NERC board’s severance: Reps uncover irregularities

The House of Representatives panel investigating alleged plans by the Nigeria Electricity Regulatory Commission (NERC) to pay its retiring commissioners billions of naira in severance package has queried the commission for acting against laid down rules and regulations. The commission’s chairman Dr Sam Amadi however denied the charge. Daily Trust had on November 2 based […]

The House of Representatives panel investigating alleged plans by the Nigeria Electricity Regulatory Commission (NERC) to pay its retiring commissioners billions of naira in severance package has queried the commission for acting against laid down rules and regulations.

The commission’s chairman Dr Sam Amadi however denied the charge.

Daily Trust had on November 2 based on multiple sources reported that the commission had concluded plans to pay seven of its commissioners N2.7 billion as severance package when their five year tenure ends on December 22, 2015.

On November 17, Daily Trust reported, citing official documents, on the plan to pay N2.04 billion to the retiring commissioners.

Following the first report, the House of Representatives passed a resolution mandating its committee on power to investigate the commission.

At the resume public hearing on Tuesday, Amadi said: "There’s no plan to pay N2.7 billion or any money to any commissioner. We intend to take it up with the newspaper."

Members of the committee disagreed with Amadi’s position and sought to know the benefits of NERC commissioners in terms of salary and severance package.

Amadi declined to respond to the question saying he could not disclose that in public and referred the committee to the documents he submitted to them.

The lawmakers further sought to know if there was any form of communication between NERC and the salaries and wages commission even as they observed that there was a rise in the salaries of members of the commission compared to what obtained during the tenure of last commissioners and now.

The lawmakers said based on NERC’s documents, there was a severance package approved in 2006, while another one was approved on August 15, 2014 which shot up the amount.

They observed that although the 2006 approval was 300 percent of annual earnings, the amendment of 2014 was 100 percent of gross income. The lawmakers demanded for the communication between NERC and salaries commission, but there was none.

Chairman of NERC, Amadi said as a lawyer, he ensured that everything the commission did was in accordance with the law, adding that the genesis of the N2.7 billion was the evaluation of a sinking fund for staff of the commission.

He said the commission put severance package of its staff at 20 percent based on the pension Act, while the gratuity was put at 100 percent of gross earnings of staff.

He said at a point when one of their staff was to retire, they wrote to the pension commission to seek their advice on the matter, and that the commission said the percentages were okay.

He also said based on the provision of the commission’s Act, commissioners are not supposed to work in the power industry two years after retirement, which was why there was a provision for them to be paid for two years debarmentt.

"The two-year debarment was approved by the president, and the present commissioners didn’t do anything to add up to their entitlements," he said.

Amadi further said his commission wrote to the salaries and wages commission and that they got a reply with recommendation, adding that the rise in their salaries was based on public service rules and the handbook they met. “The attorney-general said we were right to have the final say on this issue," he said.

But chairman of the National Incomes, Salaries and Wages Commission, Richard Egbule said NERC was not entitled to the 53 percent salary increment that it carried out, saying it was approved for public servants who are on the harmonised salary scale.

He said 26.7 percent was approved for public servants not on the harmonized scale and whose packages were already considered high.

Egbule said his commission does not fix salaries for NERC but makes recommendations to be approved by the president and confirmed by the Accountant General of the Federation (AGF).

He said in 2012, his commission discovered that NERC was paying above what was approved for it, adding that they set up a committee on the matter and "we wrote NERC to stop the payment, and copied Budget Office, SGF."

He said NERC went ahead to write to the Budget Office that his commission cleared the issue, adding that NERC commissioners and workers are not entitled to severance allowances as their packages are already high.

"Those agencies who make a lot of money are reluctant to be regulated; CBN, PENCOM, NDIC, NCC," he said.

The lawmakers further observed that based on the documents, the sum of N2.017 billion was transferred to a bank by the commission as part of its severance package sinking fund on May 5, 2015, whereas NERC wrote a letter to PenCom seeking for advice on October 28, 2015 "after the deal was already done."

Also, the lawmakers observed that while 100 percent gratuity of NERC staff is based on gross; the initial one of 120 percent sought by the commission was based on consolidated salary.

Meanwhile, the lawmakers have given minister of works, power and housing Babatunde Fashola one week to make adequate presentation before the committee on the issue.

This followed the rejection of a presentation made by the director of reform coordination in the ministry Mrs. Bola Laditan in absence of Fashola. The minister later appeared before the committee and pleaded for additional time to prepare his presentation. The hearing continues on Wednesday.