In 16 years, N2.740 trillion went down the drain in the power sector, Senators heard yesterday.
This was the submission of the Permanent Secretary, Ministry of Power, Ambassador Godknows Igali, at the Senate’s two-day investigative hearing on the troubled sector.
The hearing was inaugurated by the upper chamber to unearth alleged unwholesome practices in the sector between 1999 and 2015.
The Senate mandated an ad-hoc committee on the Power Sector, headed by Senator Abubakar Kyari (Borno North), to conduct a comprehensive hearing to expose corrupt practices and establish how much the Federal Government has spent on the sector between 1999 and 2015.
Igali told the committee that of the N1.6 trillion appropriation since 1999, N948 billion was actually released to the Ministry of Power and its agencies within the period.
The Permanent Secretary added that N155 billion was also released to the ministry to cushion the effects of the shortfalls in expenditure within the same period.
Igali said at the inception of democracy in 1999, the government inherited a sector where everything was dormant with no new generating units built except the one built in the 60s.
He stressed the need for consistent investment in the sector.
He noted that for over 100 years when the first electric power came to Lagos, power remained in the hand of government because there was no law allowing individuals to invest in the sector.
He said: “It is a heavy capital intensive industry but if you get it right people are ready to pay. We have not been consistent with our investment. From 1999, despite the interest of government to infuse money in the sector, government has not been able to meet what the sector requires.”
Igali also told the committee that the country’s electricity generation had risen to about 4600 megawatts from 3500 megawatts in 2013.
He attributed the rise in generation capacity to reduced vandalism of power equipment.
The permanent secretary also said that the NIPP is the greatest contributor of power to the National Grid.
He noted that post-privatisation era, vandalism of power equipment has gone down.
Igali said that from his evaluation “things will be better in the sector very soon”.
On the disengaged staff of the Power Holding Company of Nigeria (PHCN), Igali said only 2000 had not been verified and paid their severance allowances.
He explained that most of those involved who claimed to be former staff of PHCN have no valid document to back up their claim.
He, however, said that the final verification would soon be conducted to determine the veracity of the claimants.
The Permanent Secretary told the committee that proceeds of privatisation was used to settle claims of over 46,000 workers by the Bureau for Public Enterprises (BPE) through the office of the Accountant General of the Federation and the Pension Commission.
The Managing Director of the Niger Delta Power Holding Company, Mr. James Olotu, told the committee that the National Independent Power Projects (NIPP) received $8.23 billion.
The $8.23 billion, which came from the excess crude account, translates to about N1.640 trillion the NIPP spent on its activities.
The committee wondered why local governments were not represented on the governing board of the NIPP even when they are part of the sponsors of the NIPP projects.
Olotu explained that the framers of the NIPP law might have thought that bringing in local government chairmen as NIPP board members would make it unwieldy, considering the number of local governments.
He said governors on the board are representing local governments in their geo-political zones.
The committee asked Igali to submit to it audited accounts of the ministry and its agencies.
The audited account will enable the committee to know what was actually released to the ministry, the chairman said.
The committee was also not comfortable with what a member described as notable contradictions and discrepancies in the presentations of those who appeared before the committee.
The chairman said in most of the submissions, there were no project costs; only budget allocations.
Senate President Bukola Saraki, at the inauguration of the committee two weeks ago, charged it to conduct a comprehensive probe of allegations of questionable practices in the sector.