Gas supply challenge stalls FG’s N10bn NIPP projects — NERC

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BY CHRIS OCHAYI

ABUJA — The Nigerian Electricity Regulatory Commission, NERC, has said that the over N10 billion invested by the Federal Government to secure over 5000 megawatts of electricity under the Nigerian Integrated Power Projects, NIPP, in Niger Delta areas was wasting away due to gas supply challenge.

Chairman of NERC, Dr. Sam Amadi, who disclosed this at a forum of Enugu Chamber of Commerce, Industry, Mines and Agriculture, said most of the projects were struggling to commence operations because gas supply was not adequately considered before the procurement.

He said part of the problems in the sector was the fact that power plants were being established without due regard to gas supply or transmission capacities.
He said:  “Today, we have power plants proposed or being built in places where there are no gas transportation and transmission facilities.

“The case of the Nigerian Integrated Power Project, NIPP, comes to mind. Government invested over N10 billion to procure over 5000 megawatts in the Niger Delta area without proper planning about gas supply and transmission facilities.
“Today, despite the plants being commissioned, because of gas supply challenges which were not adequately considered before the project procurement, most are struggling to commence operation.”

Amadi recalled that since the enactment of the reform Act in 2005, “we should by now have procured more than 7000 megawatts if we had prudently implemented power procurement as required by the Act.”
The Act, he said, provided a framework for procurement of power and other services  to ensure prudence and transparency, stressing that this process had not been followed, though the NIPP was well intentioned.

“The former President Olusegun Obasanjo’s government took the bold initiative of setting up independent power plants in the Niger Delta states as a strategic response to both the energy and Niger Delta crisis.
“But unfortunately, the NIPPs had been a byword about how not to manage a project in the power sector. It starts with process of procurement that lacks transparency and accountability.

“Thankfully today, the Jonathan administration has repositioned the NIPPs such that they have been commissioned and we expect to have additional 5000mw capacity from them,” he said.
Emphasising the effect of defective procurement in the sector, Dr. Amadi said since 1999, over N20 billion might have been spent on various projects to boost electricity.

According to him, part of the problem was that process for procuring the services was neither transparent nor prudent.
“They did not go through regulatory review. Since the regulator did not approve these projects he cannot establish whether they were procured at all or at reasonable prices.

 

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