How TCN prevented us from recovering $69.38m Debt- NBET

How TCN prevented us from recovering $69.38m Debt- NBET

Releated Post

The Nigeria Bulk Electricity Trading Company , NBET has alleged that  the Transmission Company of Nigeria prevented  it from recovering about $69.38m debt owed it by two foreign firms operating from Benin Republic.

The allegation is contained in the management’s response to the audit query from the Office of the Auditor General for the Federation on non-compliance/internal control weaknesses in Ministries, Departments and Agencies of the Federal Government of Nigeria for the year ended 31st December 2020.

NBET, which coordinates power sales on behalf of the Federal Government, is directly supervised by the Federal Ministry of Finance  noted that TCN through a a petition halted it move to recover the debt.

The audit report signed by the Auditor General, Shaakaa Chira, with reference number AuGF/AR/2020/02, was submitted to the Clerk to the National Assembly on the 20th December 2023 in accordance to Section 85(2) and (4) of the Constitution of the Federal Republic of Nigeria, 1999 (as amended).

The management said “In June 2017, NBET and the TCN) through a joint letter, advised the Nigerian Electricity Company and Beninois Electricity Company respectively that they should continue to credit the account of TCN Market Operator pending the signing of the agreements that would put in place a new contractual /commercial framework with NBET.

“NBET proceeded to negotiate a new contractual/commercial framework with CEB and NIGERLEC respectively, but faced challenges from both TCN and the international customers in finalizing the new power sale agreements that would pave the way to fully assume the administration of these contractual relationships.

“While the government has directed NBET to conclude the international contractual engagements, TCN however wrote to the Federal Ministry of Power asserting that NBET has no role in the ECOWAS regional Electricity market and cannot be executing contracts with CEB and NIGELEC.

“The letter further stated that TCN has the responsibility to recover all outstanding debts and noted that they had reconciled the outstanding debt and were discussing a payment plan for offsetting the debt.

“Thus, it is the TCN that is in the best position to render an account for the outstanding payment. NBET is taking necessary steps for the recovery of its portion of the payments that have been credited to TCN.”

In its audit query to the government-owned company, the Auditor General for the Federation alleged that NBET failed to recover about $69.40m, translating to about N25.19bn (at the rate of N363 to a dollar as of 31st January 2019)

It said, “Paragraph 227(ii) of the Financial Regulations (FR) 2009 states “It is the responsibility of Accounting Officers to follow up outstanding items of revenue and to take all necessary steps to ensure collection or, where the collection is no longer possible, to apply to the Ministry of Finance for authority for a write-off, explaining the circumstances.

“Also, article 10.3 of Communate Electrique Du Benin (CEB) and article 13 of Societe Nigerienne D’Electricite (NIGELEC) of the contract agreements allowed for the interest of 5 per cent per annum and 1 per cent interest per month to be charged on the outstanding amount owed by CEB and NIGELEC as set out in the CEB and NIGELEC PSAS respectively.

“Audit observed that the company entered into an agreement with two firms that are based in Benin Republic for the supply of electricity to those firms. From the review of records available for audit, the company commenced the supply of electricity in January 2015.

“As of January 2019, the value of supply made to the two foreign firms amounted to $315.41m.

“Review of invoices provided for audit, however, revealed that, as of January 2019, the firms had only made payments to the tune of $246.02m leaving an outstanding of $69.38m.

“The company failed to provide for audit clarification and efforts made to ensure the recovery of these huge amounts which in Naira, amounts to N25,19bn at the rate of N363 to a dollar as of 31st January 2019.”



Leave a Reply

Your email address will not be published. Required fields are marked *

More Related Posts

Thanks for subscribing to our newsletter