Daily Trust (Abuja)

10 December 2012

Nigeria: Why North's Biggest Power Plant Is Stalled

Abuja, Kaduna, Port Harcourt — The plan to build a multi-billion naira 215 megawatts power plant in Kaduna is frozen at the Onne port in Port Harcourt, where turbines for the project are trapped for nearly two years now, Daily Trust investigation reveals.

Sources say the turbines and other components of the power plant cannot be transported up North because the roads are bad and the bridges weak.

The Federal Government awarded the contract in November 2009 to General Electric and Rockson Engineering for a dual thermal plant using Low Pour Fuel Oil (LPFO) and natural gas, to be located in Kudenda, Kaduna.

It has a December 31, 2013 completion period, but sources say the planners did not reckon with nature of Nigerian roads and quality of the LPFO produced at the Kaduna refinery.

The project was conceived as part of efforts to revive industries that folded up as a result of unstable power supply.

When the contract was awarded three years ago, an official of GE said the scope included manufacture and supply of eight General Electric Frame 5 Dual Fuel Gas Turbines in Italy and shipment to Nigeria as well as the design, engineering, procurement of the balance of the plant, installation, construction, testing and coming of the whole project.

A source involved in the project told Daily Trust that manufacture and subsequent shipment of the turbines were done without any thought on how they would be transported to Kaduna. He said it was only when the equipment arrived at the port in Onne, Rivers State, nearly two years ago that authorities and contractors began to worry about how to bring them up North.

"The turbines are very heavy and the roads are too bad and the bridges along the way too weak to carry the vehicles that will transport them," the source said.

At a point, the option of flying the turbines by a special Russian plane was mulled but was this considered to be too expensive.

The Federal Ministry of Works then pledged to fix the roads within six weeks at a much cheaper cost than hiring the Russian plane, but six months after making the pledge this has not been done.

Sources also told Daily Trust that the problem is not with the transportation of the equipment alone but also with fuelling the power plant.

The plant is to be powered with LPFO to be sourced from the Kaduna refinery, but it was later found out that the LPFO produced in Kaduna is of low quality and could damage the equipment.

"Therefore the fuel has to be imported and brought to Kaduna from the seaports by tankers since the pipelines are also problematic. The plant will require 30 fuel tankers per day to work at full capacity," the source said.

When Daily Trust visited the project site last week, few construction workers were seen. Heavily armed policemen were stationed by the side of the premises, and our correspondent observed that construction work was moving slowly.

Project consultant, Engineer Smart Ukowa of German company Stag-Encotac, confirmed to our reporter that the turbines are in Port Harcourt but other materials needed for the plant are already on site.

"Because of the poor roads, the turbines are still in Onne, Port Harcourt but this does not mean that the work is not ongoing. The main job is the foundation and we've finished 25 percent," he said.

He said the turbines were supposed to be in Kaduna by last month but that the road repair work was delayed by the floods.

Ukowa, however, refused to comment on meeting the December 2013 completion time of the project.

"Auditors came here last month from the office of the Auditor General and a second set from the office of the Vice President and we took them round. They saw the work and they were satisfied," he said.

"This project was to be a brown field project. A brown filed is an existing plant you want to rehabilitate. But it was changed to blue. A blue field is like a green grass; you clear the bush and start from the scratch. So, the project is a blue field."

Speaking further, Ukowa said, "Initially, we wanted to use Kakuri power station but it was changed because there is a gas line passing at the back of the power plant. But now we are going to used LPFO instead of gas. We are still discussing with General Electric, the equipment manufacturers on the LPFO."

When contacted, Kaduna State Commissioner of Rural and Community Development, Architect Isa Idris Umar, also confirmed that the contractors were finding it difficult to transport the turbines from Onne in Port Harcourt to Kaduna because of the bad roads.

"Yes, your findings are true and factual but the government is working hard to address it," he said.

"The River Niger bridge cannot withstand the turbines because they are very heavy. The Federal Ministry works is working hard to reinforce the bridge. They might not complete the plant as scheduled because of this challenge," he added.

Efforts to speak with the Federal Ministry of Power on the state of the project have not been successful as spokesman for the ministry, Mr. Greyne Anosike, has not responded to our request for comments. He had asked Daily Trust to send a formal request by email which was done weeks ago but no response has been given by last night.

When our reporter visited Onne, sources said the turbines have been accumulating demurrage fees totaling over N43.8 million so far.

As of last year terminal operators charge N8,000 per day for a 40-foot container while a 20-foot container goes for N4,000 per day. Early this year the demurrage charges were hiked with a 40-foot container going for N12,000 while that of a 20-foot container goes for N10,000. A source at Onne said the Kaduna power plant equipment might be in up to 10 large containers.

Ismail Mudashir, Sunday Isuwa, Victor Chucks and Yunus Abdulhamid

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