Why NIPP’s experience slow growth – Expert

powerplant-gereguDelays in securing approval from relevant authorities by contractors is affecting the growth of the National Independent Power Plants (NIPPs), the Chairman, Electric Power Foundation, Otis Anyaeji, has said.

Anyaeji, in a paper titled: ‘Nigeria’s Power Sector: Contractors’ Expectations,’ and delivered during a stakeholders’ programme in Lagos, said the problems made the plants to generate less than 2,000 megawatts (MW) in eight years. He said the development informed the government’s plan to privatise the plants next year.

He said some communities are hostile to contractors handling the power projects, following the failure of government to compensate them for using their lands. Others, he said, include delays in getting letter of credits from banks, clearing power equipment at the ports, and hostile treatment meted to contractors working on NIPPs’ sites.

He said: ‘’ Delays in paying compensation to communities for acquiring their land, or getting Right of Way have affected the implementation of NIPPs. Many communities, after collecting compensation, continue to build new structures on the Right of Way.

He said often times, the communities mobilise against the contractors demanding for money. A recent case in point is the Jos-Makurdi Transmission Line where armed personnel had to be deployed before contractors could work.’’

Anyaeji said contractors’ inability to get letters of credit from banks as at when due have affected the execution of the projects.

‘’ When a letter of credit is to be issued, bank (locally or foreign) must alert the Central Bank of Nigeria (CBN) and the relevant contractor on the issue. The CBN must then officially communicate same to the Niger Delta Power Holding Company of Nigeria(NDPHC) without which the process of effecting correction in the Letter of Credits cannot start.

“Long delays are usually experienced before the final notification is received by NDPHC. It is either a Director that would sign the document is out of the country, or other reasons are given.’’ he added.

Speaking on the issue, the Niger Delta Power Holding Company (NDPHC) Spokesman, Yakubu Lawal, said the power stations are not facing serious problems. Lawal said the government has been trying its best to ensure that the plants achieve their goals of boosting power supply in Nigeria.

He said: ‘’ There are no significant challenges currently hindering our operation. What we experience is a little problem that is being handled administratively within our organisation and other inter government agencies. NIPP projects in generation, transmission and distribution have progressed significantly with current contribution to national grid put at about 2000megawatts subject to availability of gas to fire the plants.

He said many of the company’s transmission and distribution projects have been completed , adding that five out of the ten power stations have been fully completed with President Dr.Goodluck Jonathan commissioning two in October 2013.

The plants, he said, include Geregu II power station (434MW) in Kogi state and Omotosho II (500MW) in Ondo State respectively.

He said the privatization of the 10 power stations would be completed by mid 2014, adding that the money realised from the exercise will be used the for second phase of the NIPP scheme. Lawal said the scheme will center on construction of more hydro power stations and transmission infrastructure to expand their capacities and serve Nigerians better on completion.


[Akinola Ajibade, The Nation]





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