Nigeria: U.S.$16 Billion Power Probe - Many Heads to Roll As EFCC's Investigation Deepens

EFCC cartoon
8 September 2019

Many heads may roll as the Economic and Financial Crimes Commission (EFCC) plans to go after more people allegedly linked with an investigation into the $16bn power projects awarded under the administration of former President Olusegun Obasanjo.

As part of the probe, the EFCC, last week detained two officials of the Niger Delta Power Holding Company (NDPHC).

The anti-graft agency has launched a probe into an alleged misappropriation of the funds running into trillions of naira after President Muhammadu Buhari gave a clue last year that the deal was going to be investigated.

President Buhari had given the EFCC the green light to probe the contracts following persistent complaints by Nigerians about insufficient power supply in the country after government had allegedly spent $16b.

Buhari had accused the former President Obasanjo administration of blowing $16bn on power. But Obasanjo replied that he was never indicted, saying: "The answer is simple; the power is in the seven National Integrated Power Projects and 18 gas turbines that Chief Obasanjo's successor, who originally made the allegation of $16bn did not clear from the ports for over a year, and the civil works done on the sites."

Speaking at the Federal Capital Territory's presidential rally of the All Progressives Congress (APC) in February this year, Buhari vowed that his administration would continue to ensure efficient utilisation of the nation's scarce resources in the provision of infrastructural facilities across the country.

He insisted that those involved in the wastage of over $16bn on power sector without any meaningful results under the previous administrations would be investigated and anyone found wanting would be prosecuted.

Buhari said: "You know there was no power under the previous administrations, and a previous government admitted, without anybody asking them, that they spent $16b on power. You know more than I do. Where is the power? Where is the money?"

Sources close to the anti-corruption agency confided in Daily Trust on Sunday that the commission would go all out to get all the people who had a hand in the alleged misappropriation of the funds in both the public and private sectors.

Sources said investigators were not ready to leave any stone unturned in trying to unmask the brains behind the $16b loss to the nation.

Individuals, no matter how highly placed, who would be found wanting by the probe, would be made to face the full wrath of the law, one of the sources said.

"Very soon, Nigerians will see more invitations and more arrests as the investigations deepen," he said, adding that, "More information have been gathered about the manner the power projects were managed," he said.

The EFCC is aiming at unmasking the actors in the controversial $16b power projects of the Federal Government. The huge amount covered investment into the whole power sector, which cuts across generation, transmission and distribution. The projects were actually handled by the NDPHC.

Most of the projects were allegedly allocated under the National Independent Power Projects under the Obasanjo administration.

It was learnt that top officials of the administration may be invited to shed light on their roles in various projects.

As part of its move to unravel the true position regarding the power sector fraud, operatives of the EFCC had detained two key officials of the NDPHC over their alleged involvement in the payment of N84b to the host communities.

Mr Marvel Emefiele, head of finance and Eze Odigbo, head of compensation of the NDPHC, were reportedly detained in connection with how huge public cash meant for the payment of compensation to many communities was handled.

The two key officials of the NDPHC were said to have been detained by the EFCC following their alleged involvement in bogus payment and diversion of about N850m compensation to communities where the components of the power project were sited.

Although approval was said to have been granted for the payment of N84bn to the communities where transmission lines of the power project were meant to be laid, a team of EFCC investigators reportedly discovered that the money was not paid to the benefiting communities after the huge sum was officially signed off from the books.

Also detained by the EFCC at the launch of investigation into the matter were the managing directors of two leading Nigerian engineering firms: Richard Ayibiowu and Mr. Richard Ayibiowu, while another chief executive of an engineering firm, Christian, Ejik Imoka, was also detained over a controversial payment for N500m contract.

Following the initial arrests by the EFCC, other key suspects implicated in the $16b power projects were said to have relocated abroad. But a source told Daily Trust on Sunday that the EFCC had sought the assistance of the International Police Organisation (INTERPOL) to go after the runaway suspects.

Those sought after for interrogation by the EFCC include some ex-officials of the NDPHC; technical committee and general project manager; a former managing director of the Power Holding Company of Nigeria (PHCN); ex-chief executive officer of the Transmission Company of Nigeria (TCN); an ex-head of transmission of the TCN and a businessman who was expected to supply nine gas turbines and auxiliaries at an alleged inflated cost of N185bn ($1.55bn).

The EFCC probe team was also said to have commenced a review of the contracts awarded to 27 firms, to ascertain whether or not they were executed, while also working round the clock to verify the actual amount withdrawn from the Excess Crude Account (ECA) for the National Integrated Power Project (NIPP).

When the Federal Government then initiated the various reforms in the power sector, the power ministry was under Liyel Imoke (2003 to 2007). But a report titled, "From Darkness to Darkness," released by the Socio-Economic Rights and Accountability Project (SERAP) at the Westown Hotels, Lagos earlier in August this year, said the huge investment yielded little results as it failed to generate the needed amount of electricity or meet the set goals.

NIPP power plants gulped $8.4b since 2005

The National Integrated Power Project (NIPP), managed by the NDPHC, was established in 2005 with the objective of increasing the generation capacity by over 5,000 megawatts.

The NDPHC is funded from the Excess Crude Account (ECA) with equity distribution, where the Federal Government has 18 per cent, states 35per cent and local governments having the largest share of 47per cent.

The NIPP was focused on completing and operating 10 power generation companies with about 5,000MW installed capacity, and has gulped $8.4b, officials said.

The latest update from the NDPHC revealed that eight of the 10 NIPP generation companies, along with associated infrastructure, have been commissioned and connected to the national grid and contributing over 22 million kilowatts hour (kwh) of energy daily to the national grid.

The pioneer managing director of the NDPHC, Mr James Olotu, in an interview with Daily Trust in 2018, said the 10 NIPP generating companies with 5,778MW electricity capacity, 130 transmission substations, 350 distribution projects and gas assets were executed for $8.4b (about N3.032 trillion).

A breakdown of the investment of the NDPHC in the NIPP from 2005 shows that $4.4bn was spent for generation; transmission network was about $2bn, distribution infrastructure was about $1.5bn, investments in gas was about $750m. The rest, officials said, was for administration, compensation, salaries and rents.

During the bidding process in 2014, the NIPP plants were priced at $5.7bn (about N2.057 trillion) for 80 per cent of their shares, but the transaction was yet to be completed. Officials said the preferred bidders complained of inadequate transmission, gas and distribution.

The NDPHC said it continued to operate the eight power plants that are completed with about 4,000mw available generation capacity. This is despite undesirable security challenges and an accumulated N121bn energy debt the firm is being owed in the electricity market.

NIPP generating companies

The 750mw Olorunsogo II NIPP plant is in Ogun State and was completed in March 2015 and commissioned by former President Goodluck Jonathan. It has four General Electric gas turbines, two steam turbines. The project was handled by SEPCO III.

The 450mw Sapele NIPP plant has four GE turbines in Delta State and the EPC was completed in 2012 by Marubeni Corporation and MeWAL firms. It is currently operational, records show.

The 434mw Geregu II NIPP plant is located near the Ajaokuta Steel Complex in Kogi State. It has three Siemens gas turbines and added 435mw capacity when it was commissioned in 2014 by former President Goodluck Jonathan. Siemens was the engineering, procurement and construction contractor for the project.

450mw Omotosho II NIPP

The plant, located in Ondo State, has four GE turbines and was commissioned in 2013. The project was handled by CMEC Limited.

450mw Ihovbor NIPP

It has four turbines supplied by General Electric in Benin, Edo State. It was completed in 2014 and the contractor is MeWAL.

450mw Alaoji NIPP

The Alaoji NIPP plant is located in Alaoji, near Aba in Abia State. The project was to deliver six units of General Electric (GE) gas turbines and one steam turbine with a combined cycle capacity of 789mw.

In 2015, the first phase of 480mw capacity was commissioned by former President Goodluck Jonathan and has been operational while the second phase of 289mw was to be completed in 2017.

Rockson Engineering Limited, a Nigerian firm, is the engineering, procurement and construction contractor for the project that delivered the phase one and has not completed the combined cycle component.

563mw Calabar NIPP

The ideal plan was a 630mw capacity plant with five GE turbines. The 563mw (about 600mw) plant was completed in September 2015 and is operational at Odukpani, near Calabar in Cross River State.

Marubeni Corporation/Marubeni Engineering (West Africa) Limited, a Japanese conglomerate, executed the project.

225mw Gbarain NIPP

It is located in Bayelsa State with two GE turbines. A section was completed, commissioned and operational since 2016, while Rockson Engineering is yet to complete the other section.

225mw Omoku NIPP

This has two GE turbines and was supposed to be completed in 2016 in Rivers State. Rockson Engineering has not completed it and its transmission line is pending.

338mw Egbema NIPP

This plant has three turbines from General Electric and should generate 378mw in Imo State. It will add at least 360mw to the national grid when completed. It was scheduled for completion in 2017, but construction is still ongoing, its transmission line project is not yet completed and the gas pipeline is under construction by the Nigerian Gas Company (NGC).

Rockson Engineering Limited, the Nigerian firm handled this project. In December 2018, the managing director of the NDPHC, Mr Chiedu Ugbo, said on an NTA programme, Presidency This Week, that the Assets Management Corporation of Nigeria (AMCON) had taken over Egbema and Omoku power plant projects from Rockson Engineering Limited over delays in completing them.

"We are working with the Assets Management Corporation of Nigeria, which has taken over from the contractor under a receivership, with the full support of AMCON to complete these projects," he said.

Transmission, distribution boosted with 21,336 substations

Records and data obtained from the NDPHC on its projects' status show that the NIPP has added hugely to transmission infrastructures managed by the Transmission Company of Nigeria and those of distribution companies by 21,336 substations. There is an added 5,000 kilometres in the 330 kilovolt transmission line section and 6,000km of 132kv lines.

For the distribution line, the NIPP has added 23,753km for the 33kv segment and 19,226km for the 11kv segment.

The NDPHC built 114 substations for the TCN and 21,222 substations for distribution companies. The records indicate that under the NIPP, 23 new substations were added in the 330/132kv section and 91 substations for the 132/33kv type. At the distribution company level, the NIPP, as at 2019, has added 679 substations of 33/11kv capacity and 20,543 substations in the 11/0.415kv capacity type.

Critical among the transmission projects the NDPHC has delivered are substations in Lokoja and Gwagwalada in the Federal Capital Territory (FCT). There is the 330kv Ikot Ekpene transmission backbone and switching hub that provides several 330kv double circuit transmission line from generation companies in Calabar, Alaoji, Afam and Ikot Abasi. This hub radiates power from these southern based generation companies to Jos and the North-East through Ugwuaji and Makurdi in Enugu and Benue states.

The firm also constructed and commissioned over 350 injection substations for the distribution companies with a combined capacity of 3,540mw for improving access to electricity and quality of power supply to consumers. It said distribution capacity had been enhanced by the installation of 25,900 completely self-protected transformers to significantly reduce technical losses.

Additional statistics proved the NIPPs increased 33/0.415kv and 11/0.415kv capacity by 26 per cent and further targets reaching 163 per cent when all the projects are completed.

When contacted about the ongoing probe of the alleged $16b power projects, the spokesman of the EFCC declined to comment, saying he had nothing new to say.


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