A Review of the Nigerian Energy Industry

NDPHC revokes distribution jobs of 3 defaulting NIPP contractors

James Olotu, NIPP boss
James Olotu, Managing Director of NDPHC,

11 August 2014, Abuja – Following reports of exhaustive meetings and deadline threats in attempts to arrest  the slow pace of executing electricity distribution contracts awarded to companies by the Niger Delta Power Holding Company (NDPHC) under the National Integrated Power Projects (NIPPs), the board of NDPHC has finally approved the revocation of three of the various distribution contracts within the framework.

Investigation on the status of the generation and distribution contracts in the framework revealed that the affected distribution contracts are at Jos-Yola, Enugu and Benin distribution zones.
It learnt that the board of NDPHC, which is chaired by Vice-President Namadi Sambo, had subsequently ratified the contracts revocation.
Three of the affected contractors are Gibson Engineering and Construction Company Limited for Jos-Yola, Mogabs Nigeria Limited for Benin and Njonas Engineering Company Limited for Enugu.
They have also been served with letters of the revocation and asked to immediately vacate their respective sites, THISDAY further understands from the letters, which it obtained from sources at the presidency.


The three Engineering, Procurement and Construction (EPC) contracts include 33/11kV injection, 11/0.415kV substations, 33kV, 11kV and 0.415kV lines within Jos-Yola, Benin and Enugu distribution zones.
Also, when contacted yesterday in Abuja, the General Manager, Communications and Public Relations of NDPHC, Mr. Yakubu Lawal confirmed the recent development, but did not give further details.
The NDPHC revocation letters to the affected parties however cited clause 15.2 (a) and (b) of the International Federation of Consulting Engineers (FIDIC) 1999 Rules on termination by employers.


The FIDIC Rules state that employers shall be entitled to terminate contracts if contractors fail to comply with its sub-clause 4.2 on performance security or with a notice to correct under sub-clause 15.1.
FIDIC Rules equally empowers employers to terminate contracts if contractors abandon works or otherwise plainly demonstrate the intention not to continue performance of his obligations under the contract.
NDPHC had according to the letters to Gibson, Mogabs and Mjonas reminded them of its earlier notice, which was sent to them on July 17, 2014 to indicate their intentions to proceed with the contracts by showing considerable advancement in the projects within 21 days but which they ignored.


It explained that such actions left it with no option but to terminate the contracts and asked them to vacate the sites after handing over related goods and documents to it.
The Managing Director of NDPHC, James Olotu and its Company Secretary, Mohammed Mahmud, jointly signed the notice of termination.


Vice-President Sambo had, during a stakeholders’ meeting at his instance last year directed all distribution EPC contractors in the NIPP framework to complete their various jobs by June 2014, failure of which could result to revocation.
THISDAY equally learnt from the presidential sources that out of 290 of such distribution projects, about 199 of them had been completed, while the balance remain at various stages of work.


Also, NDPHC is understood to have initiated the process of evaluating its completed distribution assets with the new owners of distribution companies of defunct Power Holding Company of Nigeria (PHCN) in preparation for their handover to the new investors.
Similarly, the presidential sources told THISDAY that with the board’s approval of the revocation, some other revocation notices might be underway for some NIPP contractors whose jobs are currently being evaluated to determine their fate.
One of such “defiant” contractors the source said had a major transmission project in the eastern axis taken away from it for poor work ethics and handed over to a competent contractor that has also been given a completion deadline by NDPHC.


– This Day

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