Leadership (Abuja)
Golu Timothy
16 October 2008
Henceforth, all materials for the Power holding Company of Nigeria (PHCN) will be procured under a new system of direct purchase, the Federal Government has said. The decision was taken during yesterday's meeting of the Federal Executive Council (FEC). This means that middlemen, who used to serve as contractors for the deal, have been eliminated. This action is seen as a move towards the declaration of a state of emergency in the sector.
The council has also agreed to meet tomorrow (Friday) in an extraordinary meeting so as to put finishing touches to the 2009 budget.
Addressing State House correspondents after yesterday's FEC, Minister of Information and Communications John Odey said the decision to embark on direct purchase was to save time and cost in an attempt to revamp the ailing power sector.
Mr. Odey, who was accompanied by his counterpart in the Ministry of Power, as well as the Senior Special Assistant to the President on the Millennium Development Goals, said the action has however not eliminated due process verification.
Explaining the achievements so far attained by the PHCN, the Senior Special Assistant to the President on MDGs, Mrs Amina Ibrahim, said for sometime now the nation's power generation has remained at a steady 3,700 megawatts but lamented that the problem of transmission is still subsisting, hence the need for direct procurement of the materials.
Giving the highlights of yesterday's approvals in the power sector, Mr Odey said the budgetary approval for the sector in the 2008 budget was, N2.646 trillion and N2 billion for power transformers and switch gear.
He said Council also gave approval for the design, manufacture and supply of four 33/11 KV power transformers and 10 sets of 11 KV indoor switchgears to be funded from the 2008 appropriation in the sum of N164,993,198.25 only, while the supply of 10 sets of 11 KV indoor switchgears is in the sum of N148,185,000 with 12 months as completion period.
The minister further explained that the Council also approved the review and project augmentation cost of contract for the design, manufacture and supply of two 33KV mobile substations for Ogba and Akute substations at a revised sum of $4.953,000 with an additional N10,000,000 for clearing and local transport, being the original project cost and the augmentation cost of $2.946,544.00 at the prevailing exchange rate at the time of payment and 18 months as completion period.
He said the contract for the Ogba substation became necessary because the transformers were overloaded, being in the Ikeja industrial area of Lagos
Other decisions of the council were the award of contract for the supply of 350 40KG cylinders of SF6 gas for system circuit breakers in the sum of 216,750 Euro, C and F Lagos Port as offshore portion at the prevailing exchange rate at the time of procurement plus N18,974,777.05 as on shore portion, as well as the change of source of funds for the ongoing reinforcement of Abakaliki 132/33KV substation from internally generated revenue to 2008 budgetary appropriation in the sum of $756,418 with 18 months as completion period.
Also, the government said power generation in the country has reached about 3,700 megawatts as against the less than 2,000 megawatts which was being generated as at the time of the assumption of office of the Umaru Yar'Adua government.
President Yar'Adua had, at the inception of his administration in 2007, pledged to shore the capacity of power generated under the planned power emergency arrangement to 6,000 megawatts by end of 2009 and an additional 10,000 megawatts by 2011.
It was agreed between the three tiers government that $5.3 billion from the excess crude account be used to finance the project.
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