A Review of the Nigerian Energy Industry

Revisiting the Rivers State power project

09 August 2015, Port Harcourt – The power project embarked upon by the River State government had been in the news lately. But keen observers of the issues at stake are of the opinion that the controversy surrounding the project is in pursuance of the political vendetta against the immediate past governor of Rivers State, the Rt. Hon. Rotimi Chibuike Amaechi, and the plot to ensure he is not appointed into any position of significance by the President Muhammadu Buhari administration.

Governor Nyeson Wike of Rivers State

Not a few believed that the smoke is from the fire discretely  ignited by Nyesom Wike regime, which has commenced another series of lies, outright falsification of documents and despicable abuse of the oaths process to throw dusts into the eyes of the citizens.
Vendetta? Yes, it is indeed a vendetta zealously pursued against Amaechi and his traducers care less if Rivers state remains stagnant because of that.   His sin is that he supported a competent, incorruptible and pan Nigerian citizen of Muslim, Fulani and Northern extraction to defeat an incompetent, oligarchical and weak leader that presided over a clueless and evidently corrupt administration. They did not and are yet to see the logic in his decision to do what is right in the interest of the nation instead of supporting a failed leader from the Niger Delta.
Their present focus is on the Rivers State Power Generation infrastructure and the Rivers State Specialist Hospital project. There are some basic facts the harbingers of hate and demonization of Amaechi failed to realise or they intentionally did not want to disclose to the Rivers people. These are:
The Amaechi administration inherited power asset of 236MW from plants at Trans Amadi and Obrikom; On assumption of office in 2007, the construction of 100MW at Obrikom was ongoing while a 30MW station at Onne was undergoing rehabilitation; The completed plants were operating at 20 per cent capacity due to maintenance and transmission challenges; In 2010, the Amaechi administration commenced the construction of 180MW power plant at Afam (This green field project that is based on Gas Turbine Technology is known as Afam 1 and contracted to Saipem, an internationally acclaimed power energy company of high repute. Note that the Afam Gas manifold owned by SPDC was already in existence and this project was designed to leverage on that); and in 2013, the administration commenced the construction of another 180MW at Afam to bring the total capacity there to 360MW.
With an almost 750MW installed power generation capacity in the state, the Amaechi administration embarked, through a cabinet decision, on the divestiture of 70 per cent of the assets across board to ensure sustainability, accountability and efficiency. The government off loaded 70 per cent of the assets to NG Power Consortium, which has consolidated itself as the largest power energy generation company in Nigeria. This company is the core owner and operator of Egbin Power Plant in Lagos.
The NG Power Consortium acquired 541MW, representing 70 per cent of the assets at a unit rate of US$800,000.00/MW and this amounted to US$302,400,000.00. The company remitted US$75,600,000.00 representing 25 percent of the proceeds to the state government in 2013. The balance was remitted in instalments over the next one year.
It is important to further note the following: All payments in the transaction passed through the Zenith Bank and the records are there for verification purposes; The entire transaction complied with standard Due Process provisions from the cabinet to the Ministry of Power to other agencies of government; Part of the proceeds was used to pay Saipem for the construction of Afam (11) plant; Furthermore, part of the proceeds was used to clear out contractual obligations in other ministries and agencies of government; Part of the proceeds was also used to settle obligations to Shell and AGIP for gas supplies to the power plants; and part of the proceeds was injected into the 2014/2015 budget appropriation.
The records are there in all agencies and parastatals and schedule of the withdrawals are available for the present regime in Port Harcourt to access and be well informed. It is pertinent for the Rivers State government to appreciate that in public financial administration, sources and application of funds is a continuum. Every revenue goes into the state coffers and used in appropriation depending on the developmental orientation and agenda of the administration.
The most laughable allegation by the confused propagandists of the Wike regime is the fruitless attempt at using the CLINORIV Specialist Hospital to smear the image of Amaechi. Nothing projects the lack of understanding of these agents of falsehood than their inability to understand how government projects are valued to determine money for work done.
The Rivers State government under Gov. Amaechi decided to build a specialist hospital in the state to save the government and people the huge amount of money spent in overseas treatment. It was a Public Private Partnership (PPP) arrangement between the state government and Clinotech Diagnostics and Pharmaceuticals Inc, Canada (“Clinotech”) for the building of a 1,000 room, 12 story specialist hospital in Port Harcourt.
These are the important facts: the government’s equity in the Specialist Hospital is 40 percent; Clinotech mobilized to site at the old University of Port Harcourt Teaching Hospital and commenced work on the master plan, design and commissioned consultancy works for the project; the state government contributed its equity share of N4.6bn to demonstrate commitment to the project; Clinotech reneged on its commitment of 60 per cent equity contribution siting global recession (However, the government carried on with the project because of its significant to the health needs of the state); and the government awarded a contract to Clinotech to construct the hospital on Turnkey basis for 24 months.

On the allegations made by the Nyesom Wike crew on this project against Amaechi, there is an interesting development:  Instead of making effort to recover the money already given to Clinoriv, the Government awarded a fresh contract to Clinotech.
This is true. For a specialist hospital of this magnitude, a Turnkey project is internationally recognized as the best form for procurement. This is the professional practice in specialized works of this nature, hence a Turnkey contract was awarded on 15th December 2008 to Clinotech for the following reasons:
Clinotch understood the vision behind the project and had demonstrated technical proficiency and commitment to the project by; mobilizing to three different sites to ensure successful project take off; expending substantial funds to complete the Master-plan, design and commencing substantial feasibility,  engineering, and topographical works on the project; mobilizing local and expatriate technical staff to the project
Hence, there was no money to recover as construction works had begun, substantial procurement and shipment of plant and machinery had commenced.
There was allegation that not even a single stone had been laid at the proposed site of the hospital up till today. This is false, completely malicious and misleading. One wonders if the present administration in Rivers State has bothered to read the project file and visit the project site. One can only draw the conclusion that the present administration is unable to carry out due diligence. There is documentation evidencing the actual level and cost of work done on site.
There is also evidence of cost of materials, plant and machinery as at March 2010 when Clinotech vacated the site. Details of work shows that site clearance was 100 percent; temporary access road/Driveway, 100 percent; permanent fencing, 41 percent; construction of residential facilities, 100 percent; concrete drainage, 10 percent; basement excavation, 36 percent; piling (17 points), 3.5 percent; hardcore, 6.5 percent.
Also, the statement of valuation of work also shows that technical and engineering works  is N753,750,000.00; total construction and residential  facilities   N361,416,716.00; plants and equipment on site N719,790,613.00;
personnel mobilization, staff and labor N517,500,000.00; materials on site N1,239,797,905.00; measured work N307,844,569.00; work done at old sites N168,513,139.00; while the total value of work done is put at N4,068,612,942.50
Hence, there is more than a single stone laid at site. Also the claim that Governor Amaechi out of criminal negligence or sheer connivance had maintained a studied silence for seven years without making any efforts to retrieve the money unlawfully paid to Clinoriv for the failed hospital project is completely malicious and typical of the present governor of Rivers State who has no vision to develop the Rivers people, but whose sole agenda is to tarnish the reputation of Chibuike Amaechi. The truth is that Governor Amaechi personally instigated an investigation into the financial activities of Clinotech in the project.
On 5 March 2010, the governor reported a case of alleged breach of contract and fraudulent diversion of funds to the Commissioner of Police, CP Suleiman Abba.
The Rivers State Executive council appointed the firm of Utchay Okorji to perform an inventorisation exercise of the construction site.  According to the report, the ground total cost of all direct and incidental items on site was valued at N2,314,134,140 (two billion, three hundred and fourteen thousand, one hundred and thirty four thousand, one hundred forty naira only).
Additionally, the government engaged NUGI Limited to perform a Technical Audit of the quality and value of the work done as at the date Clinotech vacated the site.  According to the report, the total value of work done and materials on site was N4,068,612,942.50.  (four billion, sixty eight million , six hundred and twelve thousand, nine hundred and forty two naira, fifty kobo.)
These are verifiable facts any citizen can access. While they are cracking their brains on how to stop Amaechi from holding any important position in Abuja, the Lion of Ubima is taking life easy and putting his life in God’s hand.  God is the only giver of power not man.


-Vivian Ngozika and Kennedy Friday, This Day

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