March 3, 2024

Senator Bassey urges Senate to investigate ACUGAS supply deal

Senator Bassey urges Senate to investigate ACUGAS supply deal

Senator Aniekan Bassey has called on the Senate to investigate the controversial Make-Up Gas (MUG) reprocessing deal involving the Federal Ministry of Finance, Niger Delta Power Holding Company (NDPHC), Calabar Generation Company Limited and Acugas Limited.

Senator Bassey, who represents the Akwa Ibom North-East Senatorial District in the Senate, made the call through a motion during Thursday’s plenary.

In the motion, Senator Bassey observed: “The controversial MUG deal was devoid of transparency and allegedly involved the payment of huge sums of money as fees to Transactions Advisers even when Acugas Ltd was reportedly discussing the extension of the sunset date for the utilisation of the MUG without the involvement of paid consultants or Transaction Advisers with an addendum to the Gas Supply Agreement (GSA) already signed between the parties.”

He said: “If the Senate does not investigate the circumstances under which the GSA and MUG were executed by the Federal Government with Acugas Limited, these transactions would constitute an endless drain on scarce public funds which should have been applied towards the execution of other pressing Government projects.”

Senator Bassey prayed the Senate to, “establish an Ad-Hoc Committee and mandate the Committee to investigate the  circumstances under which the GSA  and MUG  arrangement was executed, the parties involved, payments so far made to entities to date, the status of implementation of the GSA, and for this purpose invite all stakeholders to the transaction including the Immediate past Minister of Finance, Budget and Economic Planning, Dr Zainab Ahmed, the NDPHC, Acugas Limited, Calabar Genco, the Transaction Adviser engaged under the MUG deal, etc,and to report back within two weeks.”

According to Senator Bassey, “the Niger Delta Power Holding Company (NDPHC), a company owned by the Federal, State and Local Governments in Nigeria to hold and manage Nigeria’s Independent Power Projects, sometime in 2017, entered into a GSA with Acugas Limited for the supply of gas to Calabar Generation Company Ltd (Calabar Genco), a subsidiary of the NDPHC. Under the GSA, the Federal Government of Nigeria is obliged to pay over $10 million monthly to Acusgas Limited and this monthly obligation was protected and secured with a Take-or-Pay clause implying that the monthly payment of over $ 10 million must be discharged unfailingly by the Federal Government whether the Calabar Genco takes delivery of gas or not.”

The Senator further explained that “the discharge of the Take-or-Pay obligation by the Federal Government has become a major concern to all well-meaning Nigerians because of its huge burden on public treasury as huge sums of money were paid to Acugas even for gas not received or utilized by Calabar Genco.”

“In a bid to get Nigeria out of this controversial Take-or-Pay cul de sac and put in place an arrangement to reprocess and redirect the gas for which Nigeria has paid for but not utilized over time, the then Minister of Finance, Budget and National Planning, Dr Zainab Ahmed initiated a MUG deal involving Calabar Genco and Acugas Ltd.”

The Akwa Ibom North-East Senatorial District Senator further urged the Federal Government particularly the Office of the Attorney General of the Federation to ensure due diligence in the preparation and execution of transaction agreements with companies and other investors to avoid the ugly scenario Government is facing under the GSA with Acugas Limited and several other entities.

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