President’s Power Adviser: IPPs could end up as white elephants

Friday, 25 February 2011 00:00 Abdul-Rahman Abubakar

Repeated promises by the Jonathan Administration to improve this country’s epileptic power supply situation may come to naught because no funds have been provided in the 2011 Federal budget to build the pipelines that must deliver gas to the seven thermal stations of the National Integrated Power Projects [NIPPs], the Joint National Assembly Committee on Gas was told yesterday.

Briefing the Joint Committee in Abuja, a government delegation led by Presidential Adviser on Power Professor Barth Nnaji said the failure of government to provide any part of the N750 billion needed to build the gas pipeline projects to deliver gas to the NIPPs threatens to turn them into white elephant projects.
Nnaji said without the pipelines to deliver gas to power the stations, the much needed improvement in power generation in the country would not be realised. He said, “For power to reach the 40,000 megawatts projection by the year 2020, there is need for rapid growth of 3,000 megawatts annually, which could drop to about 1,500 megawatts annually after 2020. If we don’t build the gas link to the thermal stations, I think there will be a problem. The gas pipelines are critical to the power projects.”

Nnaji also said the power projects cannot be put to use without the gas pipelines. He said, “There is need for appropriation funding and third party funding. Something has to be done and quick to ensure that there is no delay on the part of the NNPC in completing this project.”

He said improvement in the energy sector is critical to the attainment of government’s Vision 20:2020. “Beginning from this year, government will reduce investment in power generation and distribution. Government will increase investment in transmission of power and gas,” the adviser said.

Explaining the cause of the zero budgetary allocation to the gas pipeline projects, Director General of the Federal Budget Office Dr. Bright Okogwu said government alone cannot fund the projects as it requires the participation of third parties. He said, “One of the things plaguing this particular area is that investment in the sector is not robust due to insufficient funding. People are not paying enough to the PHCN per kilowatt of energy consumed. Instead of about N42 per kilowatt, people are paying about N6 to N7 per kilowatt of power.”

Okogwu said though the gas pipeline projects are critical to the vision 2020, government must prioritise its responsibility in the budgetary process. He said, “From our interaction with people in the sector, we agree that there is need for third party funding as well as first line budgetary funding.”

He however did not give details of how to source the private sector funds for the project, saying “We have provided N195 billion in the 2011 budget for domestic gas projects.”

Expressing concern on the situation, Chairman of the House of Representatives Committee on Gas Mr. Igor Aguma said it is inappropriate to build power stations without the gas to power them. “That cannot improve the power situation in the country,” he said.

On his part, Chairman of the Senate Committee on Gas Senator Osita Izunaso said the four year project requires about N155 billion in the 2011 budget, which has not been provided.

http://dailytrust.dailytrust.com/index.php?option=com_content&view=article&id=12862:presidents-power-adviser-ipps-could-end-up-as-white-elephants&catid=2:lead-stories&Itemid=8

That would be a disaster

I thought Dangote built a 90km gas pipeline to power his 135 MW power station at Obajana for $12 Million (N 1.8 Billion). Now the FG wants to build gas pipelines to power 7 power stations in the Niger-Delta for N 750 Billion ( $ 5 Billion). I weep for the daylight robbery going on in Nigeria.

i am sorry for those who still take this pdp and jonathan serious.
let another govt come into power and nigerians will know the unknown.
these are members of secret cult who call themselves political party if not how come they will never mention frauds of their predecessors?

People are not paying enough to the PHCN per kilowatt of energy consumed. Instead of about N42 per kilowatt, people are paying about N6 to N7 per kilowatt of power.”

ROFLMAO!!!Where is @Ujujoan ?

Here we go again, most likely GEJ will ask the polity to undergo 7 days fasting and prayers so that the angels will descend from heaven with a heavenly built aircraft filled with €, £, ¥ & $ to execute all the projects he promised come 2011.

I won't bank on that. For those that want the upliftment of Nigeria, vote wisely.

BB 2011, case closed!

eku_bear:

That would be a disaster

Remember what I argued with you about, as regards waiting to fix electricity before manufacturing?

Too many crooks in the nigerian govt. All they do is turn every viable project in "white elephant project".

For me, we are already 11 yrs into the new millenium and cannot wait for these clowns to fix electricity before manufacturing major stuffs in nigeria.

alex101:

Remember what I argued with you about, as regards waiting to fix electricity before manufacturing?

Too many crooks in the nigerian govt. All they do is turn every viable project in "white elephant project".

For me, we are already 11 yrs into the new millenium and cannot wait for these clowns to fix electricity before manufacturing major stuffs in nigeria. 

Yes, I do.

Alex. . .I'm not even suggesting waiting for individuals to wait for the FG to fix power. If you are a manufacturer (based near Ota or Aba), you can roll out your own power by contacting Shell and getting them to deliver NG to your factory:
http://www.shell.com.ng/home/content/nga/products_services/solutions_for_businesses/natural_gas/
And then buy your own NG generator:
http://www.electricgeneratorsdirect.com/Generac-Commercial-QT08046JNAX-Standby-Generator/p5980.html
(You'd probably want a much bigger model than this one.)

I've not looked deeply into the cost per kWh of a setup like this, but it is almost certainly better (in terms of $/kWh) than using a diesel generator. And definitely better than using gasoline for electricity.

But as you can see from the above, it requires quite a bit of additional capital to do these things.

Anyway, regarding the previous thread. . . if a Nigerian manufacturer doesn't have access to cheap electricity, then he simply has no chance of producing goods more cheaply than the Chinese manufacturer. So forging ahead w/o facing power (one way or another) is silly, in my opinion.

Will the power plants be ready for test this year? If no, needless to take the cart b4 the horse, if yes, there must be an alternative from the third party mentioned.

^^^ What cart before the horse are you referring to?