Readers of this page know very well that this writer is completely opposed to a domineering public sector embarking on business investments on behalf of you and I. It is always a ruse. Any business plan by government is always a ploy by the ruling class to plunder the till. Public enterprises and direct government investments have only served effectively as pipes through which public funds are siphoned into private accounts. Public sector investment at all tiers is always a gang-up by the elite to rape the coffers. No thought for efficient application of funds or value for money is spared whenever the looter in public office brings up a public project for implementation. Development is far from the mind of the officials whenever a project is being conceived. They only care for how much is available for looting in the proposed project.
The mind-boggling mismanagement, flagrant abuse of due process and brazen theft of public funds, as revealed at the ongoing public hearing being conducted by the House of Representatives Committee on Power and Steel, have, once again, exposed the problem of parasitism and rent-seeking as a major obstacle to development. The present crop of youthful and patriotic leaders in the House must be commended for initiating the probe of the huge and fruitless power sector expenditure under the past administration of Chief Olusegun Obasanjo. I salute the Godwin Elumelu committee for the rare courage, transparency and firmness displayed so far in its bid to apprehend and bring the alleged power sector looters to justice.
Since grand corruption is always backed up by enormous political power and influence, it is always a hazardous enterprise to beam light on the hiding place of any looter. I was therefore not surprised when I heard that the committee members were receiving death threats from the beneficiaries of Baba?s power sector bazaar. The big masquerades unmasked so far at the public hearing can only be an indication that corruption has long become an acceptable mode of wealth distribution among the members of the ruling elite. I therefore, in my own little way, hereby encourage the House to complete the good work it has started by totally exposing the fraud that has brought the power sector to its knees.
When the controversy over the power sector expenditure under Obasanjo was sparked up fortuitously on January 14, 2008, by President Umaru Musa Yar?Adua at a meeting attended by the highly respected former Education Minister, Dr. Oby Ezekwesili, many had instantly dismissed the revelation that about $10bn had been spent to revamp the beleaguered sector with no result. Some commentators instantly weighed in and even staked their integrity and reputation to put a lie to Yar?Adua?s impeccable disclosure.
Finding the President?s figure utterly incredible, Ezekwesili, the highly influential former minister who is now a World Bank vice president, tactfully chose another forum a few days later to dispute the President?s figure and tell Nigerians that, between 2000 and 2007, Baba spent no more than $4bn on the troubled sector. With little tact and less diplomacy, a Senior Special Assistant to the President on Industrial Power Project, Foluseke Shomolu, who also served Obasanjo in that capacity, publicly interjected, and supported Ezekwesili that total expenditure by Baba in eight years was not more than $5bn. Mad that an aide was more loyal to the past administration than to the present, Shomolu was reportedly shown a breakdown of power sector votes under Obasanjo. Shomolu was eventually sacked. Nigerians became even more bemused when the Speaker, Mr. Dimeji Bankole, later suggested that the waste could even be more and suggested that the power expenditure could be as high as $16bn.
Those who still dispute President Yar?Adua?s memorable statement that Baba spent $10bn with nothing to show for the colossal expenditure are now invited to see the breakdown of the votes as revealed by the ongoing inquiry. In eight years, and in the name of revamping the power sector and supplying more electricity to Nigerians, the Power Holding Company of Nigeria alone got $3.2bn, the National Independent Power Projects has gulped $3.07bn.
The Rural Electrification Agency got $500m, while the Energy Commission of Nigeria got $10m. The Nigerian National Petroleum Corporation took a total sum of $1.62bn to revamp the sector, while PHCN collected and spent a total revenue of $4.06bn to run the crippled sector. The nation also took a World Bank loan of $460m for turning the sector around.
The total expenditure so far revealed is in the neighborhood of $13bn. But electricity supply has become more chaotic than it was before all these allocations were incurred. The present electricity crisis is worse than it was in 1999. President Yar?Adua has, therefore, been vindicated in his statement that more than $10bn went down the drain under the watch of his predecessor.
The question then is: Where has all the money gone? That question is being clearly answered by the ongoing House probe. From the revelations, the overriding concern of the past administration was not to improve power supply, but to handsomely compensate party financiers and supporters. It has been revealed, for instance, that a German firm that had been blacklisted by the World Bank for allegedly ?sorting government officials in some African countries,? got a N600m contract to produce the feasibility study of the Mambila hydro-electric power project. The committee got infuriated when it learnt that Lameyer got N370m but failed to execute the project. The German firm was immediately ordered to refund the money.
The PHCN was also alleged to have ripped off the nation by awarding several phoney contracts. The committee consequently asked the notorious inept power company to return a total sum of $142m to government coffers. All the CEOs of power stations that gave evidence said that the rehabilitation contracts were awarded in Abuja without reference to the heads of power stations. Many of the PHCN consultants took the payments for projects as their own share of the so-called national cake. At one of the hearings, the committee heard that, without reference to the ministry, that the government awarded 300 contracts and made 340 payments in respect of the National Integrated Power Projects. In many cases, the contractors were paid more than 90 per cent of contract sums, when they had only implemented less than 20 per cent of the project.
The contracts were unilaterally executed by Obasanjo who was his own petroleum and energy minister, through the Presidential Steering Committee made up of Joseph Makoju, Shomolu, Liyel Imoke, and Funso Kupolokun. In one of the hearings, the committee heard that the former military head of state, General Abdulsalami Abubakar, is the chairman of one of the firms that partook in the power sector bazaar. Another firm run by Senator Aniete Okon, who was the first national publicity secretary of the ruling party, was also alleged to have been awarded many NIPP projects. The award of contracts under the power scheme was thoroughly politicised. In spite of the due process mantra under Obasanjo and the ......neyed war against graft, there was no tenders? board and there was no competitive bidding for the contracts.
The politicians were so much in a hurry to pay themselves that they completely forgot the public procurement procedures. But revealing as the probe is, there were many more inquiries in the past whose disclosures and recommendations were swept under the carpet. The lesson from the ongoing investigation is that the reform of the power sector must be hastened up. The power sector should be taken away from the hands of predators in government. The centralised control of power supply should be dismantled forthwith. Apart from immediately selling off the unbundled units of PHCN, sub-national governments should be empowered to fully engage the private sector in the supplying of electricity to their people.
By Adebolu Arowolo