The grand looting of power sector funds under Obasanjo – Femi Okurounmu


March 26, 2008


The grand looting of power sector funds under Obasanjo

Though we have always known that the political class is corrupt, the revelations that have been coming out of the Hon. Elumelu Committee on Power and Steel in the last two weeks have confounded and astounded Nigerians as they show that former President Obasanjo took the country to new depths of corruption and depravity, surpassing all records of corruption set by Babangida and Abacha and now making these utterly discredited leaders look like saints and angels. But first, we must commend President Umaru Yar’Adua for having the courage to squeal on his predecessor’s scams in the power sector, alleging that he squandered over $10 billion on the sector with nothing to show for the funds. It was this revelation that prompted the Speaker of the House of Representatives to look into the matter and inform the nation that the amount actually syphoned off the treasury under the pretext of improving the power sector was really $16 billion.

We must also thank the young, vibrant and patriotic members of the House of Representatives for initiating and sustaining their present public hearings into the sector in spite of threats and intimidations from culprits. From the revelations emanating from the hearings, we now know that Obasanjo set up an illegal agency, the National Integrated Power Projects NIPP, and made it to award various spurious contracts through a pliable committee headed by Senator Liyel Imoke, his Minister of Power and Steel, which was responsible to him, and him alone. The committee, in its operations, was empowered to breach all regulations governing national procurement and award of contracts, and awarded contracts to designated contractors without any bidding process and without going through any due process assessments before payments were made. Not only that, the companies prepared the terms of their own contract agreements and simply gave them to the government to sign. As many as 34 of the companies to which these contracts were awarded were not even registered with the Corporate Affairs Commission, as revealed by the agency. To fund the contracts, Obasanjo drew illegally from the excess crude account of the federation to the tune of over US $3.5 billion.

The contracts followed a general pattern. Multi-billion naira contracts would be awarded to companies, most of the money would be paid upfront, with very little or no execution carried out, and with no efforts made to monitor and enforce execution. For example, Rockson Engineering Co, a company owned by Senator Aniette Okon, a party stalwart, was awarded N88b contracts, paid over 90 percent of the contract sum, while it performed less than 10 percent of the contract. Two Chinese companies were awarded contracts in excess of N116 billion, fully paid, and yet performed less than 10 percent of the works. A German consultancy firm Lahmeyer International, which had been blacklisted by the World Bank for fraudulent activities, still found favour with Obasanjo and was paid N369m for a feasibility study on the Mambilla Hydro Electric project. It never even bothered to visit the site. In the same manner, a South African company, Pivot, collected over N1 billion for the construction of a double circuit transmission line in Enugu Haven, but never mobilised to the site. Even Obasanjo’s predecessor in office, Gen. Abdulsalami Abubakar, could not resist the lure of Obasanjo’s energy contracts bonanza. His company, ENEGO won a N19.7 billion contract, was paid N13.2b and has not delivered any performance.

The comments of Imoke and Agagu when they appeared before the House Committee are very instructive. Rather than address themselves to the issue of funds mismanagement, their concern was that the $16 billion allegedly squandered on the NIPP projects was a pittance which to Agagu, was no big deal, drawing attention to what South Africa budgets for electricity. One wonders if he was justifying the squandering of the $16b because it was not enough to meet the country’s energy needs. The two former energy ministers also drew attention to the oversight in planning the schemes in not providing for gas supplies to the plants even after they are completed, making one wonder about the intellectual quality of the men who preside over the nation’s affairs. Surely, those comments on failure to anticipate the source of gas for the plants are the type that make the Watsons of this world conclude, falsely, that black people are less intelligent than other races.

The boldness with which contractors abandoned their projects after collecting close to 80 percent of the contract sums under the NIPP programme would suggest that whatever money they collected was shared with the contract awarding officials. Since Obasanjo was the sole approving authority for these contracts, the investigative work of the House Committee on Power and Steel will not be done until it has summoned Obasanjo himself to appear before it. The revelations from the public hearings on the $16b spent on the power sector between 1999 and 2007 are illustrative of the ways public funds were squandered and diverted to private hands by the Obasanjo regime. No regime has been more blessed with revenue inflows, yet the huge resources that accrued to it have brought no positive change to the peoples’ lives. Similar revelations would come out, were the relevant committees to carry out public hearings on the expenditures allegedly spent in the same period on water supply, road construction, poverty alleviation, etc. Looting of budgeted funds for various projects was the norm under the Obasanjo regime, and that is why calls for a comprehensive probe of the regime cannot continue to be ignored.

With Obasanjo’s mishandling of the power sector, it is no wonder the nation has been thrown into a state of almost total power blackout. I chuckled when last week, the PHCN gave notice that there would be two days of national blackout, because to Nigerians, that is nothing unusual and hence, no news. It is a condition to which they have become accustomed. What would have been news is a notice that there would be two days of uninterrupted power supply. Our leaders are unique in their shamelessness, for otherwise, Obasanjo would feel serious embarrassment each time he spends the night at his newly completed palatial, hill top mansion in Abeokuta, for he would not fail to notice that most nights, the whole town is in pitch darkness, while his mansion stands out, bathed in resplendent illumination, like an emperor’s outpost overlooking a conquered dark age settlement. But perhaps that enhances his own sense of importance!

Now, back to the $16 billion power sector public hearings. What can the nation expect after all the noise, the outrage and indignation expressed at the revelations? Will everything just die down and the nation settle down to business as usual, or will the culprits be brought to book? Unfortunately, the House of Representatives can only make recommendations. The implementation of any recommendations rests on the executive. Will the executive, through the Attorney General, take any action? My prediction is that it will not. It will not, because Obasanjo, the major culprit, is still a powerful figure in the ruling party and continues to influence, if not direct the affairs of the party. Besides, he made Yar’Adua president. So, Nigerians can scream as much as they can, nothing much is going to happen in the form of punishment or deterrent.

Nigeria is now at a point where corruption has become the norm. Each corrupt regime ensures it installs its successors in office who will not uncover its sleazy deeds. Stopping corruption has become a near-impossible task because those that should be most outraged about it are already compromised by spreading its gains to them – the bishops, pastors, imams, traditional rulers and ordinary citizens, including media practitioners. So, how do we get out of the mess? It would take a miracle. Fortunately, most Nigerians believe in miracles.


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