Contractors May Refund Government's Money with Interest

Contractors who handled the controversial power plants initiated by the former President Olusegun Obasanjo's but failed to perform satisfactorily may be forced to refund the money and pay interest on them.

This is among punitive measures the House of Representatives Committee on Power and Steel probing the alleged $16 billion spent on the energy sector between 1999 and 2007 may recommend to the Federal Government.

Aside the representatives' probe, the Federal Government has intensified its efforts to bail out the energy sector from its near moribund state.

Its current focus is on the controversial National Integrated Power Projects (NIPP), where a global firm hired by the government to assess seven of the power plants and recommend ways to make functional has submitted its report.

After inspecting the Papalanto Power Plant in Ogun State yesterday, the panel's chairman, Mr. Godwin Ndudi Elumelu, said the contractors who performed poorly would be made to refund the money and pay interest on them.

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After many problems, much payment, and little results, the power sector of Nigeria did not do very well last year. Hopefully, the contracters will follow through and refund money, which might mitigate some of the damage and lack of progress in the power sector.

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How Obasanjo Spent $13bn on Power

Clearer picture of how the Obasanjo administration spent $13 billion on the power sector emerged yesterday with the Minister of State for Energy (Power), Mrs. Fatima Ibrahim, giving a breakdown of the expenditure over a period of eight years.

And following the failure of the National Integrated Power Project (NIPP) to materialise, the 36 states and the 774 councils are now demanding the refund of the $3.2 billion they contributed for its implementation, according to Governor Gabriel Suswam of Benue State.

She said the sum of N235 billion; $6.5 billion and 330 million Euro were used to finance the National Integrated Power Projects (NIPP).

She said another $4.6 billion sourced from the international creditors and $1.6 billion from Joint Venture Calls (JVCs) were also used to finance the sector during the period.

Ibrahim said although there was no evidence of misappropriation of the funds, some contracts that were paid for were abandoned by the contractors after payment.

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Following up on this story, the government has finally responded to the question of the people and the questions of the state government. The money was reportedly all allocated to certain projects, but that does not rule out the possibility of massive corruption or faulty allocation. The government's explanation was that many contrators who were hired for the job did not complete their tasks. This money that was not returned upon will be sought out from the contractors, and hopefully the government can come closer to their ambitious power supply goals.

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$10b was spent on power sector over 7 years with no results

"The Action Congress (AC) has said the shocking revelation by President Umaru Yar’Adua, that the Obasanjo Administration spent $10b on the power sector in 7 years without a commensurate result, has further justified the growing calls for the probe of the Obasanjo government.

AC wondered what the Obasanjo Administration did with $10 billion, an amount that represents about half of this year’s federal budget, when his government left the power sector worse than it met it in 1999.

Former President Yar'Adua

Meanwhile, the AC has said the target of 6,000mw of electricity generation for 2009, set by Yar‘Adua, has shown that his Administration does not appreciate the depth of the crisis in the sector and the urgency it deserves.

'We are aware that industrial analysts have said Nigeria needs to generate as much as 40,000mw of electricity to ensure an uninterrupted supply of electricity to its numerous people.'"

-My Naija News, a local Nigerian news company.

The fact that the same administration that pledged to reduce corruption also spent half of a years of the country's budget with no apperent result and likely used it to their own benefit is very disheartening. Any respect that Nigeria's anti-corruption agency had is now likely on shaky grounds.