The Nigeria Bulk Electricity Trading Company (NBET) has alleged that a petition from the Transmission Company of Nigeria (TCN) stopped it from recovering about $69.4 million debt that two foreign companies operating from Benin Republic owed it.
NBET, which is responsible for power sales, is supervised directly supervised by the Federal Ministry of Finance.
The agency’s explanation is contained in the management’s response to the audit query from the Office of the Auditor General for the Federation (OAuGF) on Non-compliance/Internal Control Weaknesses in Ministries, Departments and Agencies (MDAs) of the Federal Government of Nigeria for the year ended December 31, 2020.
The audit report, which was signed by the Auditor General, Shaakaa Kanyitor Chira, was submitted to the Clerk to the National Assembly on December 20, 2023 in accordance with Section 85(2) and (4) of the Constitution of the Federal Republic of Nigeria, 1999 (as amended).
The NBET management said: “In June 2017, NBET and the Transmission Company of Nigeria (TCN) NIGELEC, through a joint letter, advised the NIGELEC and CEB, respectively, that they should continue to credit the account of TCN Market Operator pending the signing of the agreements that would put in place a new contractual /commercial framework with NBET.
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“NBET proceeded to negotiate a new contractual/commercial framework with CEB and NIGERLEC, respectively, but faced challenges from both TCN and the international customers in finalising the new Power Sale Agreements that would pave the way to fully assume the administration of these contractual relationships.
“While the government has directed NBET to conclude the international contractual engagements, TCN, however, wrote to the Federal Ministry of Power asserting that NBET has no role in the ECOWAS regional electricity market and cannot be executing contracts with CEB and NIGELEC.
“The letter further stated that TCN has the responsibility to recover all outstanding debts and noted that they had reconciled the outstanding debt and were discussing a payment plan for offsetting the debt.
“Thus, it is the TCN that are in the best position to render account for the outstanding payment. NBET is taking necessary steps for the recovery of its portion of the payments that have been credited to TCN.”
In its audit query to the government-owned company, the Office of the Auditor General for the Federation alleged that NBET failed to recover about US$69,384,699.20, which amounted to N25.187 billion (at the rate of N363 to a dollar as of January 31, 2019).
Explaining the loan, the OAuGF said: “Audit observed that N321.724 million was paid to a former Managing Director of the company and seven other officers as staff mortgage scheme/revolving loans for the acquisition of properties while they were in active service.
“Of the above amount, a former Managing Director received N85,283,867.36 in January 2018, while the balance of N236,440,927.81 was paid to the seven officers in July 2016.
“At the time of disengagement from the service in July 2020, the former Managing Director had only repaid N35,707,541.90, leaving an unpaid balance of N49,576,325.48, while the sum of N97,657,416.14 was recovered from the seven former officers of the company, leaving an unpaid balance of N138,783,511.67.
“In all, the sum of N188,359,837.15 remained outstanding at the time of audit in October 2020, and all the officers in question were disengaged from service in 2018 without paying the outstanding loan of N188,359,837.15.”
But the management failed to offer an explanation to the audit query, leading to a recommendation that the managing director be made to justify why the officers were disengaged without paying the outstanding loan of N188,359,837.15.