August 16, 2017

Power Ministry Saves FG from N119bn Judgement Liability

Power Ministry Saves FG from N119bn Judgement Liability

The Ministry of Power, Works and Housing has, through negotiations and compromise, saved the federal government a staggering sum of over N119 billion resulting from a judgement entered against it over litigation from a metering contract awarded by the previous administration in 2003.

The Minister of Power, Works and Housing, Babatunde Fashola, who disclosed this at a press briefing after Wednesday’sFederal Executive Council Meeting, said one of the three memoranda the Ministry took to the Council for approval was in respect of an inherited liability from the former Ministry of Power.

He explained that the judgement came “as a result of acts of officials of government who varied the Presidential approval without seeking further directives from him”.

According to Fashola, the officials of government varied the Presidential approval without seeking further directive from him and then awarded the contract on that basis adding that the party who was the beneficiary of that contract “which the officials subsequently sought to withdraw” went to court and got a judgment.

The Minister, who cited the incident as an example of some of the problems inherited from the last administration, added, “But we have successfully reached a compromise on that matter where the judgment has been compromised for the entire sum of N119 billion to N19,369,520. So, Government is no longer liable to, under this new agreement, to pay that amount”.

Pointing out that the negotiations took about the entire period of his tenure as Minister to achieve”, the Minister added that the successful negotiation was able to free up another N39.17 billion held under another Judgement in court to be used now for the supply of electricity metres to the DisCos adding that all of the disputes arose from a contract to supply 3,000,000 metres entered into with the contractor and NEPA, which became PHCN, in 2003; about 14 years ago.

“The contract was never fully performed by both parties; either by the contractor or government. So, from those very early days, they ended up in court. Government constituted one committee after the other to resolve the matter. So, there was court judgement, money was left in the bank, the purpose couldn’t be achieved. Then a new contract was created which became a liability of N119 billion”, he explained.

Fashola, however, expressed delight that the Federal Executive Council approved the Memo “to give effect to the negotiations that we were able to put together to compromise that judgement entirely and to convert the old N39 billion to a loan to that contractor, so that they can use it to supply metres to the DisCos” through new rules being developed by the Nigerian Electricity Regulatory Commission (NERC).

The Minister said one of the other two memoranda sent to Council by his Ministry was with respect for approval to construct the Pankshin-Balang-Yeleng-Sara-Gi Ndiri Road in Plateau State for N10.461 billion while the second one was with respect to Share- Pategi Road in Kwara State for N10.29 billion, adding that both prayers were approved by Council.

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