By Idris Akinbajo:
One balmy Tuesday, a little more than a year ago, on February 3, 2009, in Abuja, the former power minister, Rilwan Lanre Babalola, had just ended what appeared to be a bad meeting with officials of the new Nigeria Electricity Regulatory Commission (NERC).
The bone of contention was how to manage the N32 billion Multi Year Tariff Order (MYTO) subsidy that was released four weeks earlier for the half-year period of July to December 2008, and another N145 billion expected for 2009.
Established by the Electric Power Sector Reform Act of 2005, the NERC in June 2008, formulated the Multi Year Tariff Order (MYTO) which, among other things, was to determine the price to be paid by electricity consumers in the country. The federal government, which was also expected to subsidise the electricity payment, had agreed to cough out N177 billion over three years, beginning from July 2008.
These funds are trouble
NEXT’s ongoing investigations into the power sector have now revealed that the challenge of how and who should be central in the management of the N32.5 billion lies at the very heart of the controversial suspension, on February 18, 2009, and subsequent removal, of the NERC’s seven commissioners, including the chairman, Ransome Owan.
Two days before their controversial arrest of February 4, the NERC officials found themselves in multiple meetings, first with officials of the PHCN, orchestrated by Mr. Babalola, and later with Mr. Babalola himself on February 3, in his office.
According to sources close to the meeting, “The concern was on who should manage the funds and what role the minister should play in the whole framework.”
As part of its subsidy payment, the federal government, in January 2009, released the sum of N32.2 billion meant for July 2008 to December 2009. The money, which was to be handled by the NERC, caused disagreements between the NERC commissioners and Mr. Babalola, who was also a former employee of the NERC at inception. These disagreements, NEXT learnt, are the root cause of the problems being faced by the NERC commissioners.
As they arrived at their offices on February 4, a day after the meeting with Mr. Babalola, the NERC officials were told that they had some August visitors, who turned out to be operatives from the Economic and Financial Crimes Commission (EFCC).
In shock, “Our commissioners watch(ed) as the EFCC men combed through the offices of the seven commissioners and that of our chairman, Owan, before they were whisked off to detention,” said an NERC mid-level official last week in Abuja.
Guests of the EFCC
From this point on, it got bizarre. Even though the EFCC had not completed investigations, it wrote to Mr. Babalola on February 6, asking him to suspend the commissioners. Inside sources at the EFCC described it as “a total travesty”, as this was coming at a time when no offences had been levied against the NERC officials in writing. An operative simply summarised their offences to them.
On February 10, they were released from detention, and the very next day, Mr. Bablola appointed a mid-level assistant general manager, Immmudeen Talba, an administrator over his seniors on the deputy general manager’s rank. To complicate matters, the role of an administrator is unknown in the laws setting up the NERC.
By February 18, Mr. Babalola had secured a presidential order from Umaru Yar Adua, suspending the chairman and the commissioners of the NERC and consolidating the position of Mr. Talban as a sole administrator. He had, thus, created a totally new regime in the power sector.
Lanre Babalola’s controversial role
“When we resumed office, because we were the pioneer commissioners of the newly established commission, the commission had no staff of its own. We inherited a BPE (Bureau for Public Enterprises)-handpicked staff of 15, including one from the ministry of power, two from NEPA and Lanre,” one of the commissioners said.
NEXT findings indicate that Mr. Babalola had lobbied to be a commissioner of the NERC in 2005. When he could not be appointed as one, and after being seconded to the commission as head of market competition and rates, Mr. Babalola applied to be company secretary of the NERC.
“At his interview, it was determined that he lacked the experience,” a member of the panel that interviewed Mr. Babalola said.
Dissatisfied with his rejection, Mr. Babalola, who had earlier been introduced to President Yar’Adua’s former chief economic adviser, Tanimu Yakubu, by Hadiza, the latter’s wife, applied for a leave of absence; but after claiming all benefits.
Mr. Babalola was paid two years salary arrears, including allowances. This, NEXT learnt, was because of the intervention of Mr. Yakubu for whom Mr. Babalola then worked as an adviser.
The amount paid was based on figures approved by the NERC commissioners. The figures form part of the reason the commissioners are being prosecuted.
Mr. Babalola’s relationship with Mr. Yakubu may also have aided his appointment as minister of power in December 2008. Mr. Babalola did not respond to repeated calls made to him last week.
Money or Suspension
Mr. Babalola, while addressing reporters on February 18, 2009, over the suspension of the NERC commissioners, denied being behind the suspensions. He explained that the officials’ suspensions was based on an EFCC request.
“The ministry of power was informed of the invitation for questioning of the chairman and six other commissioners of Nigeria Electricity Regulatory Commission (NERC), for alleged financial misconduct, by the Economic and Financial Crimes Commission on February 4, 2009. Based on the preliminary findings, the EFCC recommended to the federal government, the suspension of the commissioners to allow it proceed with detailed and unfettered investigation of the matter. Following the recommendation of the EFCC, President Umaru Musa Yar’Adua approved the suspension of the seven commissioners of NERC pending the resolution of the matter”, he said.
Mr. Babalola, in his characteristic manner, as stated in NEXT’s earlier reports on the power issue in our country, was being economical with the truth.
Upon the release by the federal government of the N32.5 billion subsidy, there was controversy as to the sharing of the sum, with Mr. Babalola insisting that the money be handed over to the Power Holding Company of Nigeria (PHCN). Mr. Babalola, by virtue of his position as Minister, is the chairman of the PHCN. The NERC board insisted that by the EPSR Act of 2005, they were vested with the powers to distribute the money to all the beneficiaries, the power generating companies. These included the PHCN subsidiaries and the independent power producers.
This disagreement, NEXT gathered, led to a series of meetings, including a meeting between the NERC board and the PHCN management on Monday, November 2, 2009, and another meeting between the NERC board and Mr. Babalola on Tuesday, February 3, 2009. The meetings were not conclusive, with no agreement reached.
However, a day after the inconclusive meeting with Mr. Babalola, the EFCC arrested the NERC commissioners. The NERC commissioners were released on bail by the EFCC on Tuesday, February 10, 2010, with one of them released earlier on health grounds.
It was also on the day the commissioners were released that Mr. Babalola wrote Mr. Yar’Adua, asking that Imamuddeen Talba, the then secretary of the NERC, be appointed its administrator.
“In the meantime, your Excellency may wish to note that a management vacuum has been created at the NERC due to the absence of all the commissioners. Pending the resolution of the problem on hand, I wish to recommend that Mr. Imamudeen A. Talba, secretary to the commission, be appointed in the capacity of administrator in charge of the affairs of the commission,” Mr. Babalola stated in his letter to Mr. Yar’Adua.
In other words, the NERC commissioners, who had only been accused of a crime and had not been suspended or removed from office, were by Mr. Babalola’s recommendation to be replaced.
Mr. Babalola could, however, not wait for the president’s response.
The NERC commissioners, who resumed work on Wednesday, February 11, were on Thursday February 12, chased out of their offices by armed mobile policemen, allegedly on the orders of Mr. Babalola.
A week later, on Tuesday February 17, David Edevbie, Mr. Yar’Adua’s principal secretary, sent a letter to Mr. Babalola stating the president’s approval of the commissioners’ suspension and the approval of Mr. Talba as administrator, a post the latter still holds, a year after.
Mr. Babalola’s actions on the removal of the commissioners and the EFCC’s recommendation to Mr. Yar’Adua, were all based on a petition by one Muhammed Abimbola Iloeje, a supposed staff of the NERC.
“Nobody has seen the petition the EFCC claimed it acted upon to investigate my clients. They even refused to attach it to their proof of evidence. We believe the petition, like the petitioner, does not exist. The EFCC may have lied by claiming that it acted based on an invisible petition,” stated Tunji Abayomi, a lawyer to Abimbola Odubiyi and Grace Eyoma, two of the commissioners.
Further enquiries by NEXT show that there is nobody by the name of Mohammed Abimbola Iloeje, not even as a staff of the NERC.
However, the EFCC, in its letter to Mr. Yar’Adua, said its investigation was based on the man’s petition.
“On 2nd of June 2008, one Mohammed Abimbola Iloeje on behalf of some concerned staff of NERC, petitioned the EFCC over the financial misconduct of the chairman and commissioners of the Nigeria Electricity Regulatory Commission,” Farida Waziri, the EFCC chairperson, stated in the letter to the then vice president, Goodluck Jonathan.
Femi Babafemi, the EFCC’s head of media and publicity, declined commenting on our enquiries; but NEXT findings show that the commission neither met nor interviewed the petitioner.
“What EFCC did in its ruthless pursuit was to take Mohammed from the names of the fifth Defendant (Muhammed Bunu), Abimbola from the sixth defendant (Abimbola Odubiyi), and Iloeje from the third defendant (Onwuamandze Iloeje), to create a human being in its image, who purportedly wrote a petition,” Mr. Abayomi stated in his court application.
Where they stand
As it is, Lanre Babalola, the controversial power minister has, alongside other ministers, been removed by Acting President Goodluck Jonathan, but the case between the EFCC and the NERC commissioners is still ongoing. The charges against them have been amended four times, from 197 to 231 to 229 and then to 85.
The 85-count charges they are now facing, according to Kelechi Egbufor, a lawyer, can be summarised into five: 57 on estacodes, seven on criminal conspiracy, nine on criminal breach of trust, 11 on criminal conspiracy, and one on cheating.
The case was last heard at the Abuja High Court on Friday last week, and has been adjourned to April 27.
Mr. Talba, the administrator, still holds sway at the helm of the NERC, where he has presided over the distribution of the accrued part of the federal government subsidy. Over N75 billion has so far been released by the federal government and distributed by the NERC.
When NEXT tried to get word from the NERC on the current status of the subsidy, we were directed to “speak with the ministry; it is the ministry that does the actual disbursement (and) because they are the ones that do the disbursement, it is better the information comes from them.”
Patrick Ayendi, the head of media and publicity, declined to respond to NEXT enquiries, but a senior official of the commission, who helped send our enquires to the administrator, said “It is better you ask the person who does the disbursement.”
As at September last year, peak generation supplied by PHCN was 2,443 MW for a population of 155 million people. In comparison, South Africa has 40,000 MW for a population of 50 million people; Brazil has 100,000 MW for a population of 192 million people, while the US has 700,000 MW for a population of 308 million people.
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