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EFCC Chairman, Mrs. Farida Waziri
N5bn REA scam: Projects inserted in amended 2008 budget
By Chiawo Nwankwo and Olufemi Adeosun, Abuja
Published: Thursday, 14 May 2009
Fresh facts that emerged on Wednesday indicated that the N5.2bn projects scam in the Rural Electrification Agency, which led to the arrest of some ministry officials and lawmakers in the National Assembly occured during the amendment of the 2008 budget.
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EFCC Chairman, Mrs. Farida Waziri
Investigations by our correspondents also showed that the Financial Intelligence Unit of the Economic and Financial Crimes Commission uncovered the fraud while monitoring huge financial transactions at some banks.
According to an EFCC source, the suspects used the opportunity presented by the supplementary budget proposals and subsequent debates at the parliament to insert the projects into the 2008 Appropriation Act.
He explained that the controversial contract comprised mainly solar panels and electricity grid extension projects.
But the projects were split into small units to ensure that the contracts did not go to the Federal Executive Council for approval.
According to existing rules guiding the award of contracts, a ministry is not empowered to approve any contract worth more than N50m.
Yar’Adua had submitted an amendment bill to the 2008 budget of N2.8tn to take care of some grey areas he raised after it was passed by the legislature.
He had noted that some details were lacking just as he considered the figure higher than normal.
However, the Head of Media and Publicity of the EFCC, Mr. Femi Babafemi, in an interview with one of our correspondents on Tuesday, disclosed that the FIU alert on huge transactions led to the discovery of the scam.
He said, “The FIU burst the scam, and when we moved in, we were able to trace the money in some accounts to have come from the REA and that was how the managing director and the permanent secretary of the ministry were arrested.
“From the statements we got from them, it became obvious that the lawmakers detained had some questions to answer over the matter.”
It was gathered from another source that shortly after the money for the contract was released, the REA Managing Director Mr. Sam Gapke, came under serious pressure for the contracts to be awarded between October and November last year.
Gapke, who was reportedly confused, complained to the permanent secretary, who allegedly cleared the fog for him.
However, it is not clear in the supplementary budget the projects directly linked to the scam, but under REA, capital projects are listed solar power projects and rural electrification projects.
Some solar-PV power supply and rural energy pilot projects said to be for poverty eradication are in nine locations in Kogi State and are worth N350m.
Another N350m was set aside for solar power supply projects for Onicha-Uku, Isele-Uku, Akwukwu Igbo, Ogwashi-Ukwu and Oko in Delta State.
A total of N160m of such projects broken into N40m each, are located in Niger State while a N100m project was to be cited in Bomadi/Patani in Delta State .
Ogun State also benefited with N540m projects. 10 of such projects are worth N450m.
A ministry under existing contract award guidelines, has N50m approval limit, while the Federal Executive Council approves contracts above N50m.
Besides, un-utilised N16.412, 030,961 for rural electricity projects in 2006, was part of the 2008 budget which covered all 36 states of the federation.
A total of 10 suspects are being detained over the N5.2bn scam, which include four lawmakers and six officials of the Ministry of Power, including its Permanent Secretary, Dr. Aliyu Abdullahi.
Suspects among the lawmakers are Senator Nicholas Ugbane, Chairman Senate Committee on Power, his counterpart in the House of Representatives, Mr. Ndudi Elumelu; Alhaji Mohammed Jibo and Mr. Paulinus Igwe.
The EFCC had on Tuesday filed a 156-count charge against the 10 suspects, who might be
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