ABUJA -THE Federal Government said  it has initiated the process for the dissolution of the Rural Electrification Agency, following series of contract scandals that rocked the agency recently.

The Minister of State for Power, Mr. Nuhu Somo Wya, who made the disclosure on Thursday at the contract signing ceremony for the 10MW Katsina Wind Farm to be constructed by a French firm, Vergnet Eolien, in Abuja , said government had sent a bill to the National Assembly asking for the repeal of the Act establishing the agency.

President Yar Adua

He however disowned a memo written by the Permanent Secretary of the Ministry ordering the Rural Electrification Agency to wind up, claiming that media reports on the scrapping of the agency was a creation of journalists.  According to him, “As far we are concerned, we have to address internal problems within the ministry. We have sent a bill to the National Assembly for the repeal of the law establishing REA.

“That does not stop us from doing any internal administrative work to address the perceived problems that exist in the agency. It is not scrapping; it is administrative measures taken to address issues that we have established in the agency.”

The bill to amend the Electricity Power Sector Reform Act so as to repeal REA followed investigations by the Economic and Financial Crimes Commission into allegations of N5.2bn scam in the award of contracts for rural electrification projects provided in the 2009 Federal Budget.

The EFCC filed a 158-count charge against the former Chairman of the House of Representatives Committee on Power, Mr. Ndudi Elumelu and the Chairman of Senate Committee on Power and Steel, Senator Nicholas Ugbane over the alleged scam.

Also facing trial are the former Chief Executive Officer of the Rural Electrification Agency, Mr. Samuel Gekpe, the former Permanent Secretary in the Ministry of Power, Alhalji Abdulahi Aliyu as well as the 21 companies that benefited from the contracts.

But employees of the agency criticised the plan to wind up the agency before the bill is considered, insisting that was in breach of due process.

The employees explained that while they were not opposed to the repeal of the REA, they insisted that the minister must wait until the National Assembly passed the bill before taking any action regarding an agency created by law.

In a letter by the Permanent Secretary of the Ministry of Power, Mr. Isa Bello to the Administrator of REA which was obtained by our correspondent in Abuja on Wednesday, the minister was quoted to have convened a meeting on September 10, 2009 where the decision to wind up the agency was taken.

The letter read that, “REA is hereby closed and that all outstanding rents due for payment should be compiled and forwarded to the Ministry and no further tenancy agreement is to be renewed on any rented property.

“All the property and assets of the agency should be documented and properly secured and all signposts of the defunct agency should be removed where they exist.

“Only expenditure related to staff emolument and welfare should be processed for approval and all correspondence to the defunct REA should henceforth be addressed to the Ministry.”

On the 10MW Kastina wind farm, Way said the contract was worth 18.5 million euros and N494,020,000.  He added that the contract was expected to be completed in 2011, but some units were expected to be deployed in 2010, thereby contributing to the nation’s generating capacity.

However, power generated from this source will not be delivered to the national grid, but will instead be operated as an island arrangement, Wya said.
The minister also noted that adequate provision is being made to deliver the power into the national grid should the need arise.
He said, “This is a pilot scheme, we will see how successful it is.

It should be replicated all over the country. It is very successful in the rest of the world.”
The minister indicated that the project was initiated as a consequence of the Federal Government Policy of promoting renewable energy and energy diversification so as to achieve energy security and reliability.

He further explained that a wind map for the entire country had been finalised indicating numerous viable sites for the deployment of wind turbines for power generation.

He added that “the 10MW wind farm project at Kastina is the first of its kind in the sub region and is expected to showcase the technology and blaze the trail for potential investors to replicate.

“As part of the overall renewable energy action plan, the Federal Government is also initiating the deployment of mega watts-class solar farms.”

On the Nigerian content in the execution of the contract, Way said Nigerian companies will participate as the project entails the supply of wind turbines and a 33kv transmission line.

He also stated that the Ministry of Power was yet to award any contract on solar power aside some existing pilot projects.
He said, “We want to go a step forward to do a minimum of 1MW solar project which will be sustainable and more useful to Nigeria.”