Lack of gas supply stalled generation of 4,541MW from 10 NIPP projects

The non-availability of gas supply to the 10 thermal power plants under the National Independent Power Projects (NIPP) has stalled the generation of 4,541 MW of electricity into the National grid.

The thermal power plants which are to be privatised were owned by the three tiers of government are: 674.57MW in Olorunsogo; 444.60MW in Sapele, Delta state; 454.80MW in Omotosho, Ondo state; 447.25MW in Ihovbor, Edo state; 435.69MW in Geregu, Kogi State; 224.10MW in Gbarain, Bayelsa state; 559.06MW in Calabar; 335.44MW in Egbema in Imo state; 233.91MW in Omoko in River State and 730.66MW in Alaoji in Abia state.

Vincent Akpotaire, acting Director General of Bureau of Public Enterprises (BPE) disclosed this at the opening of the investigation into the alleged non-transparent and fraudulent sale of power assets at the National Assembly complex, Abuja, where some aggrieved bidders including Power Grid of India, accused BPE of disqualifying other bidders and appointing Manitoba under questionable circumstances.

Akpotaire explained that the Bureau used the valuation of Nigerian Electricity Regulatory Commission (NERC) which was 25 percent lower than other valuers for the bidding of the Distribution Companies (DISCOs) to enable the investors recover their investment.

From the total sum of N438.06 billion realised from sales of all the assets of the defunct Power Holding Company of Nigeria (PHCN), N374.86 billion was paid for workers terminal benefits; N53.65 billion paid to Escrowed for PPA while N9.55 billion was approved by National Council on Privatisation (NCP) as cost of transaction, while the sum of N23.39 billion was transferred to Treasury Single Account (TSA).

According to him, Federal Government generated the sum of $1.41 billion  from sales of DISCOs and $1.04 billion from sale of the six Generation Companies (GENCOs) totalling N384.20 billion at N157/$1 as at 2013 when the transaction was carried out.

Total sum of N56.88 billion was generated from Egbin, N7.55 billion from Olorunsogo, N12.82 billion from Omotosho totalling N77.25 billion. While giving breakdown of the privatisation of generation, distribution and transmission of the unbundle PHCN assets, Akpotarie disclosed that Nigeria requires sum of $12 billion to generate 180,000MWs between now and 2030 for the country to break out of the circle of power poverty.

According to him, between 2012 to 2014, the sum of $5 billion was spent on self power generation which could have added 5,000MWs to the country’s power requirement, adding that 45 percent of Nigerians currently have access to power while about 100 million people are in darkness, compared with North Africa with accessibility of 99 percent and 85 percent South Africa.

Speaking on the engagement of Manitoba as management contractor for Transmission Company of Nigeria (TCN), the BPE helmsman disclosed that “the financial proposal of MHI was opened publicly after obtaining NCP approval of the technical evaluation result which showed that total remuneration for the first year before tax was $23.605 million. The proposed fees for the 3rd and 4th years were $5.857 million each.

He however declined to disclose the amount paid to Manitoba over the four years of managing TCN, stressing that MHI was able to reduce transmission losses from 12 percent to 6.45 percent thereby saving 5.5 percent, by scaling up the operation capacity of the company.

“Given that the annual commercial value of one percent of the power wheeled by TCN Plc amounts to about N5 billion, a saving of 5.5 percent provides the industry opportunity to earn an additional income of N27 billion per annum.

Akpotaire added that the Afam power plant which was generating 100MW has totally shut down due to inability of NNPC to guarantee gas supply to the plant managed by Televaras which won the contract bid at the sum of $65 million.

Following the inability of Federal Government to meet its obligation, Presidency has approved the refund of $65 million paid by Televaras, according to Akpotaire. He explained that in case of MHI, the tax component was estimated at $5,859,230 and added to base fee bringing the total contract sum to $29,261,744.

While giving the position of Power Grid of India, Iseoluwa Johnson, argued that the entire process leading to the appointment of Manitoba was not transparent, adding that the multi-million dollars paid to Manitoba from Government’s coffer was a breach to the provisions of the Public Procurement Act.

He disclosed that Power Grid of India won the bid for the management of 51 percent of the entire power supply in India as well as 100 percent of electricity in Ethiopia till date, hence queried the rationale behind the disqualification of the company from the concession of TCN in 2012.

Johnson who called for the intervention of the House, noted that inquiry for the certified copy of the certificate of ‘No Objection’ was not obtained from Bureau of Public Procurement before the payment were made to Manitoba.