Nigeria Power Supply Problem: Nationwide Blackout Looms As Contractors Abandon Project

nationwide blackout nigeria

April 13, 2013 – Nigeria Power Supply Problem: Nationwide Blackout Looms As Contractors Abandon Project

When the Presidential Task Force on Power (PTFP) predicted, in its roadmap to achieve power-on-grid target of 7000 mega watts (mw) this year, it may not have taken into account challenges that may arise. Four months into the year, the generation of 4,517mw achieved in December 2012 has crashed to 3, 443mw, with an impending nationwide blackout.

Saturday Sun gathered that besides the steady drop in power generation and distribution from the already attained service delivery milestone in December 2012, the forecast of generating additional 4,000mw into the national grid is now being threatened by many of the contractors handling the National Integrated Power Projects (NIPP), who have allegedly abandoned their sites.

Faced with this scary development, the recently appointed Minister of Power, who was a former Vice Chancellor of the University of Nigeria, Nsukka (UNN), Prof. Chinedu Nebo, has cried out to some highly placed persons in government to report the attitude of the contractors and also seek for their help on how to get them back to work, so as to arrest the ugly trend of worsening power situation across the country.

“Being a relatively new minister in the cabinet, Prof Nebo, who came in with the zeal to make a mark is bitter that the power supply that was getting steady under his predecessor, Barth Nnaji, has suddenly nose-dived while contractors who have been paid billions of dollars and expected to deliver on the projects awarded them have either slowed down work pace or even abandoned the project sites.

Checks revealed that the minister is talking to those he knows are influential in government because he doesn’t want to step on the wrong toes, in his bid to get the contractors to deliver to time. He is equally suspecting that entrenched forces and interests may be at work to sabotage him and the entire power project of the Jonathan administration, a reliable source in the Ministry of Power revealed.

It was further gathered that some of those the minister had taken his battle with the contractors to, include Vice President Namadi Sambo, Secretary to the Government of the Federation (SGF), Senator Anyim Pius Anyim and a number of principal officers in the presidency. Another source in the presidency said: “The minister was here to seek some sort of intervention because he is not sure, who the promoters of some of these contractors are in government so that he would not fall into the same trap with his predecessor but the bottom line is that he is determined to succeed in his given assignment.

Most importantly, he is more worried because many of the contractors concerned had collected virtually all contract sum without commensurate performance which may jeopardize the entire power reform drive.” When asked about the directive issued to the contractors, who had abandoned the NIPP sites, the minister confirmed the development, but denied that he issued the order. In his words: “ Yes, we did but that directive was not issued by me actually. I didn’t.”

He declined to disclose who gave the order or comment on whether the contractors have heeded the order to return to work. Engr. Reynolds Bekinbo Dagogo-Jack, Chairman of the Presidential Task Force on Power (PTFP), had stated in a document: “This increased level was also due mainly to improvement in fuel, favourable water conditions for the hydro power plants and some completed evacuation gap closure projects allowing some of the power from newly commissioned NIPPs – Omotosho (+450 MW), Olorunsogo (+112.5MW), Sapele (+225 MW), Alaoji (+225 MW) – and IPPs (Rivers) to contribute to the power grid.

“The remaining NIPP turbines are at advanced stages of completion, especially Ihovbor and Geregu, and are moving towards completion and commissioning. Delays in delivery at Ihovbor and Geregu were principally due to delays in related transmission and gas projects respectively. “Minimal progress occurred at Gbarain, Egbema and Omoku and a recovery plan is required to re-establish these projects towards a meaningful commissioning target.”

The Ministry of Power had, in addition, blamed the drop in power generation and the attendant poor supply of electricity being witnessed across the country on the low gas supply to thermal power plants. The Assistant Director, Press, Power Ministry, Mrs. Pat Deworitshe, confirmed that power generation had dropped and ascribed the development to “general system collapse.” The development had also forced Prof. Nebo to address a press briefing on Wednesday in Abuja, where he condemned the frequent rate of system failures in the power sector and described the development as embarrassing.

He warned system owners and other stakeholders to sit up because such would no longer be tolerated, even as he warned the nation to prepare for more power cuts. A source in the ministry said: “The National Integrated Power Project (NIPP) was conceived in 2004 as a fast-track government funded initiative to stabilise Nigeria’s electricity supply system, while the private sector-led structure of the Electric Power Sector Reform Act (EPSRA) of 2005 took effect. “NIPP was originally designed around seven medium sized gas fired power stations in the gas producing states, and the critical transmission infrastructure needed to evacuate the added power into the national grid.

A commitment to electrify host communities in the vicinity of the power stations and major substations gave rise to the distribution component of the project. “In August 2005, the National Council of State and the National Assembly approved an initial funding of US$2.5 billion for NIPP from the “Excess Crude Oil Account” (ECOA), which statutorily belongs to the federal, state and local governments.

The Federal Government, therefore, incorporated Niger Delta Power Holding Company Limited (NDPHC) as a limited liability company to serve as the legal vehicle to hold the NIPP assets using private sector-oriented best business practices. “Following the 2007 change in administration at the federal level and in many states, the funding arrangements for NIPP were subjected to intensive legal, political and financial scrutiny, resulting in over two-year interruption in funding for the projects. “At the time of the suspension, US$2.8 billion was already invested in NIPP, including US$1.78 billion in funded letters of credits which allowed some of the projects to continue despite the funding interruption. Contracted commitments totalled US$7.385 billion.

“Late in 2008, after a protracted and intensive debate on the way forward, the National Economic Council (NEC) agreed to set aside an additional US$5.375 billion from the ECOA as a Power Emergency Fund to complete NIPP subject to the approvals of all the state legislative houses. “To implement the decision in January 2009, NEC inaugurated the NIPP Steering Council chaired by the then Vice President, Dr. Goodluck Ebele Jonathan, with six state governors and four ministers as members.

“The NIPP Steering Council is now the Board of Directors of NDPHC chaired by Vice President Mohammed Namadi Sambo. Its decisions have revitalised NIPP to add new capacity to Nigeria’s electricity supply system in 2011, 2012 and 2013 for the benefit of consumers throughout the country, as the reforms of the Power Road Map and the EPSRA take effect.”

[Saturday Sun Report]

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