Nigerians Lament Increased Electricity Tariff
While Nigerians lament increased electricity tariff, regulatory agency’s officials share billions as perks
Since its establishment, the electricity regulator, NERC, has been mired in financial scandals.
By Mojeed Alabi
At a time many Nigerians are grumbling about the increase in electricity tariff, commissioners and members of the board of the Nigerian Electricity Regulatory Commission (NERC), have illegally paid themselves billions as salaries, severance entitlements and to purchase exotic cars, which were allegedly registered in their names, PREMIUM TIMES has learnt.The decisions of the commissioners are in clear violations of the extant regulations such as the Procurement Act 2007 and the Electric Power Sector Reform Act 2005.
PREMIUM TIMES is in possession of a petition sent to the Economic and Financial Crimes Commission by a concerned individual, who did not want to be named, with details of the illegal jumbo payments.
James Momoh, the immediate past chairperson of the commission, confirmed that the payments were indeed made, adding that the decision was jointly taken by the board.
NERC was established in October 2005 after the enactment of the Electric Power Sector Reform Act 2005. The commission’s mandate includes licensing, determining operating codes and standards, establishing customer rights and obligations and setting cost reflective of industry tariffs.
The agency, by law, is funded through 1.5 per cent of charges paid to the distribution companies by electricity customers.
But since its establishment, the agency has been mired in financial scandals.
Its first board, led by Ransome Owan, was dissolved in 2008 over an allegation of corruption. An administrator was appointed to head the commission until 2010 before a new board led by Sam Amadi was constituted.
However, the Mr Amadi-led board was also accused of illegally allocating huge sums as severance packages for the board members, among other allegations. The allegations were denied by Mr Amadi.
Exotic cars
According to the petitioner, the seven commissioners of NERC recently paid N75 million each to themselves amounting to a total sum of N525 million for the purchase of exotic cars. The cars were also registered in their names.
Earlier in 2018, the board, through its supervising ministry, submitted a memo to President Muhammadu Buhari through the Federal Executive Council (FEC) to seek approval for the purchase of sport utility vehicles (Toyota Land Cruiser) for its seven commissioners to the tune of N450 million.
Irked by what was described as an insensitive request, the FEC reportedly rejected the request and advised the agency to patronise Innoson Vehicle Manufacturing Company Limited, a local vehicle manufacturing company that is based in Anambra State.
Dissatisfied with the president’s decision, the board reportedly circumvented the directive by paying each of the commissioners N75 million.
According to the petitioner and other sources, the money was then used by the commissioners to import sport utility vehicles from the United Arab Emirates (UAE), while other sedan vehicles were purchased from other unidentified sources.
The petition reads in part; “From these monies, six exotic and expensive jeeps were bought from Dubai, United Arab Emirates and seven utility vehicles from various sources with each commissioner having one SUV jeep and another sedan vehicle, while the chairman only bought a sedan, having inherited upon resumption, a newly acquired SUV as his operational vehicle.
“All procured vehicles were bought and registered in the names of these commissioners despite the fact that they had, from inception, allocated to themselves, the best of the commission’s SUV and other cars as operational vehicles, fully maintained by the commission, inclusive of attached drivers by the commission for close to 42 months.”
The petitioner added that the vehicles were bought less than 16 months to the end of the tenure of the commissioners and that the process did not follow the Public Procurement Act.
“The intent of this fraudulent and brazen act of the seven commissioners is to go with these highly-priced vehicles upon the expiration of their tenure in 16 months’ time,” the petition further noted.
According to Section 19 (a) of the Procurement Act 2007 “Subject to regulations as may from time to time be made by the public procurement bureau, under the direction of Council, a procuring entity shall, in implementing its procurement plans: (a) advertise and solicit for bids in adherence to this Act and guidelines as may be issued by the Bureau from time to time.”
Severance package
In a manner similar to its predecessor, the current board of the agency has also allegedly approved the payment of huge sums to the commissioners as severance packages even while its tenure is far from ending.
According to the petition, the illegal increase in the salaries of the commissioner amounting to about 200 per cent of the approved scale by the National Salaries, Incomes and Wages Commission, has further increased what each of the commissioners budgeted for themselves as severance package.
“The current remuneration of the commissioners of NERC is also against the directives of the house committee on power as shown in the attached report. The commissioners also approved and paid themselves a humongous sum as Covid-19 palliative and special duties allowance with total disregards to the same section of the Act,” the petitioner wrote.
According to the report referred to by the petitioner, the chairperson of the NERC board currently earns an annual income of N83.4 million as against N59.9 million approved by the wages commission.
Arbitrary salary increase/ Appointment of aides
The commissioners also jerked up their salaries and emoluments in total disregard for Section 42, Subsection 1 (a) of the Electric Power Sector Reform Act 2005. The act recommends that payments of salaries and emoluments to the commissioners and staff of the agency must be approved by the National Salaries, Incomes and Wages Commission.
According to the petition, the commissioners allocated more than N320 million as severance packages to each of themselves. Their aides and those of their predecessors, who were said to have been appointed illegally, were also beneficiaries of the severance largesse.
In violation of the federal government’s circular referenced B63833/73 of January 7, 2000, which pegs political appointees capable of appointing special and personal assistants to ministers and special advisers to the President, the board is said to have consistently approved the appointment of personal assistants and special advisers to all the commissioners.
The aides, who are appointed from outside the commission, are reportedly indiscriminately placed on various ranks with “remuneration well above N13 million per annum.”
Meanwhile, a 2013 audit report from the office of the Auditor General of the Federation on the agency, frowned on such appointments, and demanded retrieval of all the financial benefits enjoyed by such appointees from their principals.
However, rather than heeding the caution of the auditor general, the incumbent board of the commission allegedly went on to pay severance packages of up to N12 million to each of the former aides to the ex-commissioners.
The auditor general’s report, which is contained in a memo dated April 30, 2013 and referenced DCS/MUC.189/CORP/5, listed nine “illegal” aides appointed by the then commissioners to include Bubara Dakolo, Sam Okoro, Falua Ayoka, Maude Buba, Ogbu Dennis, among others.
The memo reads in part; “These appointments, however, contravenes the provision of Circular Ref. No. B.63833/73 dated January 7, 2000, which implied that only Hon. Ministers and Special Advisers to Mr. President are entitled to and can appoint one SA and one PA each from outside the service. Therefore, the appointment of SA and PA by political office holders such as chairman and commissioners of the commission who are not in the category identified in the circular was wrong and improper.
“More so, the various sums paid to these assistants in the form of salaries, allowances, DTA, estacode, etc, are viewed as illegal disbursement of public funds since their appointment clearly violates the provision of extant circular.”
The memo, therefore, recommended official disengagement of the assistants, and that “amounts so far paid to each of these assistants in form of salaries, allowances, duty tour allowances and estacodes allowances, etc, should be ascertained and recovered from each of the commissioners who enjoyed their services and evidence of recovery should be forwarded to my office for confirmation.”
PREMIUM TIMES cannot ascertain whether the refunds were made, but further findings revealed that the circular referenced by the auditor general has not been vacated by the government.
Budgeting N2bn for office partitioning
In its 2021 budget proposal, the agency allocated N2 billion for the partitioning and furnishing of its eight-storey headquarters’ building.
This angered the House of Representatives’ committee on power, especially following the failure of the then chairperson of the commission, Mr Momoh, to give details of the budgetary allocation.
The lawmakers threatened to delete the allocation from the agency’s proposal if they could not be provided with contract sum and other details.
But in less than 24 hours after the lawmakers’ decision, the agency, on November 5, posted a statement on its website, denying what was contained in its budget proposal submitted to lawmakers.
The statement, which was simply credited to the management of the agency, stated that; “The Commission further clarifies that no contracts in the sum of NGN2bn (Two Billion Naira) have been awarded to any person or company for the purpose of renovating and/or furnishing of the head office complex in Abuja. The ONLY capital project included in the 2021 budgetary appropriation is a request for the provision of a sum of NGN294,064,276 for the partitioning and furnishing of the head office complex in Abuja. This project is being implemented in phases in alignment with the projected cash flows of the Commission and in accordance with the approval granted by the Federal Executive Council at its meeting of July 11, 2018.”
I’m ready for handcuffs – Ex-chair
Speaking on the phone with our reporter, the immediate past chairperson of the commission, Mr Momoh, confirmed that the EFCC had earlier raised similar queries with the commission and that responses were already submitted to the anti-graft body.
He, however, declined further comments on the matter, saying he had already stepped down and that his successor and former deputy, Sanusi Garba, was in the best position to answer PREMIUM TIMES’ questions.
“I appreciate that you are asking me these questions. Maybe I will refer you to talk to the new chair of NERC. I stepped down last week. So I can no longer be answering official questions. You can call the new chairman, Sanusi Garba,” he said.
Mr Momoh, however, noted that similar questions were asked by the EFCC and answers “were given when I was there.”
“It will not be proper for me to speak on behalf of the commission now because I have handed over everything in my possession to my successor. So Sanusi should be able to answer you. More so, the decisions of the commission were not reached by one person. They are collective decisions and if there is any allegation, it is the six or seven plus one that must take responsibility. I’m ready whenever you are set to handcuff us. So I have not run out of the country yet,” Mr Momoh added.
Meanwhile, Mr Momoh also expressed regret that he could not complete his five-year term of office having attained the 70-year-age which the Act recommends as the age limit for any official of the agency.
PREMIUM TIMES had exclusively reported Mr Momoh’s appeal to President Muhammadu Buhari to be granted an exception to continue his term in office. But the president instead nominated Mr Garba, an engineer from Katsina, to take over as the chairperson.
“Even though my appointment was for five years, it is the prerogative of Mr. President to allow me to continue as chair. That was not done, so a new chair is in place. He is Sanusi Garba. My appointment was terminated based on age since they said the Act says so. But the Act also forgets to state that when you are given an appointment for a five-year term, you are meant to serve out your term. But unfortunately, they didn’t follow my appointment letter,” he told our reporter on the phone.
Incumbent chairperson keeps mum
When contacted, the new NERC chairperson neither picked calls to his two telephone lines nor responded to both text and WhatsApp messages sent to him.But the agency’s spokesperson, Michael Faloseyi, said though he does not attend the board meeting of the commission, he could confirm that the allegations are spurious.
Speaking on the phone with our reporter, Mr Faloseyi said; “The commission is a credible organisation; we don’t engage in anything without following due processes. And as far as I’m concerned, all the issues raised are considered rather spurious. There is no truth in all the issues raised. But you must know that I don’t attend board meetings. However, the commission has been transparent enough to communicate most of its decisions appropriately. So most of the issues being raised are considered non-existent and spurious. They are a figment of some people’s imagination.”
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