Budget: NBET to rent new office with N487.7m, gulped N600m in 2017
The Nigerian Bulk Electricity Trading Plc (NBET) will spend N487.7 million to relocate to a new office complex by 2018, after it had gulped N600m in 2017, budgetary documents from the Budget Office have shown.
The agency acts as an intermediary between about the Generation Companies (GenCos) and the Distribution Companies (DisCos) by collecting energy bills from the latter and paying the former.
NBET which got N3.7 billion for capital projects in the 2017 Appropriation Act has its budget raised to N22.794bn in the 2018 proposed budget with zero allocation for personnel expenditure.
It has often relied on a certain percentage from the electricity market revenue collection form energy sales to service its personnel and overhead expenses.
The agency is supposed to be a temporary arrangement in the privatised electricity market until such a time when the market is competitive enough that the DisCos can contract the GenCos directly without seeking further guarantee.
From the N22.794bn proposed funding, NBET will pay N487.5m to pay rent for the office complex which it said it is relocating to. It will also pay for partitioning, IT installations, furniture and equipment from the allocation.
The firm had in the 2017 Appropriation pegged N600m for the same ‘relocation to new office complex’ to cover for rent and other similar item as seen in the current proposal.
The Daily Trust analysis indicates that NBET will further spend N17.7bn next year to pay interests on the various facilities it has taken to give guarantee for energy payments to the GenCos.
The first will be the sum of N15bn as the interest on the 2017 to 2018 Payment Assurance Guarantee (PAG) facility it is taking from the Central Bank of Nigeria (CBN). It will also be paying N2.7bn as Eurobond interest repayment next year.
The firm will spend N883m on legal procurements and other consultancy services in the budget year.
The breakdown shows that it will use N305m to procure legal advisers to negotiate key project pacts for gas, coal and solar Independent Power Producers (IPPs). Another N300m will go for general legal advisory and support for litigation, alternative dispute resolution, awards and legal opinions.
NBET will also spend N61m on legal services to support development of guarantees and payment solution for the electricity industry; N60m will go for legal services on revenue requirement filing, the Nigerian Electricity Regulatory Commission (NERC) and other consultations.
Other legal services will be for international power sales and the firm’s regional power engagements at N50m. It will also spend N107m for security trust deed of assignment of bank guarantee for the power sector.
On finance, the agency will spend N150m to acquire accounting, planning and business management software; it pegged N252m for similar item in the 2017 Appropriation Act. NBET is spending another N25m for consultancy services to review and update its finance process manuals and flow charts.
It has also earmarked N15m for financial advisory consultancy services for payment guarantees while pegging N45m for the external audit of the 2017 financial year.
The public firm will also spend another N203.2m to buy motor vehicles for its operations for which it is spending N470.5m in 2017. It will spend N102m to stock its library by 2018 for which it did not in 2017, the details revealed.
NBET yet earmarked N1.6bn for research and development purpose from which it says will be for administration and the coordination of bulk trading activities. The agency also slotted N1.25bn for the administration in 2017.
The agency is also spending N245m for monitoring and evaluation of projects in 2018; it spent N119m for same in 2017.