INTERVIEW: No single case of corruption in NERC under my leadership – ex-NERC boss, Amadi

Amadi

Twenty-four hours after completing his tenure, immediate past chairman of the Nigerian Electricity Regulatory Commission, NERC, Sam Amadi, spoke with PREMIUM TIMES about his challenges, achievements in office as well as his ambition. In a two parts interview with Business/Economy Editor, BASSEY UDO, Mr. Amadi said he left behind a credible NERC leadership, electricity market.

Excerpts:

PREMIUM TIMES: Your tenure as chairman of NERC ended yesterday. You have come to the point where Nigerians and posterity would pass their verdict. What would you say that would be?

AMADI: I want to write a book. The tentative title of the book is ‘Mission (Un) Accomplished”. That means mission either accomplished or unaccomplished, depending on what people choose to see my tenure in office.

I see myself as lucky to have managed the country’s electricity sector when all these reforms were happening. This is a mission accomplished, because I set out to create a credible leadership in NERC and the electricity market; to make NERC an effective regulator capable of accomplishing its regulatory mandate.

Before we came, the Nigerian electricity market was totally without credibility. Former commissioners were hounded out of office on allegation of corruption. Even the Multi-Year Tariffs Order (MYTO) was not being implemented properly.

Clearly, we needed to make a clean break from a NERC that was conflict-ridden, dysfunctional, and lacking in standard procedures and credible processes. That was why NERC was the first to sign on to the Freedom of Information Law.

NERC has remained the only agency to publicly declare the codes of conduct for the commissioners to commit to good conduct, namely zero tolerance for corruption, and good conduct.

We have created a transparent process where resolutions and decisions of the commission are warehoused. So, we achieved the first pillar of creating a clear and transparent regulatory market.

We have also created a regulatory framework for the industry and a step by step process for tariff review. Everybody knows what the rules are, and the ones NERC would follow.

We have succeeded in establishing a credible electricity market. Today, the World Bank and US EXIM Bank say the Nigerian electricity market is the most transparent and credible in Africa, because it is bankable and reliable.

Today, we have licensed over 144 independent power producers capable of generating 32,000 megawatts, MW.

The tariff order, methodology and pricing framework, interconnectivity agreements, grid codes, standard codes and the various embedded generations are now creating more investments in the industry. We have created a local content regulation to promote local participation in service delivery.

We may not achieve reliability, but we have established the framework. We have now de-risked the value chain. Now, we know what to do with gas supply. We have a commercially viable gas price at $2.50 and 80 cents for transport. The regulatory problem of gas pricing has been cured.

Before privatization, the Nigerian DISCOs were bankrupt and unable to pay for the power collected. There was no bulk trader as an off-taker, because the DISCOs were not credit-worthy to buy power. All licenses could not achieve financial closure.

In 2012 the Nigerian Bulk Trader Company was created as a government capitalized owned off-taker to guarantee DISCOs and GENCOs for power supplied.

Today, some of these licensed companies have signed power purchase agreements and built market support instruments – credible tariffs, solid regulatory frameworks, codes standards and footprints of consistency.

There is massive confidence that investors can trust the country’s electricity market and micro-economic fundamental change to re-index.

Again, its mission unaccomplished for me, because we are yet to produce the level of electricity we want, and Nigerians are yet to enjoy a minimum of 20 hours of electricity supply daily.

But in the next three or four years, if the country produces 10,000 MW, I hope somebody would remember that happened because we built a strong foundation for the industry.

PT: Which of these missions posed the most challenge to realize?

AMADI: I would say building an effective and credible NERC; and perhaps, achieving regulatory mandate towards adequacy and reliability.

Three months ago, we set up a task force to improve the electricity market. We wanted to understand the bottlenecks and clear the system. We thought the problem was with gas supply. But when we had gas, generation reached about 5,000MW.

However, there was another problem of load rejection. Because the DISCOs’ network was frail, available power could not be taken, and the generators could not ramp up power.

The generators had to tell gas suppliers that they could not take all the gas supplied to avoid incurring more liabilities.

Today, the country has lost about 1,000 metric tons of gas when about 4,800 MW was generated few months ago.

For the generators to rapidly improve those networks, they need massive investment of capital. Without financial viability and strong network, sustainable electricity system cannot be guaranteed.

The operators require huge financing, either through funding from financiers or revenue recovery by increased tariffs collection.

PT: But, that would mean extra burden on the consumers?

AMADI: Extra burden? Yes, increased tariff is more pay. But the consumer is paying more to get more value. If we have proper tariff that allows for investment and incentive for efficiency, it will ultimately work for improved services by creating commercial viability.

The first and second years, the tariff by consumers will not pay fully for the investment DISCOs make for service delivery.

But, in the third and fourth year, they will be able to have full recovery of that cost, as the tariff and costs become fully aligned. NERC has benchmarked the tariff within a certain threshold, so that the increase by the DISCOs is reasonable and fair.

The tariff framework imposes obligations on the DISCOs, namely on metering to the customers; no over-estimation. This means that the customer has to pay the last bill, and in case of a dispute, use it as a benchmark till he is fully satisfied with the resolution of the dispute with the operator. That is unlike in the past where the customer was expected to pay his bill or disconnected.

Under the new framework, NERC had said that if after six months the DISCO does not meter the customer, no matter how much improvement on power supply, the consumption would be capped at a charged not beyond a certain amount.

As a regulator, NERC has always argued that fixed charge should not be removed arbitrarily, but through a regulatory process. But, it has discovered that everybody can be on the same page.

Customers have to pay their bills, while DISCOs will not be guaranteed revenue without service. Under the new framework, the revenue of the DISCOs is now tied to 100 per cent availability of electricity supply.

If for its negligence a DISCO allows its transmission line to collapse, it would lose revenue per kilowatt hour for the period that line remains unfixed. This is one of the biggest things NERC has done. It is a big game changer in the electricity market.

In the next two to three years, this will make the DISCOs more efficient; the customers much more comfortable to pay bills, while creating a better relationship between consumers and the operators. This will help the regulator and government introduce much more critical and drastic measures required to move the market to a more efficient level.

PT: Would you say in all sincerity that you have left the industry now better than you met it?

AMADI: NERC has really done excellently well. The indicators are clear. The success of a regulator is measured by its credibility. Nobody in this industry, even if an unfair minded enemy of Sam Amadi, can accuse NERC of corruption. The regulator must not only have integrity, it must live above board.

In the last five years, there is no single evidence of misappropriation, corruption or allegation of abuses. NERC has made big ticket decisions running into billions, particularly in licensing. Nobody can accuse NERC under my leadership of a single whiff of corruption.

PT: What about the multi-billion severance package you and members of the Commission were recently alleged to have approved for yourselves?

AMADI: That allegation and questions about how much one earns are that because there is nothing else to use to tarnish our image. This is what is called tenure battles to achieve hostile takeover, where parties interested in taking over office create unfounded reputation issues to make the shareholders look at the company in certain way, to force management to accept a buy-out.

This is rough tackle tactics. All those hoopla about N2.7 billion, N2.5 billion or N2 billion is because, basically, there was nothing to bring up. The best way for them was to say these guys are fat cats that must be wrestled down by all means.

PT: But, why was it so difficult for you to disclose your pay, if there was nothing to hide?

AMADI: Because we wanted to make a choice between responsible leadership and populism. I am a civil rights activist. When I go on the other side I can do that.

PT: Now that you have crossed over to this other side, can you talk about it now?

AMADI: Yes, if I am on that side fully. But, I can’t talk about what people earn. I sympathize with those making that call. It is lazy and unreasonable. In this country, we suffer from three things – lack of rigour and role occupant ethic as well as excessive populism.

If one is a clergyman, there are certain ethical behaviours that go with clergymen. If one is a rock star, there is also a role.

A regulator’s role is that of reasonability, responsibility and rationality. Why would anybody disclose his salary when it is already in the public domain? In NERC’s reports, two copies are sent to the National Assembly, including all those details. In all fairness, asking for such disclosures is being silly and comical. I am not for drama.

NERC is bound by the Freedom of Information, FOI, law. We said if a request is made through FOI, we’ll give to them. That’s the procedure. If anybody wants to know the salary of any public official, the person can go the website of the appropriate government agency and download it.

PT: Are you saying that Nigerians who keep asking to know the pay package of National Assembly members are also playing to the gallery?

AMADI: The issue is the process. If one really wants the information, one should write to the Clerk of the National Assembly requesting that. If the lawmaker is in a public hearing over an issue, he would most likely dismiss the request to disclose what he earns.

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  • share Idea

    One of my shinning lights in GEJ’s administration. Thanks for a job well-done.

    • GbemigaO

      Only God knows what is shining in your Eyes! This is a chap that could not ensure the meterisation of the country during his tenure except to come here and start celebrating increase in tariff without electricity !

      • joe

        A lot of Nigerians like this guy, are simply idi*ts!

  • Alpha

    Sam Amadi’s definition of corruption is quite ambiguous. Those who condone corruption can never be free of it.
    1. It was Sam Amadi’s tenure that saw the regulator agitating for those meant to be regulated, most times with the most absurd reasons;
    2. It was same period that pre-paid meters became the burden of consumers, like the grocery seller asking the buyer to come with his weight measure;
    3. Sam Amadi’s tenure heralded the discos refusal to bill consumers based on the reading of installed analogue meters, he even recently granted an interview supporting that fraud.

    I can continue counting why this man, hunting with the hunter and ravaging the farm with the animal all at the same time, is seen as a symbol of corruption in that sector.

  • Burning Spear

    The So-called $2.1b Arms Purchase Fund Is Scam By The Buhari Administration – Chief Dokpesi.

    **It is nothing but a hoax. “It does not exist. It’s a figment of the imagination of the present government to attack his enemies.

    The $2.1 billion arms purchase scandal currently being investigated by the security agencies is a scam , the chairman of DAAR Communications, Chief Raymond Dokpesi, has declared.

    Dokpesi is standing trial for allegedly collecting N2.1 billion of the cash from the erstwhile National Security Adviser (NSA), Sambo Dasuki. He is currently on bail.

    The DAAR Communications boss spoke at his Abuja residence during his investiture as Patron of the Peoples Democratic Party (PDP) Youth Vanguard on Wednesday.

    He said, “I must hasten to assure you that there is nothing like the much flaunted $2.1 billion arms gate. The competent courts of our land would sooner or later prove this coinage aimed at decimating the leadership and membership of our great party to be nothing but a hoax.

    “It (arms scandal) does not exist. It’s a figment of the imagination of the present government. It’s about the persecution of Sambo Dasuki, Tony Anenih, Olisa Metuh and others. We will be made proud when we start our defence in court.”

    In apparent reference to the Buhari-Idiagbon military regime of 1984/85, Dokpesi continued, “Some of us are reminded of the events of 1984/85 which by any stretch of comparison are similar to the unfolding events today.

    “As I have said not too long ago, we must stand resolutely united, especially in the face of this momentary political adversity. For one thing, I say again that the PDP is not dead, is not dying and will not die.”

    He described free press as one of the important elements that help to check the monstrous power of the state, adding that DAAR Communications has from inception been at the fore front of the fight against impunity and promotion of democracy even from the military days.

    “We have weathered the storm of oppression, we have been vilified many times, we have also been persecuted in our constitutional duties to make government and its officials accountable to the Nigeria people but we never wavered.

    “During the infamous third time tenure elongation agenda, we dared to speak up, but speak up we did. We have always been on the part of human rights, citizen participation in the democratic process, transparency and accountability.

    “These ideals have not changed and will never change. I assure you ladies and gentlemen, the youth and vitality of this nation, our faith in Nigeria remains unshakable.

    “We will support any policy of government that seeks to promote the ideals of good governance. But we should also not be cowed to speak up where we disagree,” Dokpesi added.

    He accused the ruling All Progressives Congress (APC) of attempting to impede the nation’s journey to political maturity through the manipulation of the federal system to serve purely partisan interests.

    According to him, the PDP was experiencing a massive persecution, political vendetta of the kind never before seen in the land and targeted at the leadership, membership and sympathizers of the opposition by the government of the day.

    • joe

      You read his prison note?

      • Burbank

        He can’t read.

  • Höly Wähala

    Sam Amadi is a corrupt and lying thief…
    I will tell Mazi Amadi one case of corruption involving him. After the 2015 elections which Buhari won, the president-elect took a short break to the UK flying 1st Class. In the same first-class sat Sam Amadi at a time electricity supply in Nigeria fell to under 3,000MWs for the first time in 16yrs. I lamented Mr. Amadi’s joy-ride for a vacation at a time he should have been home profering solution to the power crisis in a Sahara Reporters article that prompted heated debate because I also lampooned Buhari as being a pretentious hypocrite because he declined a Rolls ride provided by the Nigerian Embassy. Another evidence of Sam Amadi’s corruption is the over N2bn severance package he arranged for himself and others at NERC. So, do not believe any word from Sam Amadi… I will take “Mission Unaccomplished” as the title of thief Amadi’s yeye book. Oloshi ni Sam.

    • Ade

      That is not correct. Sam Amadi immediately issued a rebuttal, confirming that he was in Abuja all along and had not travelled, talk less of flying first class. He also confirmed that he had never flown first class as a public officia
      l.

      • Burbank

        Gbam..
        unfortunately, it’s second nature for some clowns tell lies.

        “In 2010 I banned flying of first class cabin in any airline. We are the only agency of government that obeys government circular that no person, from minister to the last person should fly first class.”

        “The N2.7 billion is to cover 164 NERC staff. It is lie from hell that we approved N400million and N380million for Chairman and Commissioners. We only resolved that all NERC staff and commissioners shall be paid severance at the rate of 100% of the gross earning as provided for in the schedule to the Pension Act. We pegged our severance to the provision of PENSION Act. nothing extra. So, where is the crime or corruption?”

        Sam Amadi, Premium Times, Nov 11, 2015.

  • REDEEM

    The question here is, who wrote that budget for president Buhari and convinced him to go and read it before the National Assembly and the whole world? Can we say president Buhari is truly in-charge of this nation if indeed the 2016 budget was written without his consent and input and given to him to just go and read? What is happening to our nation? Every foreign investor, business owner, stakeholders have the right to be afraid as things stand. Will it be right now to call our genuine concerns on the issue of budget as “wailing wailers”? As coined by Deri against the Apes in APC? Now that the truth is out suggesting president Buhari withdrew the budget back because he could not believe some of the contents he was told were in it at the Media Chat, are we still THE “Wailing Wailers” his 419ner Adesina spoke about?

    In a country where even Banks are now struggling to stay afloat, business owners are being forced to close shop, foreign investors are leaving the country, and our economy almost sliding into recession, we need a president who knows the economic issues of 9ja and not a president who does not even know the contents of the budget he read before the whole world.—What a shame! What a country!

    • Burbank

      wailing wailer

  • Truthometer

    Ok. Time would tell.

  • dele akin-johnson

    Thank you, Buhari!

    President Buhari
    may be slow and indecisive on policy matters but at least he’s cured the mad
    men and women in Lagos state who were singing all over the place that, “Oh,
    if only we can get someone like Raji Fashola
    ”. The devil those pedestrian
    Lagosians worship at heart answered their prayer. They have Fashola – who’d
    robbed them wickedly in Lagos much earlier. After Buhari pandered to the low
    intelligence quotient of these masochists in Lagos state, by appointing their
    beloved rogue – Raji Fashola – as the Minister of Power in charge of
    electricity, Lagos state has seen more darkness than light since October 1st
    1960. But those empty-headed Lagosians just walk face down nowadays,
    like morons who’d farted noisily in a crowded elevator. Fools die!

  • Omotolaaraujo

    He should slap his own face.

  • Robin Hood

    The ‘crazy electricity bill’ Amadi gave us, right before 2015 election campaigns, is still causing us nightmares till date. Whatever he and Jonathan’s administration used the money for, will soon be revealed in our current war against corruption. It’s just a matter of time Mr. Amadi.

  • favourtalk

    God will bless you and continue to be with you after the tenure and as PMB replaces you, we will have more better review of electricity and better electricity in the next few years

  • joe

    “..Today, we have licensed over 144 independent power producers capable of generating 32,000 megawatts, MW…” . So what’s the hold up?

  • Very Proud Oily IZON Redeemer

    The National chairman of Labour Party, Alhaji Abdulkadir Abdulsalam, in an interview with Vanguard
    What is your stance on the fight against corruption?
    Have you ever heard anywhere in the world, where a government subjects security into this kind of disgracing insult like what’s obtainable in Nigeria right now? I have never seen anything like it. Buhari has no, if he has, he has no advisers or he doesn’t listen to advice.
    What do you say about the evidence so far of the money paid through the office of the NSA, the Arms scandal?
    The paid money to the NSA man, also the NSA man said he gave Buhari car, so what are they telling us. And you know the man said if he opens up, he will open up canker worms. So leave that aspect of NSA because it is not good for our image, it is not good for our security; no nation ever subjects its security to this kind of thing. And it is not done with sincerity of purpose, it is for selfishness, you want to create something out of the man.
    But is that how security fund in other parts of the world is utilised?

    • Burbank

      Yes.
      Next?

    • Rommel

      Soon it will be revealed that your man also collected the now infamous blood money

  • Ayo Arowolo

    Buhari’s government fails most in terrible electricity supply of no more than two hours a day.

  • Kokoro Dudu

    Sam Amadi, you were a disgrace. Just keep quiet.

  • well

    where is the fix electricity charges going to…is that not corruption!