My Nigeria…

THE National Economic Council (NEC) has approved the sum of N323,158,286,574.50 kobo for the completion of the National Integrated Power Projects (NIPP) being executed by the federal and state governments.

This amount is expected to be released as work progresses on the power projects, designed to deliver, at utmost capacity, 3,037.5 Mega Watts (MW) of electricity to boost the existing facilities by September 2010.

These and strategies for the realisation of the national power project objective are part of submissions contained in the Governor Gabriel Suswam Steering Committee report, which was presented and approved by NEC during its meeting held in Abuja last week.

The report of the committee, a copy of which was obtained by The Guardian, noted that the only way out of the power logjam the country is faced with is to complete all existing NIPP projects at various stages of construction and completion.

The report noted: “The work plan and implementation schedule for capacity addition of 337.5MW by December 2009 and cumulative of 3,037.5MW by September 2010 through the NIPP, as well as a corresponding budget of N323,158,286,574.50 have been approved by the Council to enable immediate commencement of the projects with assurance of quick and total completion.”

The Council also considered and approved:

• the remobilisation of the project consultancy contract for the NIPP priority projects; 

• provision of ramp at the Imo River to facilitate the delivery of heavy lift items to the Alaoji plant site; and 

• funding of the letter of credit for the combined cycle component of the project to facilitate the release of imported consignments currently stored at Onne port in Rivers State.This development is coming just as the House of Representatives is set to debate the controversial report of the ad-hoc power committee led by Mr. Godwin Ndudi Elumelu before the end of this week.

  Suswam’s report said for this project to be realised, there are 13 project delivery teams to drive.

  “Each team shall be headed by a manager, who shall have a full complement of personnel and experts necessary for completion and delivery of functional power plants.

  “The project teams, rather than focus on different aspects of the NIPP as obtained in the past arrangement, shall be responsible for all the aspects involved in the delivery of a fundamental power plant from gas pipelines to distribution of electricity generated.”

  According to the submissions, in order to kick-start the resumption of work on the NIPP projects based on the new project delivery concept, the projects are being prioritised and new timelines for completion are adopted.

  The report noted that Council is aware that the target of 6,000MW by December 2009 and 10,000MW by the end of 2011 could only be achieved through power generation mix of Power Holding Company of Nigeria (PHCN) plants, NIPP and IPPs.

  It thereby demands an aggressive approach, which will entail strengthening of the existing facilities, expansion and reinforcement of the transmission lines, implementation of national gas master plant that will ensure gas to power, and completion of the ongoing projects to achieve the set target.

  On the funding update, the committee reported that as at 2007, total project allocation was estimated at $10.231 billion, including $2 billion Federal Government counterpart fund for the Mambilla Hydro Power project and $1.4 billion for additional nine turbines.

  “Out of these commitments, only $3.08 billion was funded and securitised with advanced payment guarantee from first class Nigerian banks and letters of credits (LC) issued by the Central Bank of Nigeria (CBN). Of the LCs, over $1.5 billion is still in the custody of the corresponding banks to date.”

  It noted that there was an ongoing comprehensive review to determine the most up-to-date estimates of costs to complete the projects.

  The report stated: “This is in view of cost overruns arising from over 18 months of delay and stall in funding.”

  Apart from the 18-month delay, the Suswam committee identified other issues, which have brought the projects to stand still.

  They include, among others, lack of thorough feasibility studies that resulted in several challenges in terms of transportation, water supply and transmission connections to sites, cumbersome payment procedure, and lack of required manpower due to non-release of fund for the project supervision.

  The report also stated that some of the studies, which had guided it in this renewed effort to ensure that the project was realised, include:

   

• the report of the Energy Council set up by the President; 

• report of the special private sector committee; 

• General Electric (GE) audit report on the state of the equipment at the ports and the power sector; 

• lessons from the House of Representatives probe panel report; 

• and input from the power sector crisis committee, among others.The committee listed nine power stations that would deliver a total of 3,150MW to the national grid system by December 2010.These are: Sapele (225MW), Olo’sogo (112.5MW), Ihovbor (225MW), Alaoji, (1,074MW combined cycle), Calabar (225MW), Egbema (112.5MW), Gbarain (225.5MW) and Omoku (112.5MW).

  All are the projects are expected to be completed under the timeline approved by the Council chaired by Vice President Good Luck Jonathan. In all 3,150MW will come from this investment by December 2010, the report projected.

  The scope of the NIPP projects, according to the report, includes over 270 contracts for generation, transmission and distribution facilities, over 600 project sites, over 3,000 invoices to be processed within the life of the projects and over 20,000 shipments to be received.

  Details of these include 10,000 tons of materials for power station equipment, 10,500 km of transmission cables requied, 67,500 tons of transmission towers materials to be imported, 25,000 distribution transformers required, 15,000 kilometres of distribution conductors and over 200 kilometres of gas pipeline materials.

  Meanwhile, the Vice President on Thursday said that government would release in two weeks funds for the completion of the Alaoji 1,074 Megawatts (MW) combined cycle power plant being handled by Rockson Engineering Company Limited.

  Jonathan made the disclosure during an inspection tour of the Alaoji plant, adding that the plant would generate anticipated power supply by December 2009.

  The Vice President, who also visited the Imo River Bridge, which constitutes part of the hurdle keeping the contractor from moving the turbines to the site, also gave approval for their movement.

  Chief Theodore Orji, the governor of Abia State and his Kaduna, Delta, Gombe states counterparts accompanied him.

  Also in the entourage were the acting governor of Ekiti State, the Minister of Power and the Minister of State for Petroleum Resources.

  The Vice President said: “This projects are being funded by the FG and states. A federal committee has been set up and two other committees and all the 36 governors and the FCT minister are members.

  “But the six governors (here), who are members of that committee, represent them.

  “We meet regularly to make sure that for this NIPP project that the FG and the states have combined and voted about $5.3bn must not be a wasted fund.”

  He stated that for the contractors to be paid, “we must be sure of what the contractor is doing. You see the governors trekking across the whole site; many of them their clothes are completely wet.

  “This is because we don’t just want to come around and go. We want to be sure that we are spending the money that belongs to the people on something that will produce something useful for the people. We don’t want to put money down and at the end of the day we have stories,” he said.

  The contractor, Rockson, had submitted a quote to the Ministry of Power, demanding variation in the contract to cover improvements on the Imo River Bridge to facilitate the movement of the turbines from the Onne port.

  Rockson Engineering had, at the height of the delay, explained that improvement of roads and bridges was not covered by the existing contract with the government.

  Earlier, Chief Arumemi Ikide, the managing director of the company, disclosed that phases one and two of the Alaoji 1,074MW power plant was between 60 and 70 per cent completed.

  He added that power could be generated from the plant about nine months after the turbines were installed.

  He thanked the media for being steadfast in their reportage of the facts and urged government to encourage local engineering companies to give teeth to the local content policy.

   

  Guardian