A Review of the Nigerian Energy Industry

Nigerian govt threatens to revoke power contracts

Ben Agande

09 March 2012, Sweetcrude, ABUJA — The Federal Government has threatened to revoke any on-going power contract that fails to achieve at least 50 per cent completion by the end of June this year.

Minister of Power, Barth Nnaji, and Governor Emmanuel Uduaghan of Delta State, who addressed State House correspondents after a meeting of the Niger Delta Power Holding Company (NDPHC) in Abuja, Thursday, explained that the current drop in power supply across the country was due to inadequate gas supply to power plants in the country.

Thursday’s meeting was presided over by Vice President Namadi Sambo who is Chairman of NDPHC.

According to the minister, President Goodluck Jonathan has set up a Task Force to resolve the gas supply crisis by the end of March.

He explained that the maintenance of facilities by Chevron, shutting down of Oben station, the difficulty in gas supply line from Escravos and the yet to be completed work on a Gbaramatu facility are some of the additional problems that have affected power generation in the country.

A statement by the Senior Assistant to the Vice President on Media and Publicity, Alhaji Umar Sani noted that the vice president had further instructed that a list of non performing contractors be compiled for possible sanction by the end of the year.

He said: “Before giving approval to some of the requests by the management of NDPHC, Vice President Sambo warned that the board would no longer approve any new projects and they must concentrate on the urgent delivery of existing contracts.

“The board gave approval for the payment of P.B Power/Jiyoda invoices transferred by the Power Holding Company of Nigeria to NDPHC in respect of project consultancy services for the construction of Alaoji phase 1 power plant.

“It also approved the interim operations and maintenance services for the 451MW Sapele power station in favour of Messrs Marubeni Corporation and Olorunsogo power station.”

Uduaghan explained that progress were being made with Olorunsogo which six units were down but have now been revived and Sapele which have some of their units completed are waiting for gas supply to fire them.

He noted that “the Olorunsogo completed units can generate 450mw, Sapele two units completed can generate 250mw. Unfortunately we have challenges with gas supply affecting these two plants just as it is also affecting other plants across the country, so we looked at the issue of gas supply, fortunately the Group Managing Director (GMD) of Nigerian National Petroleum Corporation (NNPC) and other top officials were here.

“There is a strategic committee that has been put up by Mr President to look into the issues of gas supply and fast track processes that will ensure we have more gas for utilization by our various plants, both the ones under NIPP and PHCN. From the strategies they presented, hopefully there will be improvement in the supply of gas to these various plants.

The minister of Power explained that President Jonathan has ordered for a retreat by all stakeholders in the power sector for March 20, 2012 to ex-ray and bring out final solution to the gas supply and other allied problems militating against the steady power supply as the government would want to see improved and progressively steady supply in the country.

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