We discounted N38bn FG refunds based on experts’ advice –Bayelsa Govt

The Bayelsa Government says the discounted N27 billion refunds for Federal projects it received, instead of N38 billion, had been ploughed into infrastructure projects across the state.

Gov. Douye Diri of Bayelsa said this on Saturday in a broadcast to commemorate the 2021 Democracy day in Yenagoa.

In the broadcast monitored by the News Agency of Nigeria (NAN), Diri explained that the N38 billion due to the state were ‘promissory notes’ rather than cash, which the government redeemed based on experts’ advice.

The explanation came amidst concerns that the difference between N38 billion and N27 billion, amounting to about N11 billion, shortchanged the state in the ‘discount deal’.

Promissory notes and bonds are debt instruments in which one party promises in writing, to pay a determinate sum of money to the other, either at a fixed or determinable future, under specific terms and redeemable before maturity at a discount.

NAN recalls that on Nov. 24, 2020, the Senate approved promissory notes and bonds worth N148.1 billion as refunds to Bayelsa, Rivers, Cross River, Osun and Ondo State, for executing Federal projects.

A breakdown of the refunds showed that Bayelsa got N38.4 billion, Cross River N18.4 billion, Ondo State N7.8 billion, Osun N4.5 billion and Rivers N78.9 billion.

Diri further clarified that the state government entered into the discount deal based on due diligence, after consulting economic experts who advised that for the state to get the full value of the debt, it had to wait for the four year maturity period of the instrument or discount it at market rates.

“The governors of the benefiting states met and it was obvious that it made sense to accept the discount option because, some second term governors cannot have access to the money before leaving office.

“Also, given the unpredictable inflation and foreign exchange rates, it made sense to go for the discount option and I want to assure the people of Bayelsa that the decision was taken in the interest of the public.

“We got that money sometime in December 2020 and deployed it to work on the Yenagoa-Oporoma road which will connect the headquarters of Southern Ijaw Local Government Area by road, work is advancing at an impressive pace.

“The Glory Land Drive road, the AIT-Igbogene, Sagbama-Ekeremor road and so many projects that the previous administration could not complete are receiving attention and the people are free to go and see what we are doing with the refunds,”Diri said.

On the commencement of scheduled commercial flights to the recently licenced Bayelsa Airport, the governor said that plans had been concluded with United Nigeria Airlines, to begin flight operations to and from Bayelsa as from July.

He said that the state also held talks with Ibom Air and the airline requested for guarantees that the state government would indemnify it for empty seats, until passenger traffic grew, but that the aircraft had a capacity for 90 passengers.

Diri said that as a prudent administration, considering the cost of empty seats in a 90-passenger capacity aircraft, the government opted for United Nigeria Airline with smaller planes of 50 passenger-capacity.

“Our earlier plan was to start with Ibom Air and we opened discussions with my brother, the Governor of Akwa Ibom, Mr Udom Emmanuel, during our recent retreat in Uyo and he agreed. We immediately set up a committee.

“The committee found that we need to defray the cost of unoccupied seats as a new airport and we found the cost too high for the capacity of aircraft operated by Ibom Air, so we had to look for airlines that operate smaller capacity aircraft.

“I can confidently say the scheduled flights will start at our airport in July, arrangements have been concluded following the presentation of certification documents for daytime flight operations by the Nigerian Civil Aviation Authority.

“The reason for the clause for daylight is because the runway lights for night operations are yet to be installed as at the time they inspected, but as soon as the lights are installed the airport can handle night operations as well,” Diri said. (NAN)