power project, she signed it. If you look at the $2.5 billion that was taken out of the Excess Crude Account, she signed it. Nigerians should please beg her to appear because we are not here to pass judgment on anybody,” Elumelu said.
Meanwhile, the Governor of Plateau State, Air Commodore Jonah Jang (rtd) who also testified yesterday, urged the Committee to ensure that at the end of its investigations, those responsible for the rot in the power sector are made to account for it.
Govs seek refund of contributions
His words: “All the Governors have requested that our money be returned to the federation Account, reason: If you look at it, the Federal Government takes 51% (of the excess crude account revenue), and it has enough money to fund the NIPPs (The National Integrated Power Projects), and considering the level of corruption that has bedevilled this nation, and the huge sums of money expended in the power sector, without results those that misapplied funds should be accountable for it.
“Because of my dissatisfaction with the packaging of the NIPP, I am making a call on the Federal Government to return the share of the states to the Federation Account.”
Jang who was first to testify before the Ndudi Elumelu-led Committee, at 1:51 pm, stressed that “No state can grow economically with the state of the NIPPs and the power sector in the country.”
Earlier in his submission, Jang submitted that there were “No generating plants in Plateau State at the moment and no NIPP projects or power stations in the state. The only power distribution company we have in Plateau State is NESCO, which has been there since 1928. There is no NIPP project in Jos or Plateau State. The NIPPs are located out of Plateau State.”
The Governor lamented that even the regular power projects financed from the Federation Account were abandoned, advising that huge sums of money may continue to be wasted in the sector if nothing was done to reverse the trend.
Jang gave his testimony following an earlier request by the Committee that all the Governors, whose Governments jointly financed the NIPP projects from their share of the Excess crude Account should submit memoranda on their agreement with the Federal Government.
Rot not limited to power sector — Usman
Meanwhile, Minister of Finance, Dr. Shamsuddeen Usman, has said that the rot revealed by the probe of the power sector by the House of Representatives Committee is not limited to the sector as the same level of rot was observed by the new administration when it assumed power last year.
He stated this while addressing the Annual General Meeting of the Nigerian Economic Summit in Lagos yesterday noting, “ Despite the gains of the recent past, infrastructure, both human and physical remains weak, despite heavy investment made in the past eight years. The country is still besieged with the problems of ill-conceived projects.
The budgeting and monitoring system calls for drastic improvement, as we are witnesses to a significant gap between budget utilization and the actual outcomes. In the light of the importance of these issues, we are conducting a number of studies in order to gain an in -depth insight of them and come up with recommendations that will constitute significant inputs into policy formulation going forward.”
