Diversion of $500m Euro Bond: Senate Summons Adeosun, Amaechi, DMO DG

kemi Adeosun

kemi Adeosun

The Senate has asked the Minister of Finance, Mrs Kemi Adeosun to appear before it to explain the rationale for diverting the federal government loan obtained for reviving the power sector to remodel four airports across the country.

Summoning the Minister, the Senate explained that $600 million dollars Euro bond from the Chinese government for the rehabilitation of the power sector, out of which $100 million dollars was used as counterpart funding for the remodeling of Lagos, Abuja, Kano and Port Harcourt Airports was not used for the original purpose it was intended..

Also to appear before the Senator Matthew Urhoghide led Committee on Public Accounts and Power, Steel Development and Metallurgy are the Minister of Transportation, Rotimi Amaechi and the Director- General, Debt Management Office, DMO, Mrs Patience Oniha.

Speaking in Abuja when the Permanent Secretary, Ministry of Transportation, Sabiu Zakari appeared before the Committee, Senator Urhoghide asked that the ministers appear before his Committee next Thursday to explain the reason for the diversion of the fund  from its original purpose to something else.

The Senate insisted that there was the need to establish the desirability of the loan, just as it said that when the loan was being sourced by the Federal Government, it was very clear what it was meant for and not as counterpart funding to finance Chinese loan for the Airports.

According to Urhoghide “ we need to establish the desirability of the loan, it was for power sector, to develop the sector, it was for the Nigerian Electricity Bulk Trading Company, NBET, Transmission Company of Nigeria, TCN, among others. Aviation was not in the picture, Nigerian National Petroleum Corporation, NNPC was used as secure the loan. Aviation did not apply for it, not in the list of agencies to benefit. There was no Presidential approval; Aviation was not listed as a beneficiary. ”

The Senate said that it would want to know whether there was a formal letter from the Ministry of Aviation to the Finance Ministry to finance the counterpart funding as well as to assess the $500 million dollars, just as it said that it would want to know whether the process got the blessings of the National Assembly. The Senate also wanted the Ministry to furnish it with vital information and update on the project, how much has been spent on the project, if it was signed in dollars or local currency or both, among others.

Also to appear before the committee are the Managing Director/Chief Executive Officer of the Nigerian Sovereign Investment Authority (NSIA), Uche Orji, and the Chief Executive Officer of the Nigerian Electricity Bulk Trading Company, NBET, Dr. Marylyn Amobi who are expected to provide evidence, bank statements and all other relevant documents to prove that the $350 million fund was safe. Orji had told the Senate Committee that the fund increased by $34 million, and that $397.5 million was initially realized; while deduction of $13.5 million to service the interest on the amount, reduced the funds to $384 million.

He said, “The NBET funds are intact with the NSIA. As of our September statement, it has grown from $350 million to $397.5 million. $13.5 million was recalled by NBET to service the interest. So what we have at the moment is $384 million. So the funds are with us and they are safe.”