Free Electricity Ruffling Feathers in Liberia’s Nimba County
Monrovia – Scandal appears to have engulfed an earnest effort by the Economic Community of West African States (ECOWAS) to electrify rural Liberia.
Report by Rodney D. Sieh, [email protected]
Liberia’s energy sector as accountability issues dog cross border electrification; debts to Ivory Coast piling up
A FrontPageAfrica’s investigation has found that the government of Liberia is poised to lose millions of dollars amid allegations of theft and mysterious bank accounts regarding the operations of the Cross -Border Electricity Supply project of ECOWAS from Prollo, Cote d’Ivoire through its specialized organization, West African Power Pool (WAPP).
As part of the project, some eighteen (18) communities in rural Liberia have begun benefiting from electricity for the first time since the end of the civil war.
The Cross-Border Electricity Supply project is divided into three (3) lots for the supply and installation works. Lot 1, Maryland County, Lot 2, Nimba County and Lot 3, Grand Gedeh County.
But an FPA’s investigation has found that a number of accountability and transparency issues is complicating Liberia’s ability to fulfil its end of the bargain.
Red Flag I: Bank Statements Raise Eyebrows
FrontPage Africa recently got wind of the unfolding developments after obtaining several communications including bank statements relating to alarms raised over questions of accountability relating to multiple accounts opened for the project by the Ministry of Lands, Mines and Energy, without the knowledge of the Liberia Electricity Corporation.
At various government ministries in Liberia including MLME, the Ministers, all deputies and the controllers are signatories to all accounts relating to the Ministries. But some are beginning to raise questions as to why Minister Patrick Sendolo did not include the Deputy Ministers for Planning and Administration and the controller at MLME on the accounts which, according to documents in possession of FrontPageAfrica, were opened at the Liberia Bank for Development and Investment and Ecobank.
FrontPageAfrica has learned that the MLME reportedly misinformed the President’s office and the LEC management regarding reports that residents in Nimba were getting free electricity because the project lacked a management structure.
As a result, information on payments being made by customers in the Nimba did not exist resulting in non-payment of the Ivorian debt for the supply of power.
According to the World Bank, only 0.58 per cent of the Liberians have access to public electricity.
Those who have access to the Liberian capital’s electrical grid pay $0.49 per kilowatt-hour (kWh), likely the highest rate in sub-Saharan Africa. This was only recently reduced from $0.54 per kilowatt hour. The majority of businesses and some private homes run on diesel generators that carry a price of $3.96/kWh.
The country’s energy sector was devastated by 14 years of civil conflict that only ended in 2003. Warlords deliberately targeted electrical infrastructure.
In the past few weeks, the Sirleaf administration has been making some headway in repairing the Mount Coffee Hydro Plant which was destroyed during the civil war. The plant is said to be 71 percent completed, according to engineers who informed the President when she visited the site this week.
FrontPageAfrica has learned that the alarm was first raised by Mr. Peter Graham, Expatriate Chief Executive Officer of the Liberia Electricity Corporation(LEC) who expressed concerns that contrary to what he and others at the LEC had been told about the bank accounts for the WAPP being in the MLME, there were at least three accounts, a US dollar and a Liberian dollar account at LBDI and a third account at EcoBank.
“They are not LEC accounts but LEC Cross Boarder Project(WAPP) – the signatories are also Mr. Joseph T. Mayah, Deputy Managing Director of the Liberia Electricity Corporation(LEC); Sam Russ, a Deputy at MLME and the Minister(MLME).”
The three men controlled the accounts without the Knowledge of other officials in MLME and the board of LEC.
Red Flag II: ‘Bookeeper’ Managing Account
Graham explained that the LEC’s Financial Comptroller was also signatory but is no longer with the LEC and has not been replaced as a signatory.
“The accounts are managed by a “Bookeeper” who is a contractor with a desk in the LEC Financial Department but is paid from the Cross Border Account.”
In addition, the communication in possession of FrontPageAfrica notes, there is an IT contractor based on Bushrod Island offices who updates the customer records, inputs meter readings, prints bills etc. “Again paid from the Cross Border Account.
Apparently there are contract meter readers in the area who read the meters, the Bookeeper and IT person to collect the readings and ten to deliver the bills. Apparently Thomas Gonkerwon, with Mayah, supervise the whole thing.”
FrontPageAfrica has also learned that Liberia has been delinquent in fulfilling its part of the bargain, a report which was confirmed by Mayah when FPA contacted him this week.
“It is true that we have not met our obligation to the Ivorians,” Mayah acknowledged. The LEC boss explained that obligations to the Ivorians were delayed due to bad roads and the outbreak of the deadly Ebola.
In addition, Mayah added, LEC has been unable to send a team to Nimba to monitor and keep track of the project and guard against theft. “I don’t have a team up there. We keep running the program, we go there we read the meter we come down here and prepare the bill and give it to them to pay and that’s how we have been running the project until today which is an awkward way of doing it.”
“We should have had a permanent team there paid for by the project but we couldn’t get the seed money in the beginning to do that.”
Continued Mayah: “As far as we’re concerned, the agreement we had with the ministry dates back to 2008 when Shannon (Dr. Eugene Shannon) was Minister.
“The Minister said, look, LEC, you are the national electricity company; you manage this project on behalf of this company.
But the arrangement you have here, LEC itself in Monrovia is on a management contract with specific guidelines on how far they can operate as supposed they can only operate in Monrovia, you can’t go out of town. So all of this was discussed and we said we cannot be a national utility company and only operate in Monrovia, you got to operate nationwide”.
It was then Mayah said, Minister Shannon instructed him and the LEC to run the project exclusively of the management contract team.
“So I was charged with the responsibility. So we opened this bank account and all the funds are put there but realizing that we live in a world of accountability, we said we did not want to be the authorizing party to authorize expenditures, we want the ministry to approve every request for payment.”
Regarding the payments to the Ivorians, Mr. Mayah while acknowledging challenges in keeping the books and accountability of the accounts said efforts are being made to make payments.
But keeping accounts of the book is key. “Our finance department maintain separate books, the accounts are kept but what we do is that when the payment is due we write to the Minister of Lands, Mines and Energy or his designate and that person will approve the payment and based on that payment it comes back to our finance department and there are two people in the ministry.
That payment is processed. The ministry has an A and a B signatory; LEC has an A and B signatory to the accounts. The monies are signed off on and that’s how the disbursements are made.”
FrontPage Africa contacted the Ministry of Lands, Mines and Energy on Wednesday, August 17, 2016 and was told both Minister Sendolo and Deputy Minister Russ are A signatories.
The Deputy Ministers for Planning and Administration along with the Controller are all B signatories but none of them was included by Minister Sendolo as signatory to the accounts, raising more questions than answers regarding motives.
Sources tell FrontPageAfrica that the Finance Department and Administration at MLME are not aware of processing payments from the cross border account neither were they informed about the accounts.
But Mr. Mayah explained that payments are made when they are approved by the Ministry of Lands, Mines and Energy.
Who approved of these payments from these accounts at MLME? Why MLME misinformed the President that no money was collected when Minister Sendolo was one of those controlling funds collected from the cross-border electric project?
Audit Looms, Sources Confirm
FrontPageAfrica has learned that as a result of the accountability issues, President Ellen Johnson-Sirleaf requested her Principal Economic Advisor, Mr. Augustine Jarrett, to look into the issue.
Sendolo, in an apparently angry-toned letter to President Sirleaf, accused what he described as “do nothing reactionaries” for making an issue out of nothing.
Said Minister Sendolo:
In accordance with my commitment to you, I hereby present a set of the statements of the bank accounts for the Cross Border Project.
Having reviewed the documents myself, they do not seem to answer the question which has arisen out of an e-mail which, quite tragically, is based on half-truths, outright lies and innuendo.
So, low have its authors stooped that this mischievous e-mail cannot be dignified with a response, even if there is, quite frankly, nothing to respond to.
But, if I may be candid, this is another instance of do-nothing reactionaries who are constantly attacking what others have done, though they cannot show what they have themselves achieved. I am by no means suggesting that people should not be held to account simply because they are trying to achieve results.
Quite to the contrary, I believe that it would be fair for those attacking, criticizing or critiquing the actions of others to be required to put up more in terms evidence that loose-leaf e-mails with little basis in facts or with only selected bits of information.
I feels constrained to put these thoughts in this format because I am convince that recurrence of episodes like the one at hand would have a tendency to sap motivation and lull people into a much undesired reticence and reluctance.
Accounts Should Not Exist, Presidential Advisor Says
But despite the Minister’s explanation, the President’s financial advisor described the issue as a serious matter. “GEMAP sought to strengthen the management and accounting of government revenues.
The effects were far reaching as they led to the present Revenue Code establishment of the LRA and made Supreme the Consolidated GOL account for holding GoL funds managed solely by the Ministry of Finance and Development Planning.
Prior to these changes, GoL funds could be and were indeed held in private in private banks and control was dispersed among MACs.
Today, only the CBL is authorized to hold GoL funds – Even when MFDP allows a line to open any account to sequester the government of Liberia from the consolidated funds. It must be the CBL and not private bank.”
The President’s financial adviser concluded: “On that basis, the three accounts in Ecobank and LBDI which hold the WAPP funds should not exist.”
FrontPageAfrica has meanwhile learned that the LEC Board is proceeding to regularize the Nimba Distribution Assignment Agreement (NDAA) which is now in the hands of the MOJ for legal opinion.
But in a communication to the President, obtained by FrontPageAfrica, Mr. Ian Yahp, Chairman of the board suggested that the President had been misinformed about the management of the network in Nimba.
Yahp Wrote: “The adjunct utility whose accounts and structure have been established outside the purview of the LEC management and its board appears to have been managing the commercial operational and financial aspects of the project, however incompetently, from its outset.
The LEC email suggests that it was not aware if the collections from the project have been applied against the Ivory Coast debt. If this is the case; then clearly there are accountability issues that may need to be addressed.”
This is not the first time Minister Sendolo has made unilateral decisions without consulting other board members.
More than a year ago, the Minister reportedly brought in an expatriate to serve as CEO of LEC with an offered salary of US$35,000 a month without consulting the board of LEC.
The former Justice Minister Benedict Sannoh and chairman of the board wrote a letter of disapproval and President Sirleaf disapproved of the contract to employ the CEO.
Meanwhile, FrontPageAfrica has also learned that the National Investment Commission may have been given false information by the MLME into signing a contract for a company to collect the crossed-border electricity fees.
Electricity was a campaign promise to the Liberian people by Sirleaf in the run up to the 2005 Presidential elections and has been a major challenge for the government who despite the odds have been making some strides in repairing the Mount Coffee Hydro Plant.
Some observers however feared that the rising questions of accountability and mystery bank accounts could dampen those strides even as the Executive Mansion has reportedly ordered that the accounts be audited.
For now, many remain puzzled as to why the Executive Mansion was misinformed over the reports that the residents in Nimba were using the electricity for free especially with the emergence of the latest confirmation that three bank accounts into which the MLME’s special team were collecting money and depositing.
Our investigation continues…