Seven days of testimonies at the public hearing of the House of Representatives Committee on Power and Steel organized to unearth the mystery behind the huge expenditure of $16billion on the sector with no commensurate results has confounded Nigerians with the amount of colossal waste the power sector turned out to be in the eight years of President Olusegun Obasanjo.

It started like what sounded like an innocuous remark by President Umaru Musa Yar'Adua, who posited while receiving in audience World Bank's Mrs. Oby Ezekwesili that his predecessor expended about $10billion on the sector while at the helm of affairs with virtually nothing to show for it.

The House of Representatives, however, viewed the revelation seriously and through a multi-partisan motion sponsored by its Minority Leader, Hon. Mohammed Ali Ndume, but backed by over 100 other members, mandated its Committee on Power and Steel led by Hon. Ndudi Elumelu to investigate the claim and report back to the entire House for further action.

Before the committee could settle down to its assignment, it came to light that the amount spent on power especially the National Integrated Power Plants, NIPP, over the period may in fact be more than what the president disclosed as, according to the speaker of the House, Hon. Dimeji Bankole, there was another $6billion extra budgetary expenses on power during the period under review.

He said this while outlining his plan to adopt an "input-output and outcomes approach" in the legislature that would ensure transparency, accountability and good governance, saying "only if we plan like this and monitor output periodically would we be able to prevent a situation where $16billion was spent on power reforms with negative results."

His plans may have come too late to save the billions of dollars that have apparently gone down the drain but Bankole demonstrated a resolve to avert such development in the future by throwing his full weight behind the House's resolution. Once it was decided to probe the sector, the House moved quickly to dispel insinuations that it was targeted at former President Obasanjo as, according to its chairman of Media and Publicity, Hon. Eziuche Ubani, it would be insulting to Nigerians to suggest that it was targeted at the former president or any individual for that matter.

According to the House spokesman, "Anybody who says that is trying to take Nigerians for granted because, several times, we had probes that didn't lead anywhere. What we are doing is a very simple thing. We are trying to audit the power sector in the last eight years and the take-off point is, do we have a problem with the power sector in the country? The answer is yes. Does it affect every part of this country? The answer is yes. Which home in Nigeria does not feel the impact of the failure of the power sector in Nigeria? Almost everybody."

He said that the lawmaker could not continue to turn their backs on issues as important as energy saying, "Are we going to shut our eyes and allow things to continue like that? Businesses are leaving the country and relocating to neighbouring countries, to Ghana, wherever.

It will be irresponsible of anybody of us to sit down and then make a law to target anybody. That would be taking Nigerians for granted, playing with the mandate Nigerians gave to us. That would be rubbishing Nigerians." He stated that the House was particular about finding a lasting solution to the long-standing problem of the power sector more especially as the lawmakers were responsible for appropriating moneys for such endeavours, adding that "what we are trying to do is to find a way to solve a problem because a lot of things have been done to be able to turn around the power sector and it is not working."

The House spokesman stated further: "The point is that we want to find out why those things are not working. We've thrown a lot of money into the sector. A lot of money was thrown at the sector in the last eight years. Therefore, if we appropriated those moneys given to that sector, we also have a right to ask questions.

"Not just the money aspect. We are trying to review the process, the policies and the programmes to see if there is anywhere that is not connecting, why we still haven't been able to solve the problem even by half. Then in the process, if there are evidences of waste or corruption or whatever that would be incidental to the hearing or investigation. Anybody who connects that to politics about one man who was president of the country or so is trying to insult Nigerians. That's not what it is."

With this in mind, the committee invited memoranda from government officials who served between 1999 and 2007 including former ministers of power, three of whom- Liyel Imoke of Cross River State, Danjuma Goje of Gombe State, and Olusegun Agagu of Ondo State - are now state governors. Ditto the former chairmen of the Senate and House committees on power which included another serving state governor, Gabriel Suswam of Benue State.

Others that had been expected to present memoranda are former ministers of finance, all Auditors-General of the Federation, Accountant-General of the Federation and Attorney-General of the Federation, all governors of Central Bank of Nigeria within the period, special assistants to the minister of power, the Inspector General of Police, the Armed Forces, Secretary to the Government of the Federation, state governors and embassies of foreign countries, local government chairmen, ministerial departments, civil society, labor, corporate organizations, Nigerians in Diaspora among others.

Hon. Elumelu made it clear that even though the House was determined to unravel the mystery behind the non-performance of the power sector, it had not accused anyone of committing any crime so far but "we have to get to the bottom of this rot and prepare the way to cleanse the Augean stable."

The first day of the inquisition witnessed the appearance of Suswam who wasted no time in faulting the implementation of NIPP over which he said the sum of $3.2billion had been deducted from the Federation Account being the share of all tiers of government towards its funding.

Angered by the failure of the projects, however, the states decided to demand a refund of the money. Giving a background of the projects, he told the committee that NIPP was established following the setting up of the "Excess Crude" account by the National Assembly which led to the agreement between the federal, states and local governments to contribute from their share to the building of power plants to service the oil producing areas in the South-South region.

"All the states and local government agreed and a certain amount of money was taken from the share of states and local governments and set aside for NIPP. The NIPP so to say is not part of government funds the National Assembly appropriates. That is why the states are now saying that they must return our money."

He regretted that after billions of dollars had gone into the project, there was nothing much to justify such contributions from the states and local governments. "We contributed $3.2billion and up till now there is no sign that as we were hoping, in 2007 we will have 10,000 megawatts of electricity." He lauded the initiative but remarked that "there is no reason we are where we are now if the funds were properly applied."

Imoke and Agagu who were former ministers of power and steel under whom most of the expenditures were carried out, also testified and defended the billions of dollars expended. Imoke in particular who was the principal actor in the sector having also headed the Presidential Technical Committee raised by Obasanjo, which reported directly to him, was passionate in his defense of government, saying, "We were faced with a number of challenges including some contracts we met which we had to renegotiate. One was 150million euros and we brought it down to 110million euros.

Before the official advent of Due Process, we introduced procurement of equipment from original products manufacturer branded from the factory with NEPA marked on them to reduce vandalization.

The cost comparison on the procurement by NEPA and the technical board, there was considerable saving. There were a number of improvement and efficiency. The cash collection was N1billion a month at that time. When I left there it was N6 billion. The funds were ploughed not just to NIPP but salary of staff, gas purchase, etc.

Considering the efficiency of that time, the investment did not go to waste. In that intervening period generating capacity grew consistency during the period from 1600 to 3600megawatts of electricity to this nation. I don't think that record has been met since. There is no quick fix to the rehabilitation. Short of expansion of the grid and new capacity, we are going to be faced with challenges."

Specific question

Addressing the specific question of the, NIPP, Imoke also stated that, faced with those challenges, without adding new capacity, nothing could be achieved. He said NIPP was conceptualized in 2004 with the objective of creating a robust national grid.

"There are misconceptions about how NIPP came into being. Former President (Olusegun Obasanjo) convened a National Economic Council meeting presided over by himself instead of the Vice President and he expressed the need to generate new capacity. He got the endorsement of the governors to set it (NIPP) up and fund it from the proceeds of the Excess Crude since it was not in the budget. President sought the agreement of ALGON. The structure was presented as a project which belonged to all tiers of government and as such a company had to be set up which had all tiers of government represented.

The Niger Power Holding Company was set up.

"The committee to implement the project was headed by the vice president and had governors of the states where they are located and representatives of the local governments. We all belonged to this committee that was supposed to superintendent over it.

There was no money budgeted for NIPP. We had over 50 meetings during my time. Towards the end of the administration, there were differences between the president and the vice president and meetings were not holding regularly and all projects were taken to Federal Executive Council for approval. There are documents to prove that all projects went to Federal Executive Council.

We engaged several international consultancy firms and the best hands in NEPA." He said that the administration standardized equipment supply and caused all procurement for NIPP to go through international bidding process. "They were submitted to Due Process Office for certification.

They had performance bond and guarantees to make sure contractors don't abscond. Letters of credit were opened by us and could only be drawn based on milestone. It would be unbelievable to say that contractors who haven't been to site have drawn them 100%. If so, there are questions that must be asked. I believe the committee will clear the air."

The governor remarked: "Nigerians need NIPP. We don't need to politicize or criticize it. No reason why a project with letter of credit should not be delivered. No excuse for non-performance," and recommended: "It is imperative that the committee looks at what we are doing about reforms in the power sector. It is important that the committee looks at the current structure of the utility and advise on it. There is also the 25-year rolling plan which if followed will address the problem."

Cost saving measures

On his part, Agagu remarked that even though he could not give specifics, all the transactions in his time followed due process. He told the committee: "The transactions carried out during my time followed due process in accordance to extant rules. They are available for scrutiny. There were cost saving measures for instance in Papalanto signed in my time. We created hope for the power sector.

I met 1400megawatts. Transmission and distribution were near collapse. Through the support I received from the former president and the technical board and NEPA, we were able to increase power from 1425 to 4000megawatts and we improved transmission and distribution. In my time, there was no load shedding by NEPA; the records are there. We built a new Afam Station, consummated Omotosho, Gereku and Papalanto.

They were built to add more than 1500megawatts. Although their executions were delayed, they are now functional. Many more electricity projects were built and many on-going. We developed a draft power reform bill approved by Federal Executive Council and submitted to the National Assembly to attract the much needed private investment. All these achievements were achieved within a budgetary provision of less than N1.2billion budgeted by the National Assembly."

While he admitted that "the power situation leaves much to be desired" he however added: "It is not true to say nothing has been achieved.

The Federal government has not invested enough or done enough to bring in investment as done in other countries. Privatization should be looked into."

He also spoke on the alleged award of contracts to unregistered companies saying that it was not the fault of the ministers if indeed a thing like that happened. "It is possible. There is a ministerial

tender's board. The minister is not a member. If the contract was lower than N20million, it would be minuted to me. I don't think any minister would be dutiful enough to check registration. Let's look at those who passed those companies. To throw the blame at people at the head at political level will not help us. The bureaucracy should be examined."

The CBN governor, in his submission, explained the role of the bank as being a mere banker to the Federal Government, saying, "CBN is a banker to government. Our duty is not different from your relationship with your bank. If you write a cheque, we verify, when the mandate is correct, we provide the service. The distinction here is that we need the purpose so that we can send it to the minister to reconfirm and once it is reconfirmed, we pay."

They spoke on the day when the Corporate Affairs Commission, CAC, revealed to the committee that at least 34 of the companies which had been awarded the power contracts under NIPP were not registered. The public hearing was also to learn that prominent Nigerians including former Head of State, Gen. Abdusalam Abubakar, had interests in many of the defaulting companies.

He had been named as the chairman of Energo Nigeria Limited which in 2003 got a N19billion transmission substation contract, collected $13billion in advance payment yet the consultants don't even know the site of the project that was also revealed to have achieved less than 5% implementation in spite the hug amount collected. Also named as a member of the Board of Directors in the company was the former managing director of defunct National Electric Power Authority, NEPA, and later a minister, Alhaji Hamza Ibrahim.

There was another twist to the investigation when the managing director of NIPP, whose identity changed in the course of the investigation to the managing director Niger Delta Power Holding Company, Mr. James Olotu, declared, in his testimony, that NIPP was illegal because it was a mere contraption agreed on by the federal, states and local governments in their desire to solve the problem of power in the country.

According to him, "NIPP does not have jurisdictional powers. It cannot be sued or sue. In essence it is an illegal organization. What happened was that the federal, states and local governments came together to find ways of solving the power problem."

The minister of finance, Dr. Shamsudeen Usman, confirmed this when he was confronted by the committee on the legality of deductions from the Excess Crude Account to fund NIPP. He said Government under Obasanjo merely looked for a way to provide some legal background for drawing from the fund that was not under the appropriation purview of the National Assembly.

More revelations were made when the Bureau for Public Procurement otherwise known as Due Process declared that it certified projects worth N195.6billion or $239million for NIPP but was not responsible for approving the over $3.2billion illegally paid for the projects as it was a Federal Government intervention programme. Its acting director Engineer Emeka Eze also remarked in his testimony that NIPP contractors who may have been paid about N3.3billion in over inflated contracts may be made to refund it.

With the public hearing over,the committee now begins the business of sifting the tonnes of document it received with a view to making a recommendation to the House which would form the basis of further action on the probe. No date has been set for the submission of the report but there is little doubt that Nigerians would be anxious to see the outcome and its bearing on the epileptic power situation in the country.

However, the House has given indication that it may recommend the prosecution of failed NIPP contractors and recover every kobo that has not been accounted for.

"What we have seen has surpassed our expectations. I think the public hearing is timely. The investigation of the power sector couldn't have come at a better time than now. When we started, many people thought it was going to be a waste of time, but you can see what we have been able to achieve.

We have now identified people who are part of the problems in the sector. We are going to invoke our powers under the Constitution against anybody whenever it is necessary to do so. We have the powers of investigations, and we would recommend to the appropriate authorities like the Attorney General's Office and other relevant agencies to prosecute anybody we find culpable," the House spokesman, Ubani, told Sunday Vanguard, weekend.