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News & Press Releases

Tackling Power Crisis Must Go Beyond Public Hearing

THE PUNCH, Thursday, March 27, 2008

A fortnight ago, the House of Representatives' Committee on Power held a week-long public hearing on Nigeria's power crises.

The hearing followed President Umaru Musa Yar'Adua's revelation that over $10bn had been put into the power sector in the last eight years, with hardly any electricity to show for it.

Indeed, the power sector appears to be bugged down by an endemic crisis the solution of which had eluded successive governments.

All the aspects of power are enmeshed in the crisis, including generation, transmission and distribution, and no amount of efforts put into one area had resulted into appreciable value except the other two were given equal amount of attention.

The former President Olusegun Obasanjo's administration set out with a generation target of 10,000 megawatts. But by the time his tenure expired in May 2007, Nigeria had lesser power output that when he took over office in 1999.

Without a doubt, many power plants came on stream, including Agip's Okpai 480MW plant in Delta State; Rivers State's Omoku 250MW; Lagos State EAS, 150MW; Delta, 150MW; Geregu, 414MW; Omotosho, 335MW; and Papalanto, 335MW.

Although all of these plants were inaugurated and switched on, but for reasons bothering on transmission hiccups and connection to the National Grid as well as inadequate supply of gas, which followed the blow up of the Escravos Gas Pipeline by militants in the Niger Delta, some of the power generated from these plants could not be evacuated.

All these factors fired the curiosity of the House, which set out to discover what became of the $10bn, which later increased to $16bn, following the Speakers own revelations.

In the course of the hearing, the public was not sure of how much was actually being investigated - $10bn or $16bn or the $13bn discovered by the Ndudi Elumelu-led committee.

At a point, it appeared Nigerians were more interested in the drama of who got the money, than what the money was meant for, because it is not yet clear what actions (if any) the House intends to pursue on conclusion of the hearing.

In retrospect, it is sad that no agency of government, right from the Ministry of Energy (Power), down to the Power Holding Company of Nigeria; the Niger Delta National Integrated Power Plant or even the House Committee cared to visit the sites and locations of the various power projects for which quantum sums of money were approved.

While Nigerians were enraged by the discovery that the contracts awarded for some of the capital intensive power projects ended on the paper on which the contractual agreements were signed, no care was given to those who actually worked.

Or how can one explain the fact that some 125 containers of electrical components meant for IPPs in Rivers, Bayelsa, Abia and Imo states have been trapped at the Onne Port, Rivers State for two years, of the fact that over 20 gas turbines and generators, even after clearing cannot be moved out of the same port for the same length of time due to agencies' bureaucracies.

The importer of the equipment, Rockson Engineering Company Limited, contractors for the construction of a number of IPPs under the NIPP programme had written countless times to the respective government agencies including the ministries of Energy, Transport, Works, the Central Bank of Nigeria, PHCN and NIPP to no avail.

Under the plans, the turbines and generators and the supporting components would have been installed in their respective locations.  The equipments are for the Alaoji 1074MW Combined Cycle power plant, Abia State; Gbarain/Ubie 252MW Simple Cycle Power Plant, Bayelsa State; Egbema 378MW plant in Imo State 252MW plant and the new Omoku 252MW plant, Rivers State.

The trapped electrical components are also for the construction of the 330kV double circuit lines of 195 kilometers  and substations to connect Rivers, Abia, Anambra and Imo states as well as the construction of 132kV circuit of 207km and seven substations from Ndoni to Kaa for the Rivers State Government.

What the House should do especially in view of the revelations made during the hearing, both real and fictional, is to ascertain the level of work activities, if any, on the entire project sits round the country.

In addition, apart from the office bureaucracies, the House should also determine the level of inter-agency rivalry between the PHCN and the NIPP that had stalled the execution of most of the projects.

There is the aspect of favoritism of foreign contractors in the award of contracts, and what appears to be a deliberate frustration of local contractors from participating against the Federal Government's local content drive.

There is also the need to watch the political undertones that had stalled the completion of some of the power projects, in terms of who failed to do what. 

Finally, the House in order to strengthen public confidence, should investigate how much has actually been paid to contractors and who owes what.  Those who have not performed should be made to pay accordingly, based on on the level and quality  of work done; while appropriate sanctions should be prescribed for contractors who not only failed to deliver, but also those who delivered poor quality projects that would not stand the test of time.

Already, the public hearing has fired a number of antecedents which would impact negatively on the projects if allowed to continue.  For instance, the host communities, in view of the amount of monies being mentioned during the hearing, are demanding for increase in compensations, so also are the workers on site.

Also, electrical equipment manufacturers mainly United States' General Electric and South Korea's Hyundai are refusing to honour placement orders with letters of credit not backed by cash.

While some contractors like Rockson Engineering, based on its belief in Nigerian project has continued to work in all the sites in spite of the huge sums owed it, some others, especially the foreign ones have either abandoned the sites due to lack of funds or declared force majeure due to the kidnappings and instability in the Niger Delta.

The truth of the matter is that the Federal Government should not lose sight of the fact that it risks being sued for breach of contract due to the inaction of its respective agencies.

As suggested by the Managing Director, Rockson Engineering, Mr. Joseph-Arumemi-Johnson, the government should set up a task force, apart from the Budget Monitoring Unit to monitor its projects nationwide.

Also, the issue of gas supply must be adequately tackled, because even if all the IPPs are delivered as scheduled, the source of gas remains a big challenge.

The Nigerian Gas Company is supposed to supply gas to the plants, up till now, the company has not started the construction of gas pipelines to these power plants.

If Nigerians must have access to sustainable supply of power, all these issues must be put into their proper perspectives.