House of Reps investigates NBET over corruption allegations

Members of the House of Reps

The House of Representatives has mandated two of its committees to investigate the Nigerian Bulk Electricity Trading Plc (NBET) and its Managing Director, Marilyn Amobi, over several corruption allegations.

The resolution followed a motion by Mohammed Sabo on Tuesday.

Mr Sabo said the management of NBET was alleged to have violated the public procurement act costing the federal government over N90 billion.

He noted that these losses were incurred as a result of total disregard for the act by the Managing Director and Management of NBET in the execution of Power Purchase Agreements and other dealings with consultants.

“Two of many examples is the engagement of Messrs AELEX (Law Firm) and Azinge & Azinge (Law Firm) despite the fact that the lacked basic bidding documents, the least responsive bidder being was not awarded the contract and the required authorisation from the Attorney General of the Federation was not obtained prior to the engagement of these Law Firms.

“The House or Reps further notes that most contractors and vendors engaged by NBET are not registered with the Bureau of Public Procurement, neither are they registered on the National Database of Federal Contractors, Consultants and Service Providers which is a gross violation of the provisions of the Act;

“The House of Reps observes that the Managing Director and Management of NBET and the Management NBET have been accused of awarding contracts arbitrarily and not to the lowest evaluated responsive bid as required by Section 16(17) of the Public Procurement Act 2007 resulting in losses worth billions of Naira.”

Mr Sabo warned that if the allegations were not properly investigated, it would create ‘an institutional system of manipulation of the procurement’ leading to financial losses to the federal government.

In a unanimous decision, the House referred the issue to its Committees on Public Procurement and Power to jointly investigate and report back in two weeks.

Allegations

Allegations of infractions against Mrs Amobi and the management team of NBET was published by Leaks NG, a coalition of Nigerian newsrooms and civil society groups in February.

First of the allegations was that Mrs Amobi authorised overpayment to two power generating companies – Omotosho Electric Genco and Olorunsogo Electric Company.

This act was a flagrant violation of the details of a Power Purchase Agreement (PPA) the companies signed with the government in February and August 2016, respectively.

The PPA is an agreement between NBET and power generating plants for the sale and purchase of energy generated by the plants.

According to the PPA, to qualify for full payment, generating plants must provide evidence that they have active GSA and GTA or else the power purchase agreement would be deemed inactive and would only receive payment for the power they supplied.

“Seller (Omotosho Genco) hereby agrees that any claim for Available Capacity payment under the PPA are conditional on the seller providing evidence acceptable to the Buyer (NBET) confirming that it has a legally binding and enforceable Gas Supply and Aggregation Agreement and Gas Transportation Agreement, in accordance with clause 3.2.2 and 4.2.1 of the PPA,” the agreement obtained by Leaks NG stated.

However, even though Omotosho did not provide evidence of gas supply aggregation and transportation, the company continued to tender request for full payment for 20 months.

According to the documents Leaks NG relied on, the over-invoicing was detected in October 2017 following an NBET internal audit.

Other infractions alleged to have been orchestrated by Mrs Amobi include illegal payment to two law firms; illegal payment to a consultant of the Power Holding Company of Nigeria (now unbundled) and illegal transfer of staff without board approval.

NERC’s reaction

The Nigerian Electricity Regulatory Commission (NERC) in its reaction defended NBET specifically on the allegation that the company overpaid two power generating companies.

NERC, an independent regulatory body with authority for the regulation of the electric power industry in Nigeria said all payments to Omotosho Electric Genco and Olorunsogo Electric Company were legal and appropriate.

The reaction is contained in a statement published on its website late February after an investigation which involved interviewing parties.

“The findings of the Commission’s investigation are as follows –

“All payments made by NBET to the two power plants were by the terms of the PPAs.

“NBET and the two power plants executed appropriate waivers by the terms of the PPAs to address Condition Precedents.

“Payments made by NBET to the two power plants were done in compliance with the NERC TEM Order under the provision that sanctity of existing agreements is maintained.”

NERC said it conducted its investigation based on petitions by two top management staff of NBET: Waziri Bintube and Abdullahi Sambo, both of who were General Manager/Chief Financial Officer and Head of Internal Audit respectively as at the time of Mrs Amobi’s employment in 2016.

NERC asked the public to discountenance the allegations.

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