By Hector Igbikiowubo
MR. Biyi Sangowawa, the executive director (operations) of Rockson Engineering is a seasoned engineer and an executive director of Rockson Engineering Company Limited, a renowned engineering company with a reputation for efficient delivery of projects.
In this interview with Hector Igbikiowubo, Editor of Sweet Crude, he brings us up to date on the hitherto beleaguered attempts to get gas turbines stuck at the Onne port in Rivers state across the Imo River to 1,074 MW power plant near Ala-Oji and the state of development at the Egbema, Omoku and Gbarain-Ubie power plants, all being handled by the company.
We noticed you have finally been able to get the gas turbines across the Imo River bridge, can you give us a fair idea how you were able to accomplish that feat given the well known constraints?
I would like to thank the president, the vice president of the federal republic of Nigeria and the steering committee. In March, the vice president visited Alaoji and at that occasion in question, he made a commitment that within a particular period, they will find a way forward for the Alaoji project to continue. You will recall that we have had two years delay in the execution of the project because of this issue of Imo River bridge.
Since then, the federal government and NIPP have worked with us to look at the issue of the river crossing, the contract terms and they made guarantees to us which we were able to pledge with our banks and we were able to start the process of constructing a ramp. It took us about two months to construct.
We originally planned to do this in four months but we had very good cooperation from both the Rivers state and the Abia state government and the local governments involved, and all the people around. We have been able to even transport within two weeks as against four weeks originally planned. We have made a lot of savings in time and this is despite the heavy rains in June and July. Based on that, we see a way that within the shortest possible time, say between 6 to 8 months we should be seeing at least one of the plants being fired if gas is available.
The government is working on all these constraints; we still have about 700 containers of equipment at the port and we are working to remove these constraints.
The way the government is being proactive gives us the impetus to work and one of the things we are going to do is try and work overtime to move the project forward. Because of the time it took government to act on the turbines that were stranded at the port, some equipment that were expected were delayed. But at the rate at which things are progressing now, when the new equipment that are being expected come in, it will be like a plug in and play situation. We believe that since the project has recommenced, we should be able to generate light in the very near future.
You talked about 6 to 8 months time frame to generate power from the Alaoji plant. How many megawatts do you see being generated from the Alaoji project then?
The Alaoji project is supposed to generate about 1074 Megawatts (MW), but this will come in phases. The first phase will be the simple cycle and we have four units of 120 megawatts each. Each unit will be coming up one after the other and it is the first unit that I am referring to when I say 6 to 8 months.
There are some things we cannot fast track. For example when you do a foundation base, when you cast, you have to wait for 28 days before you can put your physical equipment there. There are some equipment we have to pre-commission. What we can always do is that once we have the materials we make sure that men are mobilised to start work. But now the things that will help us to achieve mileage are the release of the power supply equipment stuck in containers at the port within the next three to four weeks.
The NIPP is working with the Central Bank of Nigeria, the standing committee; we are working with the shipping companies, Customs has released the goods. We hope that with all these efforts around the project, things will move on quickly. We have been able to demonstrate our commitment with the Imo River crossing, we only signed the contract on June 30th but by first week of August, we have achieved this much.
What exactly has government done? Is it to give you a bankable guarantee or what?
What they do is that they establish a letter of credit. It is important to note that 70 to 80 per cent of the input for the project is imported goods and when we are buying, the manufacturers want guarantees that if they start manufacturing a product that will take nine months, at the end of the period, they will get their money.
It is not necessary that cash must be physically in their hands. There are some that we have paid money for and we have financed with the banks. Government is releasing money in stages to meet this kind of payment and because of the improvement the banks have a positive disposition towards the project. We see it as a partnership working together.
In the media we noticed there was some measure of harassment from the House of Representatives under the guise of a probe. Has that stopped? Are you getting any cooperation from them?
When the House of Representatives gave indication of visiting and reviewing the project, we looked at it as a complement and that this was a good thing because everything in life must be auditable. You must be able to audit the process, you must be able to audit the awards, and as we have seen in developed countries, having oversight over budget by the House of Representatives or the Senate is a good thing for a process.
We did cooperate and we know there may be areas where things may have needed improvement because there were things discussed before the visit to site which shows that there was some documentation which we needed to ensure were in place. For example on contracts we needed to show what was in place, if there was any modification to the original schedule, we needed to approve it and finally transfer this into some form of agreement.
We actually did not get any harassment but for the negative information in the press where people were being misquoted as saying there was nothing on site.
This was very demoralizing, especially to our workers because some of them had been working on the site for three to four years. It took a lot of effort to get their spirits up again to continue this work. We would implore that future audits by either of the Houses should be done with some element of looking at the documentation like when you have information that a letter of credit had been open and you have done 10 per cent of it, yet somebody says no you have done 100 per cent whereas the money is still with the Central Bank of Nigeria. That is something we need to make sure is reported in the actual sense of it. Everybody knows that if you open a letter of credit you must back it 100 per cent with cash.
That is different from whether the LC has been plundered or not. That is the kind of clarification we expected at the meetings. Another problem is the issue of the compensation. There are lessons we can learn from it. The payment of compensation was not an issue at the time the contracts were awarded but for future projects we think this is one of the issues that need to be looked at.
As we speak there are compensation payments that are yet to be done. For the ones we are working on we actually paid compensation. For Alaoji, we paid in 2005 and we are just about to be refunded this money. You can then imagine if we had not paid the original owners the initial compensation for the land and economic crops, the project will not be anywhere now.
You mentioned other projects involving your company and I know you are handling about five of them, can you tell us the status of all of them?
We are handling a power plant at Alaoji, Gbaran, Omoku, Egbema and a sub-station at Owerri and then the transmission line. For the sub-station and transmission line, we have not been able to do any work on site. We were driven out in 2007 from the Owerri site and what we understand is that government is in the process of releasing funds to pay compensation on these particular projects. The ones for the power plants, we paid them and we have been refunded all of them except the one for Alaoji because of the contractual issues.
What is the level of work done so far at the other sites? What exactly is the level of completion?
I would say 80 per cent completion at Gbaran, at Omoku it is about 60 per cent, at Egbema it is about 75 per cent. Egbema has all its turbines installed but we have a delay because General Electric has to move people to support the pre-commissioning stages.
At Omoku, for the contract, there is still a lot of money being owed. The contract, there is additional land involved for it to be completed and we are moving towards this. We see a situation too at Gbaran. As you can see that is a far cry from when the legislators visited. There is a lot of improvement.
What is the level of completion of phase one of Alaoji?
For phase one of Alaoji, it is very difficult to determine because we have some common services and there is a lot of work that we have put in for the combined cycle. For example, we are constructing 12 million litres of water reservoir for the combined cycle which is not necessary for phase one start up.
The phase one is about 85 per cent complete with the turbines on site now. By the time the turbines are placed and all the other ancillary items installed, we will be getting into a pre-commissioning stage. At the pre-commissioning stage, that is where the original equipment manufacturer, General Electric has to come in. At Alaoji, all the transformers are already installed, just waiting for the pre-commissioning. So some major equipment will be ready for commissioning in the 4th quarter of this year.
Earlier, you talked about gas supplies concern. Can you throw some light on this?
At the meeting we had with the presidential steering committee, the contractor of NGC (Nigeria Gas Commission) had some issues similar to what we had at Alaoji, were some equipment are imported but they are at the ports because there is difficulty clearing it and contractual documentation is not upgraded.
The government is going to look into it and the steering council is even having a meeting next week Monday to address gas issues for all the projects. Based on the projection following the visit of the vice president to Alaoji in March, if we had gotten a commitment some months ago, by now we should have moved along substantially in the assembling of the equipment. This is why I mentioned six to eight month.