Uncertainties Mount over Power Projects.

Apart from gas challenges which are now being resolved, administrative and logistic issues are threatening to hamper the much-trumpted desire of the Federal Government to improve electricity supply in the country.

Contractors under the aegis of Electric Power Foundation of Nigeria, who are handling the various projects contained in the National Integrated Power Projects (NIPP), yesterday raised the alarm over the auctioning of imported power equipment by the Nigeria Customs and “undue delay” in the clearance of the equipment.

The contractors also alleged that security agents delay the movement of the equipment across Nigerian roads, adding that on one occasion, a truck load of transformers heading to Bayelsa State for NIPP project was offloaded along the road on the orders of the operatives of the Joint Task Force (JTF).

These developments, they warned, could further delay the expected improvement in power supply across the country.

Chairman of the Electric Power Foundation, Mr. Otis Anyaeji, made these disclosures in Lagos at the 2nd Worldstage National Power Conference.

The projects under NIPP are expected to contribute nearly 5000 megawatts to the country's power supply - a figure that is higher than the current total output by existing plants.

In a paper titled: “Achieving Presidential Action Committee on Power Mandate: Contractors Input”, Anyaeji noted that the delay in clearing imported equipment was aggravated by multiple government agencies working at cross purposes at the ports.

Anyaeji, who is also the Chairman of the Institute of Appraisers and Cost Engineers, further stated that the delay in clearing imported equipment at the ports had resulted in the delay in delivery of equipment to project sites, higher project costs, time slippages and non-availability of electricity to Nigerians.

He decried instances where imported NIPP equipment were auctioned and appealed to the Presidential Task Force on Power to address these challenges as part of its mandate of “engagement with other government agencies to resolve roadblocks and bottlenecks to facilitate progress of project and also reporting and escalation of all identified risks that can work against schedules of project delivery and take actions to mitigate their impact”.

Anyaeji, whose paper was presented by Mr. Ismaila Saliu of OT Otis Engineering, said the greatest hurdles against the implementation of NIPP were the difficulties encountered in the clearing of imported equipment, adding that many government agencies are working at cross purposes.

“To clear imported NIPP equipment, we find that we have to deal with so many agencies, each making ridiculous demands. There are cases of auctioning of imported NIPP equipment. ‘NIPP’ is very clearly written on all NIPP equipment and these are equipment meant for projects that are funded by the federal, states and local governments, and yet, the Nigeria Customs auctions some NIPP equipment,” he said.

He noted that the Nigeria Police and other security agents also delay the delivery of equipment to the project sites, disclosing that the managing director of Niger Delta Power Holding Company, operators of NIPP, had to seek the intervention of top officials of the security agencies before some operatives of the JTF could release a truck load of transformers that was intercepted on its way to Bayelsa State, recently.

Meanwhile, the Central Bank of Nigeria (CBN), as at the end of February 2012, had disbursed a total of N85.7 billion to private investors handling 18 power projects across the country as part of the apex bank’s N300 billion intervention fund for power and airline sectors, which was established in 2010.

Governor of CBN, Mallam Sanusi Lamido Sanusi, stated this yesterday in a paper titled: “Progress Report on CBN Intervention in Power Industry Funding”.
He noted that during the period under review, 28 applications were received by the apex bank from investors who expressed interest to access the intervention fund, while 18 of these applications were approved, representing the 18 projects that are being funded.

Sanusi further stated that about N25.7 billion was provided for the 18 projects by the promoters of the projects, who account for 30 per cent of the project funding, in accordance with the intervention fund guidelines.

The CBN governor, whose paper was delivered by a Deputy Director in the apex bank, Dr. Muda Olaitan, said the intervention fund, which could be accessed through the Bank of Industry (BoI), had achieved its objectives.

According to him, the fund had achieved its primary objectives of providing long-term financing for the private investors in the power sector and also reducing interest rates.

He also noted that the interest rate is seven per cent, against the industry standard of between 22 and 19 per cent.

“As at February 2012, beneficial investors have made savings of N6 billion because of the reduced interest rate. Under this scheme, loans are given on long-term basis, thereby creating stabilising effects on the capital structure of power projects. So, investors need not to run around to pay because they have up to 10 to 15 years to pay back the loan,” he said.

“The objective of the intervention fund is to ensure that long-term credit is available to the private sector at affordable interest rate,” he added.

Sanusi stated that the CBN intervention fund had added 349.2 megawatts of electricity to the national grid, through the various projects already completed.
He disclosed that commercial banks could be sanctioned by the CBN for failure to disburse the fund to private investors. (ThisDay)