The Hurdles Federal Government Must Cross

Since the contract was first awarded in 2007, the Mambilla Hydropower Project in Taraba State has been facing a lot of challenges which delayed in its take-off.

Experts have said that the power play around the project may have deprived Nigerians from reaping the benefits four years ago. The effect, they say, is that Nigeria has gained more dark days than light due to over investments in the thermal, gas-reliant power plants.‎
Now, with another administration in place, there are hopes that the old hurdles can be surmounted for work to fully resume at the site of the mega power project.
The Federal Ministry of Power, Works and Housing, in a recent update on power stations in the power sector, said that out of the 26 stations, only three are hydro based. They are the Kainji/Jebba Generation company (Genco) and the Shiroro Genco operating at less than 1,000megawatts (mw) combined capacity at present.
With the continuous vandalism of oil and gas infrastructures in the South, the country’s power supply has been a nightmare as it rose barely above 3,000mw last week and went down again to 2,500mw at the weekend.
A former official of the Bureau of Public Enterprises (BPE) and an expert in the power sector told Daily Trust at the weekend that the politics which beclouded the largest hydro-project (Mambilla) in West Africa has left the national grid to drop to 2,500mw due to poor capacity from the hydros.
The expert said that the Mambilla station should have been ready since 2011 to provide 4,000mw electricity. Similarly, the 700mw proposed Zungeru hydro ought to be completed next year. Unfortunately, the plant faces a legal tussle that hampers success on its construction.
“With the capacity from Kainji/Jebba and Shiroro hydros, we could get up to 4,000mw from hydro Generation companies (Gencos) alone and we would not have been in darkness now,” he said.
He disclosed that the ideal capacity of the Mambilla hydropower is 2,600mw and not 3,050mw as represented by the past administration. Being privy to the original project documents of May 2007, the expert said that the initial consultant of the project, Lahmeyer Nigeria, estimated that it was meant to generate 2,600mw.
He said that a former vice president of Nigeria got a new French consultant who expanded the project’s scope to 3,050mw and revalued the cost to $3.2bn (about N636.9bn) in 2011.
The power sector expert attributed the delay in starting the project since 2011 to the inclusion of Sinohydro Corporation, a Chinese firm that was not part of the original bid winners-CGC/CGGC in 2005.
“The Obasanjo government signed the contract with the Chinese firm in 2007 and if it was followed by now, we would have had 2,600mw additional hydropower to the grid. But the people who stopped it are in this country and they stopped it for selfish reasons. They wanted to put their candidates there even when they did not work on the project tender.”
The Daily Trust gathered that the CGGC recently had a meeting with the Presidency on the Mambilla project on the need to return to the original project design.
A source said: “With the coming of President Muhammadu Buhari in 2015, CGGC had to revert to the original bid document and contract of 2007. That was what the project faced for the last eight years during which it should have been completed and operated.”
Meanwhile, recent updates from the Ministry of Power, Works and Housing indicate that the process for the commencement of the project will record significant boost this year.
Mr Babatunde Fashola, the Minister, Ministry of Power, Works and Housing, recently said that Mr Darious Dickson Ishaku, the Taraba State Governor, who was a former minister of state, power, would acquire land for the project.
“The first thing to do is to acquire the land and deal with compensation issues, which the governor has promised to deal with,” Fashola said.
“The feasibility study has been done and so too the environmental impact assessment. We move one day at a time closer to starting Mambilla.”
A director in the power ministry has said that the government has agreed that “two Chinese firms should handle the engineering, procurement and construction (EPC) contract, adding that the firms are the Gezhouba Construction Group Corporation (CGGC) and the Sinohydro Corporation.”
Records show that CGGC has exclusively completed or participated in construction of over 100 hydropower stations, including the world’s largest hydropower plant, the Three Gorges Project, in Hubei Province, China, which generates over 20,000mw.
Sinohydro is presently engaged alongside another Chinese firm, CNEEC in the 710mw Zungeru hydropower project in Niger State since May, 2013.
The official said that the project cost has been reviewed as “the Bureau of Public Procurement (BPP) has valued the project at $5.732billion (about N1.140trn).
The source, who is privy to the project, said that the contract is for a period of 63 months (over five years), including 12 months for a defect liability period (test running) before it is handed over to Nigeria.
Another official who is privy to the legal aspect besetting the project, said that the federal government will contribute its 15 per cent equity financing from the proceeds of N1trn sales of 10 power plants under the National Integrated Power Projects (NIPPs) whose transaction is pending since 2014.
The ministry official and our expert sources said that the balance of 85 per cent fund is now with the China Export Import (EXIM) Bank and would be disbursed once Nigeria provides its 15 per cent fund.
The director said that the country will negotiate for a loan from development agencies to enable it fulfill its part of the agreement, should the expected NIPP fund suffers more delay.

- Daily Trust