There was no N42bn contract scam in Power Ministry ―Fashola

babatunde-fashola
Babatunde Fashola, Minister of Works, Power and Housing

MINISTER of Power, Housing and Works Mr Raji Fashola, on Thursday, told House of Representatives panel investigating alleged infractions in two contracts awarded by the ministry that there was no fraud in the processes for the award of the contracts.

The House had through resolutions mandated its committees on power and public procurement to investigate the status and viability of fast power program  ― accelerated gas production for power generation by the federal ministry of power and another on the need to investigate the fraudulent award of contracts amounting to N42 billion on rural electrification scheme in some federal universities.

During his appearance before the committee, the minister said that in the first place there existed no contract amounting to N42 billion for rural electrification scheme with some federal universities as the pilot scheme.

He, however, said that the federal executive council approved N38.9 billion for the same project with a paltry budgetary allocation of N9billion by the National Assembly from the N20billion the ministry requested for.

Fashola who gave a detailed brief on both contracts said the rural electrification scheme followed provisions of section 88 (4) of the Power Sector Reforms Act which empowers the Power minister to develop a rural electrification strategy for the country. On the fast power program, it was an investment partnership between government and GE electric.

He said the framework did not materialise until the inception of the Buhari administration in 2015 who approved the rural scheme that was to bring electricity to the rural populace where a great number were without electricity.

According to him, under the procurement Act the ministry was obliged to pay 15 per cent of what was awarded from the N9 billion appropriated, stressing that, 9 Universities and 8 Teaching Hospitals  were to benefit from the pilot project which also has the Nigeria Universities Commission, NUC, and the university Vice chancellors as critical stakeholders who were similarly carried along.

According to him, under the procurement Act the ministry was obliged to pay 15 per cent of N9 billion appropriated, stressing that, 39 Universities and 8 Teaching Hospitals  were to benefit from the pilot project which also has the Nigeria Universities Commission, NUC, and the university’s Vice chancellors as critical stakeholders who were similarly carried along.

He noted that six International power firms, which included, General Electric, GE,  Siemens, Sterling Wilson were technically selected by the Ministry upon approval by the Bureau of public procurement to do the selective bidding.

Two companies finally won the bids while the project was broken into 9 components, after it got BPP’s certificate of no objection which was also approved by FEC on December 20, 2017.

He noted that from the N9bilion of the N20bilion it projected and requested, the funds were utilized for the purchase of turbines, solar panels and other heavy electrical equipment and not the installation of street lights as reported on some section of the media.

The power minister spoke similarly of the fast power programme, that the project was a partnership between General Electric and the Nigerian government with the former contributing 85% investments in turbines and the latter 15 per cent mostly in miscellaneous expenditure and security. He noted that the development has resulted in the four Afam stations functional, operational and contributing tremendously to the National grid.

“Today the turbines are in place,  we implemented funding appropriately. It was an investment partnership that will in time generate N26.3billion Income” he said.

The Managing Director of Rural Electrification Agency (REA), Damilola Ogunbiyi who was also at the hearing said that the project was designed for generation of 28.56MW covering nine federal universities and one Teaching Hospital across the six geopolitical zones.

The MD added that “I would like to unequivocally place it on record that no contract has been awarded by REA amounting to N42 billion on the Rural Electrification Scheme in some Federal or any other Universities.

The REA boss also said that “Incidentally, consequent upon the voluntary withdrawal of two of the bidders (Siemens & Watsilla), only two of the three remaining bidding companies (Metka and Sterling & Wilson) were found substantially responsive to the solicitation requirements at the end of the procurement exercise. These two firms were then recommended for the award of contracts”.

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