Energy
How corruption at Rural Electrification Agency keeps Nigeria dark
Rural Nigeria remains largely in darkness as the agency saddled with lighting it up fails woefully
By Elijah Olusegun
Deep in the rustic belly of Ejigbo Local Government in Osun State, about 30 minutes ride from Ede North, some miles from Iragberi, by 6.00pm, a pall of darkness will descend on a particular community in that neck of the woods, turning it into a black, lifeless haunt. Ayegunle is just like most rural areas across the south west. It is one of the communities that make up the 40 percent of the 80 million Nigerians that the World Bank says cannot access regular power supply. The only difference between the darkness here and elsewhere is the thickness, determined by time—how long the villagers have been left in the dust, as rural electrification goes.
No calendar ticking off the timelines. But the folks at Ayegunle have an idea of how long they have been groping in darkness. “You remember the day Adeolu (not real name) was born in 2011 was when the transformer exploded,” said Mrs Jimoh on January 30, when the reporter visited the community. She was trying to help her husband, who is the Baba Kekere of Ayegunle, jog his memory. Their son is about eight now, and he has never known electricity, at least as it is supplied to his village.
Like other youth, Adeolu will soon grow out of his dwindling native community peopled with 200 peasants. Only after then will he be able to know what power from the national grid feels like. All he knows, now, is the subtle but pervasive grip of darkness too strong to dispel for his father’s generating set that rattles into action only on occasion.
It costs a small fortune to run the set. “If we have lots of cassava to grate, or somebody’s wife is about to be delivered of a baby at the village clinic, we use our generators,” said Baba Kekere.
“We used to have “radionics” [technicians that repair radio sets], a juice factory, a filling station, and others,’ said Mr Jimoh. “ They all left when they could no longer cope without light [power supply].”
Not all that glows in REA is real
Ayegunle was once a cheery, lit-up village. There are a dozen electric poles bearing overhead aluminum cables that connect the community to the national grid. At the southern entrance lies a spot, fenced in, showing where the village transformer that pooped out used to stand eight years ago. And by 2016, that empty spot was supposed to be—and already recorded as being—filled with another 300kva transformer. It was one of the 10 transformer installation projects amongst the 26 electrification projects the Rural Electrification Agency (under the ministry of housing, power, and works) proposed in the 2016 budget for selected rural areas in the southwest. It was also one of the bold figures making up a dazzling display of data on the agency’s website—as part of its achievements (197 budgeted projects) marked “on-going” across the six geo-political zones since 2016.
The figures on the database are supposed to account for the agency’s stewardship. They are also meant to serve as a transparent explanation of how the REA tenders board spent the N3 billion released out of the N11 billion capital budget it proposed that year. But, on www.rea.gov.ng, the stats are a smokescreen.
REA’s Chief Executive Officer, Damilola Ogunbiyi, readily toots her agency’s horn when she talks about rural electrification. “I think we are doing a very good job,’ she told ThisDay in 2018 when she was asked about REA’s project initiation and planning. She explained that the zonal offices, with their coordinators, are the project implementation arms of the agency. But those coordinators have no idea where the projects are and what the status reports say.
At every opportunity, the first female REA boss, an award-winning one to boot, will chip in the awesomeness of their app and database heaving with figures of achievements and successes her administration has recorded – hundreds of installations and off-grid power facilities. It does not matter that the 2017 contracts data is not available – except empty figures and links that lead nowhere.
Even many of the rural electrification projects on the database aren’t as real as Ogunbiyi and her agency want to make Nigerians believe. The figures are a jumble of paper projects, virtual money, and fake contractors. Many of the projects were not started at all, especially those transformer acquisition and installation projects for which the agency budgeted N157 million.
It was a miserable vote, compared to the number of projects for that year. And like other government agencies, the REA cannot help whining. “The bane of the power industry is poor funding,” Ogunbiyi noted during the 2018 edition of the Nigeria Off-Grid Innovations and Summit in Lagos. How poor funding sways bidding and pops up empty figures will, however, be a tough one for Ogunbiyi to explain away. Questions which the National Daily asked her about these inconsistencies between the realities and what her agency flaunts were not answered. Please this is not enough. You must state when, how and what questions she was asked and how she refused to respond.
Meagre as the 2016 capital budget was, bidding for projects — of which many would not be funded — still went on. And seven contractors were awarded seven out of the 10 projects. But investigations show that four of the companies are not registered with the Corporate Affairs Commission (CAC). They also failed other requirements in the checklist which the REA itself put out as procurement eligibility standard.
It was a skewed bidding. And the result was not unexpected. Across the five states of the southwest where the transformer installation projects were sited, the National Daily investigation reveals there is no single transformer on the ground now, three years after. The agency itself cannot identify any except on paper. And many of the contractors have vanished.
Those projects didn’t just fail. Some things are responsible for this: from a breach in procurement process to inadequate budgeting and poor monitoring. And, officially, the buck stops on the REA table — its CEO’s in particular, and procurement director, Ngene C. Emeka’s. But the burden of darkness remains, in the long run, the lot of thousands of rural dwellers for whom the rural electrification policy was formulated, to make living easier, stimulate rural economy, and reduce pressure on women and the environment.
It all began with the 2016 REA’s financial plan for the transformer installation projects, a plan riddled with loopholes. The plan also violated the Public Procurement Act, PPC, whose section 16(b) states: … No procurement proceeding shall be formalized until the procuring entity has ensured that funds are available to meet the obligation….
The spin-off of this poor planning cannot be mistaken in the yearly budget for these transformers, from 2016 to 2018. A raft of contracts, for no fewer than 28 transformers, with their capital votes, was farmed out in 2016—across Ogun West (N40m); six for Abeokuta South (N31m); five for Ibarapa East (N10m); one for Irewole LGA headquarters, Ikire (N14.5m); Ife Federal Constituency (N20m); five for Ede North, Ede South, and Egbedore; one for Ayegunle, in Ejigbo LGA (N23m); and 10 for Ekiti North (N20m).
Some of these would later resurface in 2017 – the Ekiti North projects and the Abeokuta South ones (N25m); and all of them, again, in 2018—under the line item construction, rehabilitation, and completion of ongoing rural electrification schemes (grid connection contracts). But the line items of some in the 2017 budget, for example, were tagged “completion of rural electrification projects (installation and supply contracts)” in Osun and Ekiti—at N187m and N155m respectively. Reckoning with the N157m that was the transformer installation budget across the southwest in 2016, these amounts appeared the balance for most of the on-going projects costs for the two states.
More funds were also budgeted for that purpose in the remaining four states. And in that same 2017 budget, the REA voted N1.5b for payment of debts owed contractors. But by 2018, the projects at Ikire (N14.5m), Abeokuta South (N14.5m), Ibarapa-East (N9.6m), Ede North (N14.5m), Ekiti North (N29m) were all summed up again as new or on-going projects, among all REA’s projects, voted N1.03bn to complete.
All these three years, while the REA marked up the 2016 projects as on-going, some deals were going on. No new rural electrification projects came up in the 2018 budget, across the federation, except in Chachangi, Sokoto State. The agency focused on construction, rehabilitation, and completion of all its old projects. But in Ekiti North, where the agency still cannot account for 10 transformers it claimed it installed in 2016 , two 500kva transformers were planted at Oye and Ikole, and marked as 2018 projects. The new contractor was Aero Systems and Technology Ltd Services, and the cost was N50m. Going by the 2017 budget, the two were amongst the new rural electrification projects that went through bidding that year. It’s not clear yet why they were recorded as 2018 projects. In other words, same projects in Ekiti North, for instance, were awarded for three years to two different contractors. Then some of the 2017 awards were executed, as 2018 projects, while those of the 2016 there, and in all other states except Ondo, repeated for three years, had no trace.
The REA on its website still describes the phantom projects as on-going, but states them as completed in a clarification (document) it sent the National Daily. The agency makes verifying this contradiction difficult: it sited the projects in so broad a manner it would take a lot of hoofing it through every local government or town to locate.
This doublespeak could only mean one of two things: the REA awarded the contracts without enough money to fund them available from its N11 billion capital budget; or the agency merely went through the ritual of procurement, and awarded the contracts to certain bidders when it was sure the projects were non-starters.
Those successful contractors might have tendered the most responsive bids, as the Public Procurement Act (PPA) requires. Only that in the REA case, the bidding went against the grain of the Act, by awarding contracts to unregistered and unaccredited bidders the law bars from participating.
In section 25 (2) of the PPA, under the General Conditions of Contract, the contractors, first of all, must have been registered with the CAC for at least three years before bidding; and they must provide tax clearance certificates, Industrial Training Fund clearance certificates and Pencom clearance certificates for those years.
To make the process foolproof, REA insists the National Electricity Management Services Agency, which sees to technical competence of the contractors, must train and certify the engineers of these companies. To cap it all, the bidders must be on the database of Nigeria’s Bureau of Public Procurement, BPP contractors with their Interim Registration Report IDs.
Somehow, this maze of screening ended up as useless. The REA and its procurement unit went ahead and awarded contracts to unaccredited companies like Beltek Global Solutions—for Ife Federal Constituency; and the unregistered and unaccredited duo of Aabowa & Co Nigeria Ltd—for Ekiti North, and IFCO Gudeffort Nigeria Ltd for Ogogoro Village, at Ibeju Lekki, Lagos.
A CAC search, by the National Daily, for these two—Aaabowa, IFCO—returned no result. NEMSA didn’t certify them either. Two others—Afribased Projects Ltd (Ibarapa/Ido) and Borno Electrical Engineering Services, (Ikire)—also bagged the installation contracts. These two unregistered companies still pulled stringsand got NEMSA’s certification.
Of all the contractors, only three—Beltek, Nebiks Engineering Ltd and Noranto Royale Resources (Ife Federal, Ede North and Ede South, Egbedore, Ayegunle) respectively — are registered companies. But the three are not accredited by NEMSA. That speaks a lot on the contractors’ technical competence.
The only duly registered and certified company on the transformer installation projects is Belsa’ad Global Services, which first won the award for the Abeokuta South project in 2016. No trace of the projects, though.
Gaming the system as the REA and its contractor might have done is an offence. Any officer of the procuring agency that violates this law, says the PPA in section 58, is liable on conviction to a cumulative punishment of a term of imprisonment of not less than five calendar years without any option of fine; and summary dismissal from government services. And the ineligible tenderers, too, will not only be banned for five years, but may also bag a jail term not less than three years
REA boss, directors caught in their own web
Ogunbiyi and her coordinator, in their clarification, could not tell exactly why the REA awarded contracts to these unqualified contractors—in defiance of the PPA.
The procurement law, apart from ensuring that Nigerians get value for the taxes the government spends on public projects, also ensures one more thing: transparency. To pin the 2016 transformer procurement performance on the REA and its contractors is, however, a tough job.
The southwest coordinator of the agency, Owoyomi Ademola, didn’t respond initially to enquiries the National Daily sent him on the agency’s projects in the region. “You write officially to the headquarters,” he told the newspaper last year. He had no answer for Ayegunle, either, when its traditional ruler , Oba Akeem Ajayi, asked him, following the National Daily visit, why the transformer never came.
The questions directed to the REA’s Abuja headquarters last November got no response until February 11 when the reporter asked Ogunbiyi directly by email. She told one Kawu, an engineer, the director of projects, to respond. By February 15, rather than clarify the issues the newspaper raised on budget irregularity and alleged procurement violation by the agency, Kawu, as directed by Ogunbiyi, sent an excel document containing all the southwest rural electrification projects paid for and completed in 2016.
Some facts, however, came clearer. First, funding was not an issue. Kawu did not state in his comment the REA was unable to fund the projects. It also turns out the data it displays to Nigerians are different from what the agency provided in response to the reporter’s questions. Kawu said some contractors—Beltek, Belsa’ad, and Borno—didn’t mobilise to site in 2016. “The projects were re-advertised in 2017 and procured in 2017,” he wrote in the document. The three still have their names tied to these projects on REA website.
Beltek’s was later re-awarded to Yekco Nigeria Ltd while Borno’s went to Akinkas Interbiz Ltd, and Belsa’ad’s to Razolak Service Nig. Ltd. The three projects, Kawu wrote, were completed—in 2017. But in 2018, the project at Ikire, for instance, and many others, came up in the REA budget. At Ayegunle, the transformer project has no contractor on the agency’s website. But Kawu now gave it a face: Ayoka Co. Nigeria Ltd. The project was also completed, according to him, though the southwest coordinator wouldn’t confirm that. Why can you not independently verify this?
Other 2016 projects the REA director said were completed and fully paid for include those in Abeokuta South, Ibarapa-East, Ede North, Ede South, Ekiti North. -There are 27 projects in all. These completed projects still turned up again in the 2018 budget.
Here’s the creative accounting: 28, out of over 30 recurring transformer projects, voted about N98m in 2016, were completed between 2016 and 2017, at N89 million, and paid up; but, somehow, the REA still padded them again into the 2018 budget, amongst its ongoing projects/schemes that needed N1.03bn to complete, after it voted N1.5b in 2017 for settling up all contractors it owed.
In terms of brick and mortar, these projects — even if they were completed —are castles in the sky. The REA itself, when asked, had no way of pinpointing them. Budget-monitoring NGOs, BudgIT especially, have also tried to track these projects. According to the 2016 Tracka report, there was little luck in the hunt for the agency’s completed projects, including the more than 30 transformers sited in most of the southwest, under the 2016 intervention (constituency) projects.
These were holes Kawu could not patch up in his response when the reporter pointed them out. So the southwest coordinator who, for red-tapism, would not respond to questions until he was cleared by Abuja, was now asked to take over. Owoyomi, on Feb. 13, said Kawu’s clarification might not necessarily hold out. “I am the southwest coordinator.”
His account was by no means better or straight to the point: some rambling about procurement, capital stretched thin over constituency projects and other trifles. He then promised to get back with proof and details of the contractors, projects completion, and budget repetition—questions that have been batted around with the CEO and her director for about a week.
Owoyemi sent an SMS Feb 18 — that he was still compiling his response. He never got around to finishing it.
As the REA officials failed to answer the questions the National Daily asked, there was still a sure way to know whether Kawu, Owoyomi, and their CEO were bending the truth throughproject certification, which the PPA outlines. And the responsibility—to inspect, certify as completed, enforce technical standards, and test any electrical projects of the federal government—falls to NEMSA.
But its field coordinators in Lagos, Oyo-Osun, Ekiti-Ondo, and Ogun could not tell off the top of their heads if they inspected or certified or tested any transformers in 2016. Bureaucracy, too, became an issue.
“You will need to contact Abuja first before we can do anything or check our certification reports for you,” one of them told the National Daily. The request the newspaper mailed to NEMSA’s through Theophylus Simon, a senior manager, who earlier responded officially to the first inquiry,went unanswered.
There is no reason the REA shouldn’t have these NEMSA certificates, too—to present as evidence of the projects it completed. The certification was one of the questions the reporter asked Ogunbiyi, Kawu, and Owoyomi. None of them could provide any.
The locals, including the Oba of Ayegunle, who has been peppering Owoyomi with questions, believe it is bad of the procuring agency flaunting projects that never started as completed.
Flaunting fake figures might be just a tip of their con artistry at the REA.
After an eternity of chopping and changing over the questions National Daily asked and the evidence it presented, the REA directors went ahead and pulled the 2016 dataset and link that gave them away from the web portal. The vague detail available before–contractor names, project cost, date of award–are no more as of March. The 2017 procurement information has also been thinned down. No more bells and whistles.
Website before National Daily investigation
Ghost bidders—REA’s agents of darkness
If the angry communities believe the procuring REA is crooked, its bidders are also not, by a long shot, straight. While contractors like IFCO Gudeffort could not be traced at all, others like Noranto Royale and Nebiks gave fake addresses as obtained on NEMSA’s website. Noranto’s office, a white palatial building whose address (No. 12, Chari Street, off Bobo Street, Maitama, Abuja) was submitted to NEMSA, is not an office. Nebiks’ is an abandoned property previously occupied by Kalo Medico, a health service provider, at Block 4, Epe Close, Area 1, Garki, Abuja. It was likely these contractors just won the transformer installation bids, and went off the books.
Beltek is traceable—not because it submitted its corporate details to NEMSA which publishes identities of REA’s contractors. But its Internet footprint reveals the unaccredited company, which got the Ife Federal Constituency contract, runs its business at suite F5 of Febson Mall in Area 4, Garki, Abuja. However, the real Febson Mall is at Kitwe Street, Zone 4, Wuse, Abuja, not Garki.Registered in 2008, Beltek does not seem to be an electrical engineering company—more likely an ICT tshop that doubles as a Jack of all trades. It actually got two rural electrification projects in 2016, according to a worker there. On the 2016 REA project, the contractor wasn’t ready to say much. “We rejected the project, and so you go and ask the REA,” the female employee who identified herself as Joke told the National Daily. “The money they offered for the contract was too small, and we wouldn’t want to deliver a shoddy job,” she added, her response toned with aggression. She wanted to show the reporter that letter of withdrawal Beltek wrote to the agency in 2017, but changed her mind. And she refused to release her boss’ contact.
Some things aren’t straight in what Joke said about her company and the transformer project. One, Beltek was among the contractors with the most responsive tenders during the bidding in 2016. There was no reason the contract sum, N16.4m (of the N20m budgeted) could become an issue after the contract validity period (when you may reject an offer) was over in 2017 when Joke said Beltek rejected the offer. Maybe it just dawned on them, then, that the project would cost more. But a 500kva transformer currently sells for about N220, 000 on the market.
Pulling out at this level — like Beltek did — is a breach of contract. And the company ought to have been sanctioned for that. The Instructions to Tenderers (ITT) clause 15 of the PPA mandates contractors to present a bank-backed security where the contractor pays certain amount as a fine for breaching the contract agreement.
Withdrawal apart, Beltek has another problem, which raises a red flag. The company is an ICT solutions provider—not an electrical engineering contractor per se. Which also raises questions about the company’s experience and competence. And it was notthe only one. To head-off newbies and quacks bidding for and winning government contracts, the PPA requires evidence of similar projects Beltek undertook in the last three years. NEMSA, too, requires the company to present a certified engineer, who takes responsibility for the project execution. He also takes the knock if things go bad, according to Haruna N. Ibrahim, a NEMSA official of who explained the process to the National Daily.
But Beltek, unaccredited, still slithered through all this. No NEMSA accreditation. No certified engineer.
Likewise Afribased Projects and Aabowa — both unregistered contractors. Aabowa was among the bidders for a generator supply contract at the Obafemi Awolowo University Teaching Hospital Complex, Ife, Osun in 2018. Afribased is a builder. It also dabbles in any kind of contract, one of its former employees told the reporter. It was prequalified for a Universal Basic Education Commission’s contract in 2017, and disqualified by the Nigeria Customs Service during the 2016 bidding for office construction. Yet it qualified for the REA bidding same year. Even when Afribased and Aabowa did not meet NEMSA’s requirements, they still clinched the REA transformer installation contracts.
How they scraped through remains a secret of the open bidding process the REA conducted. The secret even turns into a mystery as it becomes difficult to identify five of the seven contractors that won the bid. The National Daily was able to track down two: Beltek through its digital trail; Borno Electrical Engineering through the contact details it left with NEMSA. But neither of the two was ready to be interviewed. Borno’s engineer Mohammed Uzairu was made unavailable the two times the newspaper visited the company’s office on the second floor of Ajami Plaza, Garki, Abuja. The company’s chairman was on seat when the newspaper visited February 8, but he also refused to speak on what happened to his contract of installing a 15 MVA transformer at Ikire.
Whatever happened, there was no transformer installed. An employee of the Ibadan Distribution Company at the Ayedaade area of the town told the National Daily the entire town was still connected only to the 7.5 MVA transformer at the transmission station, which has been there for ages. “We heard about the 15 MVA then—that it was facilitated by the late Sen. Isiaka Adeleke,” he said. “But nothing happened. Maybe his death caused it.”
The cause is still not certain. And the REA that could have shed more light on the whole process kept begging the question. Even if the agency speaks on the failure, what seems a moot point is how its excuse can make Ayegunle and other communities smile as they fumble about in the heart of darkness.
Poverty energised
At Ipokia, a farming community in Ogun West, there are some transformers: an old one commissioned by a military administrator, Wing Commander Sam Ewang, in August, 1997; others weathered, useless, and abandoned. The community was also in the dark about what the REA does, and what it allotted to rural areas under Ogun West as constituency projects in 2016, which Kawu said are still ongoing as of Feb 2019.
The Ipokia Local Government secretariat was as clueless too. A worker the National Daily asked about any REA’s project couldn’t tell who provided the new one he knew about. It sure wasn’t REA. A presidential candidate who contested the February election did, with his name printed on the equipment.
At Ado Odo, Imeko Afon, Ake in Abeoukta South, and others, the story is similar. Local government authorities, and electricity distribution companies that power on transformers after installation couldn’t tell of or locate any REA’s 2016 projects they saw in recent times. “The federal government doesn’t carry us along in their projects,” said Abeokuta South LGA’s director of information. The IBDC engineers may have an idea.” They didn’t. “We energise so many transformers weekly we can’t tell which one is REA’s or anyone else’s,” said Ayodeji Bada, the IBDCs’s brand and information manager for the Ake area.
It hurts the locals that the REA keeps them on the fringe of its information loop. Many, including local government officials, believed it is all about fraud siting a project without an exact location. What hurts the people more is the choke-hold of poor power supply on their lives. “If you finish secondary school here, and you don’t want to farm or ride commercial bikes, you may learn a trade,’ said a commercial bike rider at Ado Odo. “And as you finish learning, a Lister generator is part of your ‘freedom’ budget. Every artisan here has one.” A 15 KVA Lister generator goes for about N300, 000—fuelling and other running cost apart.
Perhaps many of the artisans at Ado Odo can afford that. At Ewu Ekiti, the rural tradesmen aren’t that buoyant. The town, of about 80,000 people, according to a chief probably exaggerating, is under Ido Osi, Ekiti North. It boasts just one transformer. Community members clubbed together to buy a second one they were still looking for fund to install. For now, they only have electricity supply in the wee hours of the night. But welders and other artisans who needed a daily supply couldn’t just sit down, and cross their fingers. “What they do is call one another and go to work when there is light [power supply] in the night,” said Chief Edunmorun.
Across Ekiti north, the only rural electrification projects on the ground are the 2018 repeats. They were installed by Aero Systems & Technology—not necessarily for the communities. In Oye, for instance, an old transformer was dusted up at a market place close to the Oloye palace, and a signpost reared up beside the installation, tagging it as a 2018 project of the REA. “That transformer has been there for years,” two market men told the National Daily. “They just came last year, cleared the bush, and put up that board.” At Ododoro, Ikole Ekiti, another one, not yet energized, was installed last year at a junction leading to the house of a federal lawmaker, Hon. Emmanuel Kehinde Agboola, who facilitated it. The cabling led to his house alone.
But elsewhere in the constituency —Usi, Ayetoro, others —are transformers installed 40 years ago, and some, in 2011, branded “Imole Tan Project”. The Vice President of the Usi Ekiti Community Council said there had never been any new transformer installed in the town in the last four decades. He was that sure because, apart from being a community leader, he’s a cottage entrepreneur. And he’s coughing up so much, N40, 000, for fuelling—to power his business—an ice block making plant. “If we had stable power supply, I would employ more people from the savings on fuelling,” said Ajayi Matthew as he opened his generator house, responding to the question on what it takes to run a business like that on generating sets.
Spending more than 10 percent of one’s income on energy tends to what development watchers call energy poverty. About 75 percent of Nigeria, the National Bureau of Statistics says, waddles in this kind of poverty. A big bulge of the demographics, 51 percent, according to the World Bank, living below $2 daily, populate the rural areas. These are places like Ewu—at Moro, Yakoyo, Ipetu Modu, and Asipa, in Ife Federal Constituency, Osun—where people like Matthew have ramped up huge bills on fuelling over the years.
For him and others, the year 2019 will not be different, though the federal government has been mouthing increasing access to electricity to 75 percent in a year’s time, and 90 percent by 2030.
Funding will never be enough to carry out all public projects, procurement advocates agree. But bending the procurement rules, as the REA has been doing, will only make rural electrification problem worse off, and the rural dwellers poorer.
This investigation is supported by the John D. and Catherine T. MacArthur Foundation and the International Centre for Investigative Reporting.