Nosike Ogbuenyi, Omololu Ogunmade And Charles Ajunwa
3 April 2008
Lagos — With the halting of work on some sites of the National Integr-ated Power Project (NIPP) as a result of stoppage of payments by the Federal Government since June 2007, 21 gas turbines imported for the generation of electricity are lying idle at three of the nation's ports - Onne, Warri and Calabar.
The cost of the imported power-generating equipment is estimated at over $300 million and it is feared that they may no longer function optimally because they are not being well-preserved.
They were imported nearly a year ago to be installed immediately but the controversy over NIPP has meant that the turbines are holed up at the ports.
Most of the project sites are not yet ready for the installation of the turbines because only 25 per cent of the amounts have been paid in most cases.
Former Minister of Power and Steel in the Obasanjo administration, Senator Liyel Imoke, now Governor of Cross Rivers State, confirmed this to THISDAY yesterday while fielding questions from THISDAY Board of Editors during his visit to the corporate headquarters of the newspaper in Lagos.
The 21 turbines and other equipment which include generators also daily attract demurrage estimated at millions of dollars, expected to be paid by the Federal Government, except there is a waiver.
It is feared that their manufacturer's warranty on the equipment may expire if the power projects remain in the state of limbo.
The project has been put on hold for nearly one year now while the House of Representatives Power and Steel Committee has since started probing it.
Imoke further revealed that because of the enormity of the project, the Nigeria Ports Authority (NPA) was asked to work hand in hand with two foreign firms, Panalpina and SDV, with a view to ensuring a clearing of the turbines.
Imoke said that because the equipment were wasting away, the President of Benin Republic recently requested that one of the turbines be sold to his country for its ongoing power project.
"The President of Benin Republic came to meet us and said could we please sell to him because they are trying to get one turbine or two in Benin Republic. He has ordered one from General Electric, but it takes a waiting time of three years to get it delivered," he added.
He disagreed that the NIPP had failed, contending that if thoroughly implemented and supervised, it was capable of ameliorating the nation's power woes.
According to him, the projects were conceived to address the critical challenges of the Nigerian power sector and "contrary to insinuations in many quarters it was well conceived".
The former minister suggested that while continuing with the project, the Federal Government should hold the individual contractors responsible for the successful execution of the projects.
"Anybody who fails to perform could be held responsible," he said, expressing his delight that the Presidential Committee on the Accelerated Expa-nsion of Nigeria's Electricity Infrastructure recently submitted its report with a promise that Nigeria could hit 6,000 mw next year.
"Of the 6000mw, 3368 megawatts will come from NIPP according to the committee," he said. "This shows that NIPP is not a waste as many people tend to suggest. All we need do now is complete the project as time is passing by."
Meanwhile, Cartlark /Payma Bargh, the consortium handling Ikot-Ekpene and Afam 330/132kv and 132/33kv substations and 330kv and 132 transmission lines, has denied disappearing from sight.
In a paid newspaper advert signed by its Managing Director, Mrs Maryam Sola Akanmode, the contractors said they were "extremely distressed to read the account in various newspapers which insinuated that we disappeared after collecting payments for the Substation and Transmission line projects".
They said the assessment of their performance "has been based on a regrettable misunderstanding of the nature of the EPC project"
Explaining that EPC stands for Engineering, Procurement and Constr-uction they said an EPC Contract has three distinct but interrelated segments.
Engineering and Procur-ement constitute the lion share of an EPC contract. In some cases, they account for up to 80 per cent of the total contract, they said.
"The amounts released so far for the Project are as follows: (1) 25.288 million Euros being 100% of the cost of Engineering and Equipment Procurement. The Naira equivalent is N2.845 billion (2) N364.493 million being 25% ONLY of the money for Construction, local logistics and transportation to site some of which is actually expanded on the local logistics of procurement such as clearing of goods at Ports.
"The sum of N364.493 million was released for Construction. This is only 25% of the N1.4 billion for this segment. The amount is to cover Preliminaries like soil test, clearing, site facilities, perimeter fencing, civil works, foundation works, logistics (especially clearing of hundred of containers), installation of equipment and commissioning
"It is important to state that if all the N364.493 million released for construction had been fully and adequately utilized it will translate to only 8% of the total project. In other words if the inspection team is only interested in work on site the best performance can show , vis-a -vis the money released, can only translate to 8% of the total EPC contract.
"We acknowledge the fact that the progress on site is behind schedule for several reasons.
The most important reason is the delay in the compensation of the three communities affected by the location of the project. In fact, up till today, the landowners along Afam to Ikot Ekpene transmission line have not been compensated. Another reason is the peculiar process of designing the Substation, especially in view of the fact that our Substation is the Switching Station for where about 10 transmission lines originate or terminate. We are therefore advised to make haste slowly because the precise location of the substation is susceptible to change.
"From the break down earlier stated, the amount released for Procurement and Engineering is 73% of total project cost. The progress made so far is as follows: 90% of Trans-mission Line equipment delivered on site. The balance of 10% is for accessories to be procured after ascertaining precise quantities, 45% of Substation Equipment awaiting clearance at Onne Port, 45% of Substation Equi-pment on the high seas, 10% of Substation Equipment consists of accessories to be procured after ascertaining precise quantities.
"The good thing about procurement is that you cannot conceal the facts. Right from the opening of Letter of Credit, to shipping, to clearing and to storage at site nothing is hidden. We have 120 containers on site, 31 containers at Onne Port, and some on the high seas. Some of the containers on site were delivered over six months ago!
"We therefore still maintain and the Consultant will agree, that in totality, our performance is at least 40% of the EPC contract," they wrote.
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With 12 very long delivery turbines delibrately abandoned at the ports for about a year, the present administration is, no doubt, stalling the power projects to achieve the very fruitless, childish and inept goal of creating conditions to blame or discredic the former adeministration of the country. These turbines, costing about $300m, are wasting away fast. WHAT A SHOW OF INCOMPETENCE IN THE ABSOLUTE! One wonders why the leaders of any country should resort to such disgracefully destructive tactic that does so much harm to the nation. However, looking at the developments now in Nigeria globally, there seems to be a trend showing, the avowed support for Africom, the apparernt ceding of the control of the nation's security to Britain and the US (putting the country back essentially to the colonial days), etc. WHAT IS NEXT?!