The Senate has uncovered how the Nigeria Bulk Electricity Trading Plc (NBET) mismanaged N50billion in the Escrow Account.
According to the Senate, the N50billion in the Escrow account is from sales of Egbin, Omotosho, and Olorunsogo Power plants.
Senator Matthew Urhoghide, Peoples Democratic Party (PDP), Edo South-led Senate Committee on Public Accounts, which raised the alarm, and exposed the mismanagement of public funds in the Escrow Account, has also discovered that the renegotiation was carried out after two years from 0.02 to 2 per cent per annum.
The Urhoghide-led committee is relying on the query raised by the Office of the Auditor General of the Federation in the 2015 report and brought before it for probe and subsequent presentation to the Senate at Plenary.
The query read, “Funds in form of escrows in the possession of EGBIN ESCROW agreement FCMB Escrow Account BPE/NBET 2435507018 – N30,000,000.000, UBA Escrow Account BPE/NBET 1017699148 – N10,000,000,000.00, FBN Escrow Account BPE/NBET 2024063360 – N10,000,000,000.00.”
The following observations were made: there was no execution date, as the agreement only stated 2013.
“This has been left out deliberately and arouses suspicion of malpractices. This is evidenced by a mail sent by the Legal Counsel to the Bureau of Public Enterprises (BPE), asking for this information which was never replied to.
“As stated in the original draft agreement, the rate of interest generated on escrow funds shall be agreed between BPE, NBET and the escrow agents (banks) but subsequent manipulated agreement sighted states.
“The interest shall be CONCESSIONARY taking into account a reasonable compensation of the escrow agents in the CONSIDERATION for their OBLIGATION under the agreement.
“The minutes of the meeting that decided the concessionary rate and the obligation of the escrow agents necessitating any form of consideration as well as the identities of the attendants and parties to the proposed and implemented 0.025 per cent interest on the escrow fund should be produced.
“It is pertinent to note the financial mismanagement in the sum of over N5,000,000,000.00 which would have been realized on the investment of the funds in Nigeria Treasury Bills at an interest rate of 10 per cent.
“Olorunsogo power plant, OLORUNSOGO escrow agreement FCMB, IBANGB555CBL60910412544458, $10,110,000.00, Omotosho power plant OMOTOSHO escrow agreement Diamond Bank PLC IBAN 021000089, N10,110,000.00.
In its written response, NBET said, “it was never stated that the fund will be invested in the Treasury Bill. However, with the reduction in CRR, the rates on sitting balance for the Egbin was renegotiated to 2 per cent from 0.02 per cent per annum effective July 01, 2015.”