House of Reps reject President’s request for N26b virement in 2010 budget

[TGD]

A FRESH presidential request for the amendment of the 2010 budget to allow for the virement of some allocations in the Ministries of Power and Aviation to the tune of N25.8 billion has been rejected by the House of Representatives.

The President in a letter addressed to Speaker of the House of Representatives, Dimeji Bankole and read to members, said the virement became necessary "in order to augment the shortfall in the completion of rehabilitation and repair of power plants, as well as identified shortfalls in some key parastatals in the aviation sector."

He said the sum of N1.496 billion would be vired to take care of projects in the power sector, N1.813 billion for the Nigeria Airspace Management Agency (NAMA), and N22.38 billion for the Federal Airports Authority of Nigeria (FAAN) while N112 million would go to the Accident and Investigation Bureau.

The President's letter read: "You may recall that I had earlier forwarded virement requests in respect of the Power Sector Reform and Defence. In order to augment the shortfalls in the completion of rehabilitation and repair of power plants as well as identified shortfalls in some key parastatals in the aviation sector, I hereby forward the attached additional virement proposal. It is my hope that the National Assembly will kindly consider and approve this request in your usual expeditious manner."

But shortly after it was read, lawmakers expressed dismay over the request.Chairman of the House Committee on Appropriation, Ayo Adeseun, said the proposed virement was ill timed, pointing out there were barely 22 days to the March 31, 2011 expiration of the budget.

He suggested that the President should rollover such projects to the 2011 budget.On the 2011 budget, Adeseun hinted that the committee planned to get it passed tomorrow.

He disclosed that the Presidency had sent a series of amendments to the original 2011 Budget Bill to the tune of N200 billion.

The lawmaker however lamented that the 31 corporations and agencies that were supposed to submit their budgets to the National Assembly were yet to do so.

He listed the agencies as including the Nigerian National Petroleum Corporation (NNPC), the Central Bank of Nigeria (CBN), and the Nigerian Ports Authority (NPA). Adeseun said they were required by section 21 of the Fiscal Responsibility Act to lay the estimates before the National Assembly for appropriation.

Meanwhile, some lawmkers have accused the NNPC of diverting attention from the real issues delaying the passage of the Petroleum Industry Bill (PIB) before both houses of the National Assembly.

According to the Chairman of the Committee on Gas Resources,  Igo Aguma, NNPC had provided over 30 different versions of the PIB through amendments, and was still delaying further works on the bill by proposing another adjustment, which was yet to be forwarded to the National Assembly.

Bankole ended the  argument by directing that while the House awaited the latest amendment being proposed by the NNPC on the PIB, the committee should continue its work on the budget in accordance with the Fiscal Responsibility Act and the Constitution of the country.

The Senate, which has resolved to pass the PIB next week, yesterday removed the military and intelligence services from the new pension scheme.

The Senate adopted the report of its Committee on Petroleum (Upstream and Downstream) recommending new fiscal regime in the oil sector.

In the report presented yesterday by the Chairman of the Committee on Petroleum (Upstream), Lee Maeba, the panel recommended, among others, that upstream companies pay rates, which will increase government's take in the sector.

"The bill provides a new fiscal regime for the upstream companies. The new fiscal regime is designed to increase government's take, reduce cost of operations while also ensuring that the industry continues to attract investments by our traditional partners and new ones. Under the new regime, upstream companies will be required to pay the following revenues to government: rent for licenses and leases, royalties, national hydrocarbon tax, company income tax, education tax, NNDC contribution and petroleum producing host community fund,'' the report stated.

The committee also recommended an upstream sector that comprises the following features: That the present JV be sustained but the new NNPC Limited to be established should be able to take operational control of any of the joint venture operations it deems fit while the committee recommended an improved funding arrangement for JV operations using the instrumentality of the regulations that will address government's inability to fund cash calls.

The committee further recommended a new grid system for demarcation of oil blocks  whereby old blocks that have not been developed over a long period of time after award would be redesigned to ensure availability of new blocks for bidding, award and development.

On renewal and relinquishment of leases, the panel recommended a regime in which the duration of the petroleum mining licences will be reduced and renewal processes modified to ensure that blocks that are awarded are quickly developed and not left idle by companies.

The panel endorsed complete deregulation of the downstream sector to allow operators buy and sell their products in a competitive market environment so that the Petroleum Equalisation Fund can be abolished.

The report was endorsed by the Senate. However, the bill could not be considered clause by clause because some senators said that they should be given a few days to go through it.

Also, yesterday, a Bill for an Act to Amend the Pension Reform Act No.2 of 2004 to exclude the members of the Armed Forces and Intelligence/Secret Services of the Federation from the Application of the scheme and for related matters 2010 was passed.

The senate agreed with the submission of the Senate Leader Teslim Folarin that the exclusion became necessary to eliminate delay in the entitlements of retired service personnel, disparity in the lump sum paid to personnel of the same rank.

Source: Reps reject President's request for N26b virement in 2010 budget