DR. Emmanuel Eweta Uduaghan, is the executive governor of Delta state, a major oil and gas producing state noted for several positives but like its neighbouring states often caught in the eye of the storm  militancy, pipeline vandalism and piracy.

In this interview with Hector Igbikiowubo, Oscarline Onwuemenyi and Abayomi Adeshida of Sweet crude, he provides insights on efforts to turn around the fortunes of the state via the deployment of 13 per cent derivation. He also allays concerns over the capacity of the host communities to manage the anticipated allocation of 10 per cent equity, noting that the communities have evolved over the years given the kind of relationships they share with the multinational oil companies.

Excerpts:
Delta state is one of the largest oil and gas producing states in Nigeria. When we talk about oil and gas we talk about the ability of the companies operating in the area to carry on their activities without any hindrance whatsoever. Lately, you’ve been in the news as regards your efforts to put in place an atmosphere conducive for these operators to carry on their business. Do you see anything in the immediate horizon that can hamper the smooth operations of the oil and gas companies?

Well, the simple answer is no. Instead, what I see is more of the peaceful environment that we have created for companies to thrive. The insecurity we had is being managed both at the Federal level and the state level  the preparation of the amnesty by Mr. President and acceptance of the amnesty by militants, and all the post- amnesty arrangements are bringing peace to the area.

In actual fact, the oil companies that used to fly their workers to their various installations before now because of the difficulty they had in the waterways have now started taking their workers by boat. They are now doing crew-change by boat instead of by air which was quite expensive for them. They are doing that now because of the peace that has come as a result of the amnesty. There is really nothing on ground now that could hamper any oil company or any organisation for that matter, in operating in that area.

There has been talk about the government allotting 10% for host communities. The concern now is that could cause internal strife amongst these host communities. Is there anything in place to guard against that possibility, or are you working on anything to get the communities to organize against such an eventuality?
Yes, the truth is we have made our position known to the Federal government. The offer is coming from the Federal government; we do not have any control as a state government. They are divesting 90% of their 60% ownership and giving 10% to the communities. The question is how to manage this.

Now, the fact is that the communities are already organized; over the years, the oil companies have been dealing with the communities, so the structures are in place. Chevron has its own way of dealing with the communities and so does Shell in their operational areas. And there is what we call the Oil Producing Communities, the Oil Impacted Communities as well as the Satellite Communities as far as the oil operations are concerned.

These communities have been grouped like that and the oil companies have been dealing with them; it is a structure that evolved over time. Initially, there was distress, inter-community problems, intra-community problems, and later inter-ethnic crisis. But with time, the system has evolved with the oil companies now knowing which communities are what; the NNPC also knows. it is not a problem because people outside the communities are now using it as a campaign that if you give these people this equity, they will fight themselves because the communities are not defined, but that is not true: the communities are defined, and the oil companies deal with them. They should consult the oil companies and they will be able to determine the communities and how they are organised.

Let’s look at how you deploy the 13% derivation the state gets. We are aware that, unlike some other oil producing states, Delta state has DESOPADEC in place. There were issues with the management of the commission which led to your intervention. Can you tell us the state of affairs at the moment?
Over the years the various communities in the oil producing states have been agitating that this money should come to them directly. Of course, this is not possible. So what we did in Delta state is to say that since we cannot give them the 100%, let us give the communities 50% of the derivation which goes to the Delta State Oil Producing Areas Development Commission (DESOPADEC), which is manned mainly by people from the oil producing communities.

So they determine the projects they want to handle and award the contracts as well as execute those projects. The thing is that with a new outfit like that, there are bound to be problems. It had its initial teething problems because some people saw it as an opportunity for them to take their share of the national cake, which led to some areas getting an unfair share of the projects.

That was why I had to move in to settle that. Again, the reason I insist that the 10% equity will not cause any problem is because DESOPADEC is structured in such a way that whatever gets to you depends on your oil production quota. So the state itself has been dealing with that since the Commission was created and it has not caused any problems. Every community knows how much oil it produces, and the NNPPC has a record of the oil produced by different communities. I need to emphasise this so that nobody will use it as a campaign to distort the 10% equity.

Let’s look at the PIB, which is currently at the National Assembly. Initially there were concerns that the bill was not designed to address the problems communities in the Niger Delta. I know that during the hearing some presentations were made by communities, including communities from Delta state. Are you satisfied with the way and manner the PIB is structured?
I am aware that the final structure is being determined by the National Assembly and I cannot confess that I have an inside information about what they will finally come out with, but I have an inside information about what we presented to them. The aspect of the PIB that we as governors of the area representing the people put forward was that this (the bill) was an opportunity for the oil-producing communities to participate in the oil business and it is the non-participation of communities in the oil business that is one of the major causes of the crises we all experienced recently. Now, the communities have an opportunity to participate actively, and we would like to thank President Umaru Yar’Adua who has also expressed his willingness to divest 10% of equity of oil resources.

We have asked that the 10% equity, the structure of the communities as well as the management of the Fund be included in the PIB. On the management of the 10% equity, we are saying don’t give it directly to the state or local government, but create a trust fund and get international fund managers to manage it because of its size. These managers, we expect, would put the money to good use so it can yield interest. It is the interest from the investment of this money that can now be given to the communities.

There are oil producing communities outside Nigeria, say Alaska for instance, where the people get some money annually apart from the money used in the overall development of the communities. What this does is that the principal is there constantly, it is the interest that is utilised so that even after the oil finishes the principal still remains and the communities continue to benefit from the equity fund.

Basically this supports your campaign for community participation, which you have championed since the coming of your government?
Yes, it does. What we are saying is that if communities had equities in Shell or Chevron since they started operations in Nigerian many years ago, and they are able to get interests from these equities, the communities would have been like what you see in Dubai.

You said 50% of the derivation goes to the oil producing areas through DESOPADEC, what of the other 50%.
The balance of the fund, of course, goes into the development of every part of the state including those that do not produce oil. It is very important that we ensure a balanced and equitable distribution of developmental projects, and you must also consider the huge manpower requirements and the wages we have to pay. Essentially, we are envision or are trying to create a Delta State without oil. This means that if the oil finishes tomorrow, there has to be something to sustain the economy, and this can only be achieved if we are able to create an enabling environment for investors to come in.

Gov Uduaghan receiving Mr. Hector Igbikiowubo, Editor Sweet Crude

This include peace and security, infrastructure like transport network, power, ICT, urbanization and tourism. On the issue of power, we have already started our power plant, which will provide 100MW of electricity and would be upgraded to 250MW, in addition to our over N15 billion contribution to the National Independent Power Plant, we have already paid our own share.

In the area of transportation, our government is already constructing the Asaba Airport which is designed to take advantage of the big market at Onitsha; so it is going to be both a human and cargo airport. There is also the Osubi Airport, which we agreed with Shell to construct a 4km second runway thus making it one of the only airports in Nigeria with two runways. We are equally taking on Federal roads in the state that will be of benefit to us in attracting investments into the state.

One of such major roads is the Asaba-Ughelli road, which we are currently dualising, since the Federal government is dualising the Warri-Port Harcourt road, so that when importers bring their goods through the Warri ports, they can move it through the dual-carriageway straight to Onitsha, instead of bringing in goods from Lagos and having to traverse the Shagamu-Ore-Benin road, which is not entirely in a good shape. Another one is the Ughelli road which we are also dualising so that people can use the use when moving good from the ports. We are also committed to ensuring that the ports in Delta state become very active. To that extent, we have embarked on the construction of a 46km deep sea coastline where anybody can come and invest, also providing one of the deepest ports in the country which will be the shortest distance when importing or exporting out of Nigeria.

On ICT, we are starting our ICT village very soon and we are working hard to make our cities and towns habitable for investment. Sometimes, when foreign investors don’t find a city habitable, even when they invest they choose to fly their workers to and fro. We are saying come in and live in our cities; that’s why we are beautifying the cities and towns and lighting up our streets and villages in the day and at night. We also want to make it possible for anyone moving from one part of the state to be able to achieve that in less than an hour, that is why we are repairing and expanding roads in the towns and communities. We are decongesting the cities and ensuring that we don’t have the kind of traffic jams that you see in other states.

The government is also doing a lot to grow the tourism industry: we are developing a water-theme park which is going to be one of the biggest you would see in these parts. We also want to develop medical tourism so that people can come from all over the world to Delta state to have their medical needs met in a relaxing and luxuriating environment. It is a fact that when people come in to take advantage of the superior medical infrastructure in our state, they get to spend money in other ways when they stay in hotels or shop in the city. This is one thing India has been able to do and they are reaping a lot from that sector. We are building one of the best equipped medical centres in this country, soon to be commissioned by President Yar’Adua. In addition to this, there are many private hospitals such as fertility centres that are being built in the state, and we are encouraging such investments.

We are also providing social amenities in the form of education, electricity and potable water; we are building women and children-centered health institutions, as well as providing free medical services to aged people above seventy. We also give free registration for students writing WAEC and NECO examinations, including the scholarship and bursary programmes we run for students in the state.

In the area of sports, we believe that Delta state has one of the best stadiums in this country, apart from the National Stadium in Abuja. Add to the fact that we have more stadia in the state than 10 to 11 states put together  that shows that we are doing a lot in the area of sports. Now you see what we are doing with the other 50% from the 13% derivation.

What is the state of the IPP in the state? How soon do we expect it to be up and running?
We are tackling it through various sources. We have the major one which is to electrify all the rural communities and connect them to the grid, by using very high mast to achieve that. We have finished the first phase and would soon embark on the second phase of the programme. It is a very expensive project, but we are determined to carry it through. We are also trying to partner with some of the oil companies to provide generators and plants of one or two megawatts that can power small communities. People talk about solar energy, but we have found out that the Niger Delta area is probably too humid for the panels to survive. All the solar panels we have used for previous projects including street lighting never really fared well.

What are you doing in the area of providing decent and affordable accommodation, especially for urban dwellers in the state?
We are looking at the housing issue from two areas. Basically, housing provision in the urban centres are commercial houses, and we are encouraging private investors and estate developers to come and build by providing land in strategic areas of the cities. For the rural areas, we are doing what we call the New Town Development for the rural areas.

Through this project, we go to the communities and build houses, in the aftermath of the amnesty in the state, we are even going the extra mile of rebuilding communities entirely and providing all the basic amenities that would make life worth living. This is especially for those communities that were affected during the crises. Because many of the houses were affected, we are virtually scraping everything away, sand-filling it before starting to rebuild the communities in both the Ijaw and Itsekiri-speaking areas. We’ve also totally rebuilt roads, schools and have provided electricity and water, thereby creating brand new towns and communities.

You participated in the recent Nigeria-South Africa Bi-Commission, can you mention some immediate success the state has gained from being part of the conference?
Before now, we’d actually been getting some investors from South Africa to do business in Delta state. I must also add that equipment for the hospital I talked about earlier, were brought in from South Africa. Also, the SAP system for the management of our finances came from the country, and people who are managing it go to South Africa for training. With regards to the conference, we have had people who were at the conference who made enquiries about our oil and gas bearing in mind that we have a lot of that in the state. They also wanted to invest in agriculture, especially aqua culture, and tourism in the state and we are following up on that to ensure that our people get only the best from such participation.

What plans does the state have to increase its internally generated revenue (IGR) aside from derivation from oil and gas production, especially given the charge by the Federal Minister of State for Finance that states should depend less on allocations from the centre?
We discovered that we had some loopholes in the tax system in the state, such that even taxes collected from government workers never made it to the government coffers and we have worked quickly to block those loopholes so that all the taxes that are collected are paid into government coffers. One of the easiest ways we have done that is arrange to give everybody a tax certificate once they have paid their taxes since it is their entitlement.

This also makes it easier to find out how much people have paid over a period. If tax payers are giving tax certificates, they have records to prove that they are indeed paying tax, and it makes it easier for regulators to monitor the income of tax in the state. I must add that our plans are quite aggressive and comprehensive because apart from the PAYE tax, we also plan to charge tax on some services for those who can afford it. We expect to grow our IGR in the years to come.

On the comment of the minister, let me correct an impression. States do not depend on the Federal government. Rather, it is the Federal government that depends too much on the states. All the money the Federal government has comes from the states. I believe the Federal government should lead by example and show the way. It should put up the necessary infrastructure such as power and good roads. Social infrastructure like power and roads are responsibilities of the Federal government, but many states have had to contend with those, too.

For instance, the roads my government has decided to rehabilitate are Federal roads and we are spending state money fixing them. This applies to the airports and sea ports, which should be the Federal government’s responsibility but we are spending state money constructing them.

If the Federal government puts up the requisite infrastructure, the states would be better positioned to attract the right investment. I believe the state can generate more IGR if the Federal government would do what it ought to. However, we are looking at other proactive and pragmatic ways that will enhance our IGR, towards providing better quality life for our people.