…Says Ministry saves Fed govt. N119bn court liability
09 August 2017, Sweetcrude, Abuja – The Federal Government has approved the sum of N39.17 billion for the supply of electricity meters to the Electricity Generation Companies, also known as Gencos, across the country.
Minister of Power, Works and Housing, Mr. Babatunde Fashola, who disclosed this to correspondents in Abuja, also noted that the Ministry of Power, Works and Housing has, through negotiations and compromise, saved the Federal Government a staggering sum of N119,369,520,000 court liability resulting from a judgement entered against it over a litigation from a metering contract awarded by the previous administration in 2003.
He said, “The ministry presented two memoranda to the council. The first was with respect to approval to construct the Pankshin-Ballang-Yelleng-Salla-Gindiri road in Plateau State for N10.461billion, and the second one was with respect to the Share-Pategi road in Kwara State for N10.29 billion. Both prayers were approved by the council.
“The other memorandum was with respect to an inherited liability from the old power ministry where a judgment of N119 billion had been signed against the Federal Government as a result of acts of officials of government who varied a presidential approval without seeking a further directive from him and then awarded a contract on that basis.”
According to Fashola, the officials of government varied the Presidential approval without seeking a 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.
He added that “So, the party, who was a beneficiary of that contract, which they subsequently sought to withdraw, went to court and got a judgment. These were some of the problems inherited from the last administration.
“But we successfully reached a compromise on that matter where the judgment had been compromised for N119 billion to N19.369.520 million. So, the government is no longer liable under this new agreement to pay that sum. That took about almost the entire period of my tenure as minister to achieve this.
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 N39.17Billion held under another judgement in court to be used now for the supply of electricity metres to the Discos.
He added that all of the disputes arose from a contract to supply 3,000,000 metres entered into with the contractor and National Electric Power Authority (NEPA), which became Power Holding Company of Nigeria (PHCN), in 2003; about 14 years ago.
“But what it then does also is to free up N39.17billion held under another judgment in court to be used now for the supply of electricity meters to the Discos. Now, all of these disputes arose from a contract to supply three million meters entered into with a contractor and NEPA, which became PHCN in 2003, about 14 years ago.”
According to Fashola, “The contract was never fully performed by both parties, neither by the contractor nor government. So, from the very early days, it ended up in court and government constituted one committee after the another to resolved the matter. So, there was a court judgement and money was left in the bank, the purpose couldn’t be achieved then a new contract was created which became the liability of N119 billion.
“The happy news is that Council approved the memo to give effect to the negotiations we were able to put together to compromise that judgement entirely and to convert the old N39billion now to a loan to that contractor so that they can use it to supply meters through the Discos.”