THE INSIDER: BPE sinks deeper into scandals with N27bn ‘phantom’ insurance payments

The Bureau for Public Enterprises (BPE) is sinking deeper into scandals over the privatisation of the power sector — with a series of questionable deals now coming under the spotlight.

Investigations by TheCable have uncovered retrospective payments of insurance premiums totalling N27 billion for “cover” not provided to the defunct Power Holding Company of Nigeria (PHCN).

In insurance parlance of “no premium, no cover”, there can be no insurance cover if premium is not paid ab initio, but the BPE and the ministry of power may have succeeded in developing a new practice in which premium is paid years after cover is provided.

Most recently, BPE has had to explain the alleged shady deals involved in payments of over N1 billion to consultants, including the office of the accountant-general of the federation, over the PHCN privatisation.


The bureau was also accused of colluding to refund N29.2 billion to Integrated Energy Distribution and Marketing Company (IEDM) in a share buy-back deal over the Yola Electricity Distribution Company which IEDM acquired in 2014.

Sources at the ministry of  power told TheCable that the N27 billion premium payments were made for covers not provided but memos were initiated and secretly executed.

The premiums were ostensibly made to insurance firms thought to be fronting for powerful figures in the ministry and at BPE.


Eventually, the money was shared among senior government officials, with some getting as much as N1 billion in the dying days of the last administration, insiders told TheCable.

Engineered memos

A director at the ministry said: “Cover starts the day premium is made. How can you make payment for cover that was not provided? How can you ask for premiums to be paid when PHCN has already been liquidated? The conspirators engineered memos to their principals which were quickly approved and monies disbursed.

“The secrecy that accompanied the development shows that the individuals involved know that when it comes to the open, it will be greeted with outrage. I doubt if the regulators in the power and insurance industries, the Nigeria Electricity Regulatory Commission (NERC) and National Insurance Commission (NAICOM), diligently looked into these transactions which have ethical and criminal dimensions.”


TheCable could not ascertain the names of the beneficiary insurance firms involved in the deal because of the highly secretive nature of the transaction.

All documents, TheCable understands, are being kept under “lock and key” following increasing public scrutiny over the power privatisation process.

BPE officials have kept mum over this development, with the director-general, Benjamin Dikki (pictured), failing to reply two text messages sent to his phone.

Consultancy services


It emerged only recently that the BPE, which serves as the secretariat of the National Council on Privatisation (NCP), awarded contracts of N929.6 million to J. K. Gadzama & Co and another N500 million to the office of the accountant-general for consultancy relating to the winding up of PHCN.

Not only have questions been raised over due process, there are also issues over payments to a government agency by another government agency for “services rendered”.


BPE, in a rebuttal by its head of corporate communications, Alex Okoh, said the payments were made after the statutory certificates of “no objection” were issued by the Bureau for Public Procurement (BPP).

But BPP has denied issuing the certificates.


In a statement by its spokesman, Thomas Odemwingie, on Wednesday, the BPP said as at December 2014, it refused to grant a “No Objection” certificate for the engagement of a legal firm for the PHCN liquidation.

Odemwingie said: “On the advice of the Honourable Attorney General of the Federation the BPP had earlier on September 22nd 2014, rejected the request for the issuance of certificate of “No Objection” to contract award. The BPP Certificate Ref. BPP/S13/VOLVIII/190 dated 2nd September 2013, referred to by the BPE in favour of the legal firm was withdrawn and cancelled.


“Even when HAGF replied that we may consider revisiting our position and re-issue/revalidate our certificate, BPP by letter referred to in paragraph 2 above declined the request and approved only the engagement of Messrs. Ora Egbunike & Associates for the asset valuation services in the sum of N517,694,100. This approval for the engagement of Messrs Ora Egbunike and Associates was subsequently approved by the Federal Executive Council.  There was no approval, to our knowledge, by either the President or Federal Executive Council for the engagement of the legal services.

“It may interest the general public to note that section 16(4) of the Public Procurement Act provides that any contract purported to be awarded without a certificate of “No Objection” to contract award duly issued by the Bureau shall be null and void.

“So we do not understand the basis for the award of the contract to the legal firm as claimed by the BPE.”

Stranded ex-workers

BPE generated over N400 billion from the privatisation of PHCN successor companies which saw the core investors take them over in November 2013.

This huge revenue may have fuelled the alleged scandals the bureau is now enmeshed in.

While BPE is yet to pay severance benefits to over 1,000 out of 49,000 workers of the defunct PHCN almost two years since it was paid by the core investors, the bureau has paid over N3 billion as cheque off to the National Union of Electricity Employees (NUEE) and the Senior Staff Association of Electricity and Allied Companies (SSAEC) the two unions representing the former electricity workers.

“Even for workers that are yet to be paid their benefits, their cheque off has been paid to NUEE and SSAEC as far back as 2013,” a source in the know told TheCable.

BPE sources said the bureau has cash-backed the severance benefits of verified workers and their money is with the office of the accountant-general, but the payments have not been made.

The affected ex-workers recently embarked on a peaceful protest in Abuja.

  1. Your comment..if buhari is serious about fighting corruption this is the time for him to act,fighting corruption shouldn’t be about rhetoric alone but concrete head on action that would stop the madness going on in public service.last time it was cbn official now BPE may GOD help this nation

  2. Good one. pls investigate the Nigeria police insurance premiums for 2015. payment has not been made since December 2014

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