Reps order stoppage of N2.7b severance pay for NERC chief, Amadi, six others

In a bid to ensure compliance with the law, the House of Representatives yesterday ordered stoppage of the payment of the severance pay package to the Chairman of the Nigerian Electricity Regulatory Commission (NERC), Sam Amadi and six other outgoing members of the board of the regulatory outfit.

The decision followed the adoption of a motion initiated by Alhaji Muhammed Garba Gololo (APC, Gamawa, Bauchi) during the House plenary session presided by the Speaker, Yakubu Dogara.

The lawmakers directed the Mr. Daniel Asuqou led committee on power to liase with the presidency to ensure stoppage of the payment pending the outcome of an investigation into the issue and report back to the House within two weeks.

Gololo, while moving the motion, claimed that arrangement had been concluded to pay Amadi a whooping sum of N400 million, and N380 million to each of the six other outgoing members of the electricty regulatory outfit the severance package.

He however maintained that the approval of the payment of the severance package by the members and for the members of the board of the regulatory outfit not only run contrary with the recommendations of the national salaries, incomes and wages commission but violates the provision of section 42 (1) (a) and (b) of the electric power sector reform Act.

The lawmaker further argued that he was convinced that members of the board are not entitled to the payment of upfront salaries of two years since section 36 (2) of the electric power sector reform Act does not bar them in any way from working in non-power sectors during the two years period.

Asserting that the money was intended to cover among other things upfront salaries of two years for each member of the board pursuant to section 36 (2) of the electric power sector reform Act which bars a member of the board from working in the power sector for a period of two years after leaving office, he insisted that the planned payment is unlawful and unconstitutional since it was not authorised by the national Assembly in the 2015 Appropriation Act.

Before the issue received the endorsement of the lawmakers via a voice vote, Gololo noted: “In fact, the budget of the commission in the said Act is N42.290.077 (forty two million, two hundred and ninety thousand, and seventy seven naira) as capital expenditure. I am convinced that the commission has no recurrent expenditure in the 2015 budget and staff or pays salaries from funds that have not been paid into the consolidated revenue fund of the federation in contravention of the constitution;

“I am confident that everything considered, the payment of the severance package is indefensible as it lacks transparency and flies in the face of dwindling resources accruing to the nation, in the face of the duty of the leaders of public institutions to manage public funds judiciously and in the face of the constitutional powers of the national assembly to authorise withdrawals from the public funds of the federation.”

Meanwhile, there was quiet in the Presidency and the sector over the reported N2.7 billion package.

A national daily (not The Guardian) had reported that the commissioners whose tenures expires next month had allegedly approved the sum as severance package for themselves.

The report had created some tension in the Presidency, with stakeholders discussing the issue in hushed tones. The Guardian learnt that on reading the report, the Presidency had immediately demanded an explanation from NERC management over the issue.

But on Tuesday, the Chairman of NERC, Dr. Sam Amadi issued a release, refuting the media report, describing it as mischievous and intended to tarnish the commission’s ‘hard earned’ integrity, positing that it was an attempt to destroy electricity regulation in Nigeria.

Describing the story as false, he explained that there was indeed N2billion deposited into a special fund for all employees of the commission, including staff and commissioners.

He said: “The commissioners have not approved N400million and N380million for the chairman and the commissioners as falsely claimed. No commissioner has been paid from the severance scheme. But 11 staff that have either exited, retired or are deceased have been paid from the severance scheme. These members of staff were paid on the same computations established by the former commissioners and the administrator for all employees of NERC. The present commissioners did not approve any amount as severance for themselves.

“The original severance for commissioners was approved by the pioneer commissioners. Subsequent changes in the components of the severance came about because of additional benefits, which were included by the administrator in NERC’s staff handbook approved before the present commissioners were inaugurated in December 2010. These additional benefits apply to all staff.

“Subsequent changes in the components of the severance came about because of additional benefits which were included by the administrator in NERC’s staff handbook approved before the present commissioners were inaugurated in December 2010. These additional benefits apply to all staff.”

Amadi said the allegations of severance package for NERC commissioners were false on all material facts.
He said: “It leaves one with the impression that it is a strategic attempt to destroy the reputation of the commission as a transparent, accountable and effective regulator that has, since 2005, been nurturing the emergence of a competitive and efficient electricity market and has won acclaim as the most transparent regulator in Africa.

“The report falsely claims that NERC commissioners have approved to pay themselves N2.7 billion as severance benefits and gratuity before the end of their tenure, to be shared at a ratio of N400million for the chairman and N380million for other commissioners. The report falsely claims that the commissioners are not entitled to payment for two years debarment from any professional or consultancy work in the power sector; and that the pioneer commissioners were not paid for foregoing two years of work in the electricity sector after the end of their tenure. The report also falsely states that the commissioners are in a hurry to pay the fictitious sum to one of the commissioners who has retired.

“It is important to refute these falsehoods because of the damage they can do to the prospect of the ongoing power sector reform. We recall that it was the propagation of similar falsehood against the pioneer Commissioners towards the end of their tenure that led to their unlawful and unfortunate removal from office and stalled the reform until the government acknowledged its error, compensated the Commissioners for the wrong done to them and re-established the commission.”

“The severance scheme was established by the pioneer commissioners in 2006 in line with the provisions of the Electric Power Sector Reform Act for the commissioners alone. The present commission enlarged the scope of the severance scheme to include all staff in line with the Pension Act.

“The pioneer commissioners established the severance scheme with a deposit of five hundred million naira (N500, 000,000). The present commissioners increased the fund to N2billion following the report of an actuary who recommended that amount to fully cover the obligations of the commission to all its staff and commissioners.

“In further pursuance of due process and the commission’s commitment to the highest level of transparency and accountability, the commission established a board of trustees made up of representatives of all categories of staff, including junior and senior management, to manage the severance scheme and guard against encroachment and abuse. Neither the chairman nor the vice chairman is a member. The commissioners are represented on the board by the commissioner for Finance and Management Services. The trustees have the power to elect their own chairman in order to make it independent of the commission.

He stressed that the computation of severance benefits is consistent with the Commission’s Handbook, Resolutions and Pension Act and the percentages are also in tandem with general practice in other Ministries, Departments and Agencies (MDAs).

He explained further: “The present set of commissioners was appointed and inaugurated on December 22, 2010. At the time of assuming office, the issues of salaries and allowances and severance package of the suspended commissioners as well as staff of the commission had already been determined. Remuneration for the commissioners (including severance package) had received the requisite input from the National Salaries, Incomes and Wages Commission (NSIWC) as required under S. 42 (2) of the Electric Power Sector Reform Act 2005 and affirmed by the Attorney General of the Federation and Minister for Justice as the basis for settling the commissioners out of court.

“Upon assumption of office in December 2010, the current commissioners inherited the remuneration structure established by the pioneer commissioners and which had been modified by the interim administration of the administrator who superintended over the affairs of the commission when there were no commissioners in place. The administrator had introduced some allowances and also implemented the 53 per cent general national wage increase for staff as ordered by the president in 2010.

“However, the current commissioners did not implement the 53 per cent wage increase for themselves even though they could have opted to apply it since they were engaged as full time commissioners under S. 34 (1) of the EPSR Act 2005 with executive management responsibilities. They have also not altered their basic salaries. The commissioners however take all allowances that are applicable to staff as provided for in the Staff Handbook established by the administrator in 2010.

“These are the allowances that have continued to be operational in the commission. The present commissioners have not fixed any special allowances or perks for themselves.