chloride6:


Is land more expensive in Nigeria than in the USA?

The same benchmark has worked even in Sub saharan Africa so what are you saying?

Do they also have to buy, ship tools and equipment from other countries or obtain them from right there in America?

Do they also have to build 58 kilometres transmission line or just tap into already available vast transmission lines?

Do they also have to import construction and power engineers from other countries and lodge them in nice hotels for years or obtain them locally?


Again, stop being shallow with your elementary thinking.

chloride6:


First of all , I didn't post a table. Let's make sure you are not hallucinating.

My $500k per km estimation is an over estimate sef and fully included land and every other additional cost.


You keep speaking about facts and associated costs as if gas powered power generation is a closely guraded secret. People here have been telling you the global benchnark cost is $1million per megawatts and you have been shouting them down.

Why don't you search for any $1 billion dollar , 540 MW plant anywhere in the world and defend yourself?

I read an analytical work about two years ago about gas fired generating plants in Texas at average cost of $400M per 1,000MW. Since then, I have tried to compare to projects in Nigeria and elsewhere in Africa and non has come anywhere near close to being this cheap (West African projects being markedly more costly than those in North and Southern Africa)!

Now this QIPP is $1.1B for 540MW.

I am no expert in power projects and my understanding is at best that of a nominal observer. However, I want to be fair enough to accept that such projects could be genuinely costlier in Africa due to several costs possibly including; shipment, FX, finance, additional training, expatriates, necessary maintenance, ancillary infrastructure etc. Also, the investors may need to be wooed with profit margins above normal to make sense of investing in Africa of all places.

This said, We must also factor in corrupt practises as a very possible cause of contract inflation in Africa. I don't know nada about the QIPP project, however the claims of inflation here isn't beyond reason.

But government is not putting 1 kobo down . Are you literate at all

shervydman:

Have u done the bolded?? Oga, take it easy. This is daylight robbery. I'm happy that the project will benefit every Nigerians but the cost is too much.

Why should I do that? Last I checked, I'm not the one disputing the cost, I'm not the one coming up with silly and baseless basic cost rubbish that you can not break down.

You the one disputing the cost so it's your job to show us the breakdown per the cost of similar projects that you people know so much about.

I'm not going to make your point for you or help you obtain facts to prove your flawed views, that's your job.

chloride6:


First of all , I didn't post a table. Let's make sure you are not hallucinating.

My $500k per km estimation is an over estimate sef and fully included land and every other additional cost.


You keep speaking about facts and associated costs as if gas powered power generation is a closely guraded secret. People here have been telling you the global benchnark cost is $1million per megawatts and you have been shouting them down.

Why don't you search for any $1 billion dollar , 540 MW plant anywhere in the world and defend yourself?

Only in Nigeria......the largest hydro-electric dam currently built in Africa( renaissance dam in Ethiopia ) is $6.4b for 6450mw. Ours is $5.7b for 3050mw. Though too expensive but Still better than this crap.

arinzeejikonye:
It is also worthy of note that exon Mobil will be taking over ibom Power plant,
Hopefully they gonna also expand it.

Where did you hear this?

aribisala0:
But government is not putting 1 kobo down . Are you literate at all

Won't the govt pay back at the expense of every Nigerian?? Or what are u insinuating?

shervydman:

Won't the govt pay back at the expense of every Nigerian?? Or what are u insinuating?

Pay what back exactly? What is your understanding of the deal? Who owns the plant?

Better to have full understanding before sounding off

People that are saying that it is private project with no goverment intervention are uneducated people with no idea of the macro economic effects of things like this.

This is the exact reason we are poor. A company that builds a $1 billion power plant as against $540 million for the same plant will justify its investments by its returns.

And who do these returns come from? You guessed right. The masses.

kjhova:


I read an analytical work about two years ago about gas fired generating plants in Texas at average cost of $400M per 1,000MW. Since then, I have tried to compare to projects in Nigeria and elsewhere in Africa and non has come anywhere near close to being this cheap (West African projects being markedly more costly than those in North and Southern Africa)!

Now this QIPP is $1.1B for 540MW.

I am no expert in power projects and my understanding is at best that of a nominal observer. However, I want to be fair enough to accept that such projects could be genuinely costlier in Africa due to several costs possibly including; shipment, FX, finance, additional training, expatriates, necessary maintenance, ancillary infrastructure etc. Also, the investors may need to be wooed with profit margins above normal to make sense of investing in Africa of all places.

This said, We must also factor in corrupt practises as a very possible cause of contract inflation in Africa. I don't know nada about the QIPP project, however the claims of inflation here isn't beyond reason.

I see where you are coming from, but the issue is private entities invest their own money and determining how much to pay for the project they are investing in based on their own cost analysis from top to bottom, for me or or any other bystander to say they are spending little or too much is just plain ignorance because I don't know anything, I don't even have access to whatever studies they did, their financial data or cost analysis needed to formulate any opinion on.


This being a private project and funded by private entities, it means apart from regulatory issues, they are not any of your concern and they owe you zero explanation per how and what they spend their money on because they only answer to their shareholders, not you or even me.

deomelo:
The problem with investors and their inability to invest in the power sectors remains clear and well defined regulatory path and ability to benefit from investment, it's always been a murky and negative path for power investments.


What Fashola is doing here is clearing that path for the parties involved from regulatory to clear definition per who is going to handle what and who is going to supply raw materials like gas and so on.


This is the kind of clear and vision driven formula need in the power sector and I see other power investors stepping in based on the same formula and pathways.

Fashola is not doing anything please. The Power Sector Roadmap was developed by the Obasanjo administration and finally implemented by the Jonathan administration.

Everything you are seeing happening now is simply what is expected. Fashola has not added a single word or punctuation to the Regulatory Framework for the Power sector in Nigeria.

chloride6:
People that are saying that it is private project with no goverment intervention are uneducated people with no idea of the macro economic effects of things like this.

This is the exact reason we are poor. A company that builds a $1 billion power plant as against $540 million for the same plant will justify its investments by its returns.

And who do these returns come from? You guessed right. The masses.

Market forces determines what you are paid for your product.

If your economy is run properly there will be competition among investors. The premium is a reflection of the risk perception and other institutional problems in Nigeria.

Even during the recession the interest rates in the USA were close to zero whereas Nigeria through a period of many years of > 6% yoy growth had double digit interest rates.

The truth is Nigeria is competing with other places for investment and it is not an attractive destinatioin. We pay ahigh premium for that

naijaguy77:


Fashola is not doing anything please. The Power Sector Roadmap was developed by the Obasanjo administration and finally implemented by the Jonathan administration.

Everything you are seeing happening now is simply what is expected. Fashola has not added a single word or punctuation to the Regulatory Framework for the Power sector in Nigeria.

Full Speech: Fashola Unveils FG’s Road Map for Solving Nigeria’s Power Crises

Babatunde Fashola, Minster for Power, Works and Housing, says the Federal Government’s road map for solving the country’s power crises is to attain incremental power wherever it can be found, thus achieving steady power and ensuring uninterrupted power supply. Fashola stated this while delivering a lecture titled: ‘Nigeria’s electricity challenges, a road map for change. See the speech below.


http://www.nigeriaelectricityhub.com/2016/05/06/full-speech-fashola-unveils-fgs-road-map-for-solving-nigerias-power-crises/

WRONG.

Stop lying.

Fashola drew up his own road map from scratch.

shervydman:

Only in Nigeria......the largest hydro-electric dam currently built in Africa( renaissance dam in Ethiopia ) is $6.4b for 6450mw. Ours is $5.7b for 3050mw. Though too expensive but Still better than this crap.

Ethiopia are certainly an impressive country in their prudence. Their power plants are vastly cheaper than similar projects in Nigeria, but even more stark is the rail infrastructure and the comparative heist that is Nigeria's rail projects. Ethiopia built a standard-guage, 750km, electric-powered (ours is even anachronistic diesel trains) trains, complete with 39 stations and linking with Djibouti for "just" $3.4 billion. Even the Kenyans were screaming "murder" when their own ambitious rail project cost more per km than their Ethiopian neighbours.

Meanwhile, the Lagos Blue Line rail project connecting Okokomaiko with Marina costs $1.2 billion for just 30km. That doesn't factor the other lines. Read that and weep.
There are always all sorts of excuses for the inflation. Cost of land....blah blah blah.

rottennaija:


Where did you hear this?

Sorry I earlier mistook ibom plant for iboe plant, from energy platform radio programme, because they sounded similar.

deomelo:



Market forces determines what you are paid for your product.

Go and sit down. Even you wouldn't be able to breathe in a perfect market.

Obi1kenobi:


Ethiopia are certainly an impressive country in their prudence. Their power plants are vastly cheaper than similar projects in Nigeria, but even more stark is the rail infrastructure and the comparative heist that is Nigeria's rail projects. Ethiopia built a standard-guage, 750km, electric-powered (ours is even anachronistic diesel trains) trains, complete with 39 stations and linking with Djibouti for "just" $3.4 billion. Even the Kenyans were screaming "murder" when their own ambitious rail project cost more per km than their Ethiopian neighbours.

Meanwhile, the Lagos Blue Line rail project connecting Okokomaiko with Marina costs $1.2 billion for just 30km. That doesn't factor the other lines. Read that and weep.

There are always all sorts of excuses for the inflation. Cost of land....blah blah blah.

Lagos Blue Line rail project is not a stand alone rail project and there are other components associated with the project and for you to equate the project with again one of your imaginary similar projects is again nothing but ignorance on your part.

Lagos Metro Raill system is not any other project in Ethiopia or like any project in Africa, it's a combination of a 10 lane 50 klm freeway system with rail and BRT access over marshy terrain with many metro stations and a bridge construction over the Lagos lagoon to take the metro rail from Lagos mainland to Lagos island.

Now, how similar is the project to your so called similar projects.?


There's got to be more to you as a human being than half baked thoughts, baseless comparisons and ignorance.

aribisala0:
Pay what back exactly? What is your understanding of the deal? Who owns the plant?

Better to have full understanding befuore sounding off

This is exactly what I expect, it's a PPA( power purchase agreement). So u expect a company to build a power plant at an expensive rate and not make a profit? I guess u need to have a full understanding here before sounding ignorant. Do u think qua iboe is a charity organization?.

Oga, that amount is too much. Every Nigerian will suffer d consequences cos the government will have to buy generated electricity from the company.

shervydman:

This is exactly what I expect, it's a PPA( power purchase agreement). So u expect a company to build a power plant at an expensive rate and not make a profit? I guess u need to have a full understanding here before sounding ignorant. Do u think qua iboe is a charity organization?.

Oga, that amount is too much. Every Nigerian will suffer d consequences cos the government will have to buy generated electricity from the company.

Did they already claim to one of lowest priced electricity.

QlPP would be one of the lowest cost thermal power plants in the country due to its efficient design and competitive gas price. 

shervydman:

This is exactly what I expect, it's a PPA( power purchase agreement). So u expect a company to build a power plant at an expensive rate and not make a profit? I guess u need to have a full understanding here before sounding ignorant. Do u think qua iboe is a charity organization?.

Oga, that amount is too much. Every Nigerian will suffer d consequences cos the government will have to buy generated electricity from the company.

Sounding ignorant is you making generalized claims and labeling the project expensive without facts to base your assertion on.

You don't have facts, cost analysis or any knowledge about the project and since the meaning of ignorance is lack of knowledge, it means you are ignorant unless you have facts like cost analysis to base your claim on.


Look in the mirror.

Another propaganda! Where is d rail lines?and ibaka deep sea port?

https://www.dailytrust.com.ng/kano-emir-s-firm-dangote-nnpc-to-build-1-1bn-power-plant.html

After all the argument, this article doesn't suggest that it's the FG to build it. It's really a brainchild of Mobil producing in conjunction with Nnpc as JV partners. Means the design and costing would have been done by Mobil. FG doesn't have much stake other than to drop its share of the cash.

Now that's not still to say that it's not inflated, but I know for a fact that the major oil companies tend to overdesign.

I have seen a project costed by an oil major for one and a half times the cost of a smaller player.

All said and done, a few reasons why it Could still be genuinely overpriced.

Logistics - our ports, roads etc are so inefficient that is is really expensive to move equipment around. I saw a few posts comparing with Tanzania, but don't be surprised that Tanzania has a better port and road infrastructure than we do. After all, isn't conotnou port better than Lagos.

Beureacracy - our government processes are so slow and incompetent that any company working in Nigeria would price in the additional risk from delays caused by red tape.

Corruption in govt - to get your licence and permits, you need to bribe much more than almost everywhere else in Africa, not to talk of the world.

High use of expats. - Sadly we don't have people who can Utl lilies the highest technical and technological skills.

Security- the extra cost of security in Nigeria, especially in the Niger delta is very high.

Community-another major issue. Communities sieze equipment until marching ground is paid etc. Another significant cost.


High interest rates

Potential for devaluation of the naira that could impact the project.

There are probably a few more and the truth is that all of these could be a major risk to the project and it will all be priced into the project.

Obi1kenobi:


The North has some major hydo-electric projects coming on-stream doesn't it? They also have a comparative advantage in utilizing solar and wind power compared to the South. Pipelines are expensive to lay for thousands of miles and I'm not sure why they'd be building gas-powered thermal plants without factoring the logistics of gas supply.

They should develop a BioGas system from their waste system that can be used to power the plants.

deomelo:




Sounding ignorant is you making generalized claims and labeling the project expensive without facts to base your assertion on.

You don't have facts, cost analysis or any knowledge about the project and since the meaning of ignorance is lack of knowledge, it means you are ignorant unless you have facts like cost analysis to base your claim on.


Look in the mirror.

I now see the reason why someone made a notion of not debating with u earlier. Go and relax ur brain. U're going off point. We've said it countless times that 1kw cost about $1000, what other cost analysis do u want? When the main project cost less than $600m, ur vague excuses of land, manpower n Co will cost about $400m?Oga, go to bed before u boil over.

Blue3k:


Did they already claim to one of lowest priced electricity.

My man.....the govt may not necessarily regain the money from electricity consumption of the masses, there are several means to get the money back through the masses.

Another lie that has already crashed even before take off. B's government and lies is like beans and farts. I no call names oo.

Just a chip in,
Azura edo ipp 450mw nearing completion,
Latest may 2018,power will come on stream

shervydman:

This is exactly what I expect, it's a PPA( power purchase agreement). So u expect a company to build a power plant at an expensive rate and not make a profit? I guess u need to have a full understanding here before sounding ignorant. Do u think qua iboe is a charity organization?.

Oga, that amount is too much. Every Nigerian will suffer d consequences cos the government will have to buy generated electricity from the company.

Finally the scales have fallen. You have carried on ignorantly as if it was a government funded project

So why don't you make a better bid? No amount is too much if the market is willing to pay for it.
That is how markets work.
That is what business is all about. What is not "too much" in Nigeria? What are the interest rates? In the US if a company makes 10% profit it is doing well in Nigeria you cannot even borrow money at 10% so everyone targets 100% profit or more.
If there is not a better offer on the table then it is not too much. The alternative is for government to build the plant by itself and it has no money. Life is tough.So please spare me the sanctimonius nonsense. Our nation is the sum total of all of us so do not act as if you are a saintly gift to the rest of us detached and somehow above the fray. Yes it sucks but life is not a picnic

If they had to borrow money which likely they would what kind of interest do you imagine they would pay? The risk premium for Nigeria right now is quite high .They are businessmen not a charity.

If you have to employ an Engineer to work in Texas or AkwaIbom, a US national what do you imagine would be the cost differential to attract him and to insure him?
Why is China paying footballers more than Europe?

shervydman:

I now see the reason why someone made a notion of not debating with u earlier. Go and relax ur brain. U're going off point. We've said it countless times that 1kw cost about $1000, what other cost analysis do u want? When the main project cost less than $600m, ur vague excuses of land, manpower n Co will cost about $400m?Oga, go to bed before u boil over.

What you copied and pasted including the other ignorant claims spewed in this thread.

Was thew price of land part of that basic cost?

Was the price of buying, shipping, clearing and transporting tools, machinery and equipment to the work site part of that copy and paste cost.?

Was the price of importing, feeding and housing engineers and power experts needed to work on the project for part of that cost?

Was new 58 km transmission line included in your basic cost?

Don't you want to show us your copy and paste basic cost with all the above included?

Shouldn't common sense tell you that basic cost in the USA is obviously not going to be the same basic cost in Nigeria.

Elementary school children get sense pass many of you for real.

deomelo:



Lagos Blue Line rail project is not a stand alone rail project and there are other components associated with the project and for you to equate the project with again one of your imaginary similar projects is again nothing but ignorance on your part.

Lagos Metro Raill system is not any other project in Ethiopia or like any project in Africa, it's a combination of a 10 lane 50 klm freeway system with rail and BRT access over marshy terrain with many metro stations and a bridge construction over the Lagos lagoon to take the metro rail from Lagos mainland to Lagos island.

Now, how similar is the project to your so called similar projects.?


There's got to be more to you as a human being than half baked thoughts, baseless comparisons and ignorance.

As always, there are always a mountain of excuses, hiding under the unoriginal fact that not all conditions are perfectly equal. I have just gone through 3 different articles about the Blue Line and none has alluded to the roads being included in the cost estimate. You're free to supply links as to the full costs of the constituent parts of the project for us ignorant folk to learn.
For someone who lobs words like "ignorance" a lot, you've not even attempted anything resembling a coherent rebuttal of anything you disagree with. Just casts slurs and when all fails, starts rambling about IPOB.

aribisala0:
Finally the scales have fallen. You have carried on ignorantly as if it was a government funded project

So why don't you make a better bid? No amount is too much if the market is willing to pay for it.
That is how markets work.
That is what business is all about. What is not "too much" in Nigeria? What are the interest rates? In the US if a company makes 10% profit it is doing well in Nigeria you cannot even borrow money at 10% so everyone targets 100% profit or more.
If there is not a better offer on the table then it is not too much. The alternative is for government to build the plant by itself and it has no money. Life is tough.So please spare me the sanctimonius nonsense. Our nation is the sum total of all of us so do not act as if you are a saintly gift to the rest of us detached and somehow above the fray. Yes it sucks but life is not a picnic

Trash!!!......