- Gives A Blow-By-Blow Explanation Of His Power Projects
Last week, President Muhammadu Buhari accused ex-President Olusegun Obasanjo of wasting $16 Billion dollars on Power without anything to show for it. And in his reply, OBJ referred Buhari to certain chapters in his memoirs, MYWATCH which deals directly with the issues Buhari raised.
Below is OBJ’s detailed explanation in Chapter 41 of his book when the Senator Ndudi Elumelu led Power Probe panel at the National Assembly-invited OBJ in May 2008 to appear before it.
“Let me go to the points that will give an insight and perspective into what I know and my role in the execution of projects from 1999 to 2007. What was the position of Power in May 1999 when my Administration took over?
The following is the summary: a. Non-serious investment in Generation and Transmission between 1981 and 1999, a period of eighteen years, except the completion of Jebba and Shiroro hydro power plant which my military administration began and Egbin thermal initiated also by military administration all of which were completed by President Shehu Shagari administration. And yet, for a developing country like Nigeria, we should be increasing the rate of our power generation as close to the rate of our population increase as possible. Our Administration thereby inherited 18 years of non-investment in power generation and seeming apparent neglect of the sector. Serious determination to understand where we are and how we are in the power situation today must understand this background.
- Although 6000 MW capacity was claimed in 1999, only 1500MW was being generated. Ijora and Oji River thermal based on coal have completely closed down for lack of coal production and early gas thermal units at Afam and Delta were obsolete and needed replacement.
- The hydro power plant of Kanji, Jebba and Shiroro suffered seriously from silting and/or inadequate flow of water into the dam and poor maintenance.
- The Egbin thermal unit suffered from disruption of gas supply through vandalism and poor management and maintenance by NEPA staff. e. Because the transmission system was not a closed loop, any disruption by vandalism or any other cause meant power would totally be cut off from the part of the country affected. f. NEPA was a den of monumental corruption and malpractice which were deep and widespread and revenue generation was grossly below expectation. There was massive illegal connection and avoidance of payment of bills.
This situation was not thoroughly understood, identified and clarified until after the first 2 years of my first term. Late Chief Bola Ige, who was my first Minister in charge of Power and who, by any standard, was a bright and smart person, thought he could deal with the problem of power within 6 months and he made such public pronouncement to the world. But after 12 months, he could not unravel, in details, the problems of NEPA let alone proffer a satisfactory solution. It was not because he did not try, but rather it was because NEPA was cloaked in near mystery.
After late Bola Ige was moved to Ministry of Justice, Dr. Segun Agagu took over and, with him; I paid a little more direct attention to the power issue. I was surprised, after one year, to discover the situation described above.
With such discovery, we sprang into action. First, NEPA leadership had to be changed and we brought in an accomplished Engineer from the private sector, in the person of Engr. Joe Makoju to assist with giving the organisation the leadership it lacked and to shape up the entire structure of organisation and change their attitude and orientation. The aim was to sanitise and reposition NEPA to perform its roles, functions and duties to the nation. Then, we started to tackle the issue of repairs, maintenance and replacement.
In replacement, we started with Afam where a new 276MW thermal unit was installed and commissioned.
We requested the Oil Companies to join in providing power to sell to NEPA. Mobil Oil started talking to us locally but due to lack of interest from their Headquarters in the US, they gave up. In spite of all efforts in this direction, only Agip Oil showed enough concern and commitment to build a 480MW thermal unit with transmission line to the grid system which I commissioned at Okpai. Until I left government in May 2007 and, in spite of pressure on the Oil Companies, no other Oil Company made commitment in this regard to the point of commissioning. It must also be mentioned that the delay in getting the Energy Regulatory Bill passed by the National Assembly also contributed, in some way, to the private sector slow commitment to power generation. In spite of power being on the concurrent list in our Constitution, only Rivers State paid serious and appreciable attention to power generation and transmission, Akwa-Ibom followed later with Federal Government support.
Meanwhile, we embarked on building Thermal Units in 4 locations where existing gas pipelines are sufficiently close to minimise cost of gas provision to these sites. These sites or locations are Papalanto, Omotosho, Alaoji and Geregu. Each of these sites could be made to ultimately provide close to 1000MW It must be remembered that the first term of our Administration started with the price of oil at $8 to $9 per barrel. Our budgets were not realised due to poor revenue intake from oil. For these four locations, we had to seek loan from China at concessionary rate to support two of the sites. Three of these sites – Gerengu, Omotosho and Papalanto – were built to the point of commission before I left government in May 2007. As at today, Papalanto, Omotosho and Geregu are generating power for the grid. Gas pipe vandalisation has affected them all. Since they were to be expanded, there was work continuously going on for adequate gas provision, transmission and additional turbines to reach the ultimate magnitude or capacity of about 1000MW each. The problem of vandalism of gas pipelines remains with them as with Egbin.
During our Administration’s first term and going into the early part of the 2nd term, we studied all the available and possible sources of power and energy. These include Solar, wind, tide, biomass, thermal from gas, thermal from coal, thermal from nuclear and hydro. We realised that technology for mass production of power from solar, wind and tide is still some distance away, and, therefore, the unit cost is prohibitive. They will do for small holding or domestic use and we instituted concessionary policy to encourage such domestic or small-holding installation and use.
For large scale power production, we are left with Thermal from gas, Thermal from coal and hydro. We set for a 20-year programme of nuclear energy only after we have almost exhausted what we can obtain from other thermal sources. After a visit to Omoku where Rivers State was building a thermal unit close to an Agip gas source to eliminate long distance gas pipelines that could be subjected to vandalism, we embarked on the study and search for similar available gas sources close to which other thermal plants could be located. 6 of such sites were located at Sapele (Delta), Ehobor (Edo), Egbema (Imo), Gbaram (Bayelsa), Calabar (Cross River), Omoku (Rivers). That is the beginning of what is today called NIPP. It would be short in gas pipelines but might be somewhat long in transmission to grid line.
We have to coordinate and harmonise 5 aspects of the building of generation and evacuation unit in each site – turbine, gas provision, civil works, electrical station and transmission or evacuation. Unless all these are synchronised and brought together, expenditure on four, leaving out one as uncompleted, will still leave out power generation let alone having the power at our homes and factories. No matter what resources you may have, it will take a minimum of three years, if there are no interruptions or disruptions and with hard driving, to complete anyone of these units. Without hard driving and without any disruption, it may take up to 5 years dy-there is loss to our economic and industrial growth and, every month that the contractors are wittingly or unwittingly prevented by whatever reason or excuse from embarking on their jobs, Nigeria will pay more. The hold-up and the delay that have attended the projects in the pipeline since May 2007 will, by my estimation, cause the nation not less than 25% more by the time the works are completed. There is the danger that some of the equipments, particularly the turbines that are now at the port and elsewhere in the country may suffer deterioration if not kept in a special storage facility. And they may have to be replaced or refurbished at a very high cost before they can be installed.
The private sector will have to be involved in helping to provide these either as contractors, suppliers or public-private partnership. We cannot criminalise them, antagonise them, disgrace them and expect to get the best support and cooperation out of them.
Most of the contractors and suppliers are companies and organisations with tremendous reputation and most of their management and staff are men of honour and dignity. They deserve understanding and respect. Most of them, as far as I know, have carried out the task consciously and committedly.
In summary, when our Administration came in 1999, we met 7 power stations – Kainji, Jebba, Shiroro, Egbin, Afam, Sapele and Delta – all together in different stages of disrepair and obsolescence, generating about 1500MW.
By 2007, we had added 6 new stations as follows with the 7th almost completed at Alaoji: (a.) Okpai in Delta – 480MW by Agip (b.) Afam II – 276MW (c.) Omotosho – 330MW (d.) Palalanto – 330MW (e.) Geregu – 414MW (f.) Ikot Abasi- Ibom Power -145MW – to which Federal Government is a partner. (g.) Alaoji – 545MW (h.) To these must be added about 2000MW produced by Rivers State (i.) We must also take cognizance of the heavy rehabilitation works in all the existing power stations: increasing their available capacity significantly.
There are 6 NIPP projects in the pipeline and the expansion of Omotosho, Papalanto, Geregu and Alaoji to about 1000MW each by combined cycle and 2500MW from Mambilla.
In other words, in eight years of our Administration, we have provided 6 new power generating units of almost 2000MW.
There was no transmission work embarked upon between 1982 and 2000. But by May 2007, we had taken transmission to Bayelsa State for the first time, double the transmission from Shiroro to Abuja to ensure stability of supply. We have also awarded all the transmission contracts to close the transmission loop and ensure that vandalisation of transmission or any fault in the transmission line will no longer keep any part of the country in the dark if there is adequate power generation. This is to ensure stability of power supply nationwide. At the same time, we have embarked on prepaid meter system to reduce non-payment of electricity bills and eliminate unauthorised connection. We moved from revenue generation of about N2 billion per month in year 2000 to about N7 billion per month in 2007. Repairs on the pipeline that was vandalised in February 2006 and which began immediately were completed only in March 2008.
Finally, let me come to the quantum of money spent on power from 1999 to 2007. Various figures have been bandied around ranging from US$4 billion to US$16 billion. They may all be right or they may all be wrong depending on what anybody takes as expenditure most of which is constant. No matter what amount of power is generated, transmitted or distributed, your figure can be as high as you want to make it.
That figure will include personal emolument of staff, pensions, gratuities, transportation, maintenance, rural electrification, etc. If you take staff emolument, etc, out and limit expenditure to only running or operating costs and capital expenditure for generation, transmission and distribution, you will get a new set of figures. If you add power-related training and expenditure in other ministries and departments such as education, NNPC and industry you will get yet another set of figures.
If you limit yourself to capital expenditure and running costs you will get a set of figures that can truly be said to be really expenditure on power. I have been told that the figure in this regard from 1999 to 2007 is in the region of $6.5 billion including outstanding letters of credit. But whatever figure you choose to take, to say that there is little or nothing to show for it is the greatest understatement of the year which will tend to portray inadequate knowledge or ignorance.
From what I have said above, there are results to show for the expenditure. What is required is serious, adequate and committed follow-up and sustenance from where we stopped. If the total expenditure has not translated to power availability at our homes and for our industries, it is because the little additional expenditure that is necessary for completion or for sustenance has not been made. For example, if you spend $200 million on a power station and the switch gear costing less than half a million dollar is not installed, you will not get the benefit of the $200 million already invested. For the uninitiated, nothing has happened.
Yar’Adua held back power development and generation which could have taken us to 10,000 megawatts latest by 2008 for almost two and a half years and the consequences were that outages persisted for another 6 years and the costs of what he delayed became doubled when Jonathan decided to go forward with it.
Yar’Adua was simply devoid of adequate knowledge on power and he was also incapable of making good use of experts who abound around him except his provincial kindred. In one of his first statements on power, he promised to generate 30,000 megawatts in his first term as President. I sent Osita Chidoka to him to give him a bit of education and to say to him that if he could generate 3000 megawatts in addition to the plans he was inheriting, he would deserve the greatest award in the world.
In the end, he went from the 3800 megawatts which was the highest generated under my Administration to less than 2500 megawatts. The lesson is that while a leader may not be an expert on all issues, he must have the ability to absorb and comprehend the complexity of all issues that will be brought before him and, where he does not have a grip on the subject, he should make use of experts and experienced people from anywhere for him to be properly briefed and for him to positively lead.