While the man himself said he resigned because of the pressure from vested interests in the sector, some argued it was a sack, and even President Jonathan himself weighed in, saying Nnaji had to go not because he did wrong, but just so that the privatisation process would succeed.
Well, here’s another angle for you. A letter has somehow surfaced in the media, showing that the leadership of the Peoples Democratic Party (PDP) encouraged President Goodluck Jonathan to remove the ex-minister. The memo, which emanated from the office of the PDP national chairman, Bamanga Tukur, and signed by him, is dated July 22. Tukur addressed the letter to President Jonathan and Vice President Namadi Sambo, who is the chairman of the National Council on Privatisation (NCP).
After enumerating a list of infractions by Nnaji, the PDP chairman called on the president to “Relieve the Hon. Minister of Power from his position for his conflicting interest as a regulator and participant in the power sector…”
Here’s how Thisday reported the story:
In the letter, Tukur highlighted the problems facing the power sector in the country, but indicted Nnaji for alleged complicity in some of the problems and conflict of interest in the privatisation process.
The PDP chairman called for his immediate sack in order for the country to make headway in the ongoing power sector reforms.
Tukur blamed the challenges of power generation on the alleged “Conflict of interest between the office of the Hon. Minister of Power, Prof. Barth Nnaji, who has put personal interest above national imperatives of providing an urgent solution to the gross insufficiency in power generation in Nigeria.
“The minister is known to own large interest in Geometrics, a power company that has been taken over by the Asset Management Corporation of Nigeria (AMCON) for an unserviceable loan of N25 billion.”
The party chairman said he suspected the former minister also own proxy interests in some of the new independent power plants (IPPs) “hurriedly put together to benefit from Power Purchase Agreement (PPAs) even though such companies have not met the expected milestone that will put them in the position to generate electricity in the foreseeable future, while the other IPPS with ready-to-go practice (who have not met the necessary criteria and are in a position to generate electricity within the next six to 18months) are frustrated from getting approval for the PPAs because they are perceived as competitors to the minister’s self-made list of IPPs.”
This, according to the PDP chairman, is essentially one of the reasons why ready-to- go independent power projects are stunted.
Raising the issue of nepotism in the selection of companies for the power purchase agreement, he alleged that, “The Chief Executive of Bulk Purchasing Trading Company, Mr. Rumundaka Wonodi, was a staff of Geometrics and promotes the same hurriedly-put- together projects with personal interest for the PPAs. These projects, among other things, do not receive even concrete gas supply commitments from the international oil companies (IOCs) since they are not ready-to-go projects. “Meanwhile, ready-to-go IPPs, which secure a concrete gas supply commitment from IOCs, having fulfilled necessary criteria and are in position to generate power immediately, are denied PPAs approval and nominations for World Bank guarantee by the Bulk Trader because they are not on the minister’s favoured list. The consequence of this is that no Power Purchase Agreement is being signed and no IPP project can come on stream in time to fulfill our programme in the power sector.”
According to the memo, “The non-signing of PPAs for ready-to-go projects by the Bulk Trading company hampers the good work done by the gas aggregation company, the IOCs, indigenous oil and gas companies and the Ministry for Petroleum Resources who have put in place a robust plan for ‘Gas for Power’ arrangement. This is because when no PPA gets signed, no gas purchase agreement gets concluded. PPA in essence triggers the securitisation of payment for supply and consequently acts as impetus for investment in substantial gas supply in the value chain.”
He also added, “The indebtedness of the Hon. Minister’s company to Diamond Bank and AMCON is a pressure point that affects an honest and objective discharge of his duties when the reform process is at its infancy”.
In view of these weighty allegations, the PDP chairman said there was “an urgent need to remove all stumbling blocks threatening the fulfilment of our promises. Any further promises to Nigerians on any issue of our national life by the PDP-led administration will be discountenanced if we fail to deliver on the power sector”.
The party called for a far-reaching measure, challenging President Jonathan to: “Relieve the Hon. Minister of Power from his position for his conflicting interest as a regulator and participant in the power sector; reconstitute the management of the Bulk Trading Company; invite the leadership of international energy companies like General Electric of USA, Siemens and Credible IPPs who have ready-to-go projects and have signed Engineering, Procurement and Construction (EPC) contracts for their power plants for discussions”.
He maintained that “the international energy companies have already established these ready-to-go projects and would be in a better position to provide a guide. This will be the new momentum to rescue the industry. It is the IPPs that are the engines of power sector participation in the electricity industry, just as privatisation is transfer of existing monopolies to private hands.”
Well, the PDP had their way, and Nnaji is gone. The next step is crucial.
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