• Thursday, May 23, 2024
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The ‘politics’ of the power sector (2)


 Some have also expressed concerns about labour issues within the industry. Well, under a deal with PHCN workers, the Federal Government has accepted to pay a total of N384bn to the staff of PHCN, and this is in addition to the N57bn which was paid out in 2011 as monetisation arrears. The demand of the workers meant a payout of over 97.5 percent of the power privatisation proceeds. The workers will receive payment for redundancy, gratuity and arrears of payment into the retirement or pension accounts of the about 45,000 workers.

It is expected that all workers of PHCN will be fully evaluated by the new owners of the privatised assets and those found to be incompetent will not be retained in their posts. They will collect their compensation and then go on to restart their lives elsewhere. The competent ones will be retained and they will get only part of the compensation, the one to be linked to their pension account.

State of the NIPPs and related projects

The National Integrated Power Project (NIPP) was conceived in 2004 as a fast track government-funded initiative to stabilise Nigeria’s electricity supply system while the private-sector led structure of the Electric Power Sector Reform Act (EPSRA) of 2005 took effect. NIPP was originally designed around seven medium-sized gas-fired power stations in the gas-producing states, and the critical transmission infrastructure needed to evacuate the added power into the national grid. A commitment to electrify host communities in the vicinity of the power stations and major substations gave rise to the distribution component of the project. These assets are listed thus: Calabar – 561mw; Egbema – 338mw; Ihovbor – 450mw; Gbarain – 225mw; Sapele – 450mw; Omoku – 250mw; Alaoji – 1,074mw; Olorunsogo II – 750mw; Omotosho II – 500mw; Geregu II – 434mw; Ibom Power – 190mw; Total – 5,222mw.

These projects would, of course, come on board at different times in the course of the next couple of months leading to 2014 and would naturally be able to help the sector achieve the target of 10,000mw as promised by the power minister, even as some of them would eventually be privatised as well just as the Federal Government has just recently sold the Omotosho Power Plant I to China National Machinery and Equipment Import and Export Corporation (CMEC) under a debt-equity swap arrangement in a transaction worth $217.5m. Eighty percent stake in each of these companies has already been advertised for sale by the Niger Delta Power Holding Company of Nigeria (NDPHC) for which 44 companies have already expressed interests in acquiring same.

Also, the NDPHC has added 274 kilometres of transmission lines to the national carrying capacity through the completion of six transmission projects, namely, the 330KV DC Ajaokuta-Lokoja-Gwagwalada lines, 222Km; 330KV DC Ihovbor-Benin Main-Oshogbo Line A, 17km; 330KV DC Papalanto-IkejaWest-Ayede line, 16KM; 330KV DC Ganmo-Jebba-Oshogbo SC-Turn In/Turn Out Line, 12KM; 330KV DC Omotosho-Ikeja West Line, 5Km; and the 2km 132KV DC Ganmo-Ilorin-Oshogbo Turn In/Turn Out line.

Furthermore, the NDPHC has strengthened the transmission capacity of 12 substations, built three new ones from the scratch and rehabilitated two across the country, with a cumulative capacity of 2,370MVA. In the distribution end of the NIPP project, the NDPHC also has a haul of 30 completed zonal projects as follows: Abuja zone, 2; Benin zone, 2; Eko zone, 9; Ibadan zone, 6; Ikeja zone, 6; Kaduna zone, 3; and Jos/Yola zone, 2.

And, as part of the NIPP, the NDPHC is overhauling the country’s transformer system by putting the huge 3000KVA-50000KVA low voltage range of transformers out of service and replacing them with hundreds of thousands of complete, self-protective (CSP) high voltage transformers in the 25-50KVA range. Attached to two or three homes at the maximum, the CSPs are being deployed nationwide to end the phenomenon of plunging whole neighbourhood into darkness whenever the sole transformer serving several streets pack up, among other problems associated with the central transformer system.

Although the country has been ill-famed for the wrong reasons, not many know that the NIPP is the single largest power project by any country in the world right now. It is a massive undertaking that is replacing the country’s worn radial infrastructure with a loop system that would ensure multiple sources of power supplies to consumers across the country.

State of gas supply to the plants

The World Bank has begun to provide Partial Risk Guarantees (PRGs) to support Nigeria’s gas sector to bring more electricity to consumers and one of such Gas Supply and Aggregation Agreements (GSAAs) has just been executed for Egbin Power plc/plant between the bank, PHCN, Chevron Nigeria Limited and Deutsche Bank. Under the 10-year GSAA, which is based on the industry template developed by the Nigerian National Petroleum Corporation (NNPC), Chevron will provide gas to Egbin power plant for power generation. This will be the first time that Egbin power plant will be able to procure gas under long-term 



Afolabi is president at Viva Real Estates 


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