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Lawmakers threaten to cancel new power projects in 2021 budget

Lawmakers threatens to cancel new power projects in 2021 budget

Nigeria’s House of Representatives on Tuesday said it would cancel all new power projects proposed in the 2021 budget unless the Federal Government completes the141 ongoing power projects being executed by Transmission Company of Nigeria (TCN).

Chairman, House Committee on Power, Aliyu Magaji, who issued the threat at the 2020 budget performance and 2021 budget defence of TCN, frowned at the paltry sum of N4.090 billion approved for TCN, out total sum of N165.896 billion proposed by TCN in the 2021 budget proposal presented to the Budget Office, leaving a difference of N161.805 billion.

In his presentation, TCN Managing Director, Sule Abdulaziz stated that many old projects estimated at N165.897 billion, including those of the year 2001 still need special financial intervention for completion, adding that the completion of all ongoing projects as captured in the original budget proposal will add about 8,000MW to the national grid which is far insufficient for a population of 200 million.

He said: “What we proposed in the budget is N165.8 billion so that we can be able to complete all the ongoing projects and start some new ones. But unfortunately for TCN we were only given N4 billion”.

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According to Abdulaziz, a total of about 158 major capital projects were awarded from 2001 to date including, 39 completed projects (28 substations and 11 transmission lines; 25 projects are completed and commissioned to service without outstanding payments to contractors.

He explained that 119 ongoing projects are at various completion levels ranging between 0-95% completion level; 45 transmission lines projects (Green Field); 70 substation projects (Green Field); and 4 reinforcement projects (brownfield projects), adding that 14 new projects proposed in the 2021 fiscal year are at various levels of procurement.

On the 2020 budget performance, Abdulaziz stated that out of the total sum of N6,017,999,435 appropriated, the sum of N3,008,999,718 (50%) while the utilization stands at N1,919,948,763 (64%) (slowed down by Covid-19 and GIFMIS issues).

But Magaji said: “Last year, they wrote a letter to us indicating that they have almost N165 billion debt on abandoned projects, hoping that this year will be better, I don’t know what they will do with N4 billion out of the N165 billion.

“It is still within our purview to look at the budget and do the needful for them. I keep asking this question even though you are not the proper person to answer the question: what relationship is between the TCN projects and the Siemens.

“The President had a very wonderful and good intention but it is my opinion that until these TCN projects are achieved, the Siemens projects might not be what we expected them to be. I will see the involvement of our leadership both in the House and the Senate to ensure that you get proper funding. Without the transmission, there won’t be distribution. So, we have to really play up the transmission aspect of it.”

In his intervention, a member of the Committee, Shehu Garba who observed that power is at the centre of the crises bedevilling Nigeria, including the “youth restiveness that we have had can be traced to the collapse of power over the past two decades, leading to the collapse of small businesses.

“Therefore, your mandate is central to the revival of economic growth and job creation in the country. There is the need to engage the leadership at a very high level for this issue – the issue of funding. I’m at a loss seeing you proposing almost 30 new projects when you have such a monumental outstanding.

“In fact, I have a specific project in my constituency for the past five to six years without being completed and funds have been committed. You have manufactured panels, they have been delivered on-site and my fear is that they may start vandalising these things imported with World Bank loans and multilateral agreements. Now you have new projects – 30 to 40 – when you have a huge number of ongoing projects. Honestly, I think this is an area that you need to look at.”

While responding to the motion on the rationale behind the allocation to the ongoing projects, the TCN Boss said: “Actually, what the honourable said is correct but you have to understand that we are civil servants. Some of these requests are coming from higher authorities and we cannot say no.”

The ruling, Magaji said: “If you read Page 10 of the budget proposal, there is ‘emphasis on completion of ongoing projects.’ It is unrealistic, even though I have ruled on the motion and the nays had it, you cannot do N165 billion projects with N4 billion. It is not possible. And we cannot give you money to embark on new projects while you cannot complete ongoing projects.

“It does not make sense. So, we will sit with them. It is my opinion that we must concentrate on ongoing projects. If we are going to give money, we are going to give it to the low-hanging fruits. They will give us the projects they feel they can complete as soon as possible and we allocate the money we are going to get from the leadership to ensure that those projects are completed”.