A new report by the Centre for Health Equity and Justice (CEHEJ) has revealed how a globally acclaimed giant of electricity – General Electric (GE) with long term presence in Nigeria and other electricity contractors, under-performed and failed in their contractual obligations to Nigeria in the electricity sector.
According to the report which carefully reviewed numerous electricity contracts awarded by the Nigerian government “General Electric (GE) did not give anything back to Nigeria in exchange for the billions of dollars it has taken out of the country but that GE and other failed contractors have offered the government and people of Nigeria general darkness”. The report found that the billions of dollars spent by the Nigerian Government in the power sector have been paid to contractors, most of whom failed to deliver on their projects and promises to Nigeria. GE, as a so-called development partner of Nigeria has collected more money from Nigeria more than any other entity and has disappointed the most.

In x-raying the Kaduna Power Plant that was awarded to GE as Contractor in consortium with an indigenous company, the report reveals how GE has been very deliberate and systematic in disappointing Nigeria’s legitimate expectations in salvaging the power sector despite claiming to be Nigeria’s strategic development partner.

The report shows that although the Kaduna Power Plant contract was awarded since 2009 as a turnkey project with a term of 36 months, it has not been delivered till date, i.e. after over 10 years. Worse still, on average each engineer of GE on the project site gulps from the Nigerian Government purse a daily sum in US dollars that is way higher than the monthly salary of a permanent secretary in the Government Ministries. The report is convinced that no foreign entity has caused such financial haemorrhage on Nigeria as GE has done.

The 70-page report launched today at the IBIS Hotels, Lagos is titled: “Kept in Darkness”—Holding Non-Performing Electricity Contractors Accountable. The report was presented to the media by Dr. Yemi Oke, Ass. Professor, Energy/Electricity Law, Faculty of Law, University of Lagos discloses that “In the Course of the investigations culminating in this report, it was discovered that some of the Contracts awarded were for purposes or projects that were not feasible, while others although feasible, were awarded to fictitious, non-functional or non-existent companies which are in other words referred to as shell companies in that they exist only on paper. Of graver worry is the fact that most of the projects for which the contracts were awarded, up until now, remain unattended to, either totally unattended or inexplicably abandoned half-way.

The report seeks to ensure that those who failed to perform or deliver on contractual obligations, duties and responsibilities in the power sector are held accountable and punished under the existing law; contractual agreements, and document.

The report recalls that earlier in May 2008 in its report, the House of Representatives Committee on Power and Steel in its report of investigation into the huge sums of money spent on power generation, transmission and distribution between 1999 and May 2007 without commensurate result had earlier indicted some of the contractors and recommended that they be further investigated by EFCC and ICPC with a view to recovering huge sums fraudulently received on power project contracts. Some of the Contractors indicted are: Marubeni (WA) and Marubeni international for very poor performance in respect of LOT 1 (Calabar), LOT 4 (Sapele), and LOT 5 (Eyaen/Ihovor) power stations projects.

Lahmeyer International for generalized project management failure in respect of the NIPP project, complicity in tender manipulation, negligence or complicity in over-scoping as well as overpricing of NIPP projects, abuse of due process, certification of invoices for payments for works not yet done by contractors (e. g Marubeni).

The report states that “as structured and executed, the contract is a complete and total negation of the commitment of GE to develop the power sector of Nigeria. GE did not give back anything to Nigeria in exchange for the billions of dollars it has taken out of the country.” Dr Oke further observed that “10 years post contract, the Kaduna Power Plant project has continued buffering, tethering and staggering. The project is not completed. The project is not near completion. Out of the 215 MW promised to be delivered from the Plant, not a KW has been delivered. More worrisome, the Federal Government has parted with tons of billions of naira on the project.
“GE sold all the gas turbines (frame 9) to NIPP for the medium sized power plants, even when they knew that sites for the erection of the equipment were not available, the manufactured turbines were then quickly shipped to Nigeria and left at the ports, so much demurrage was incurred due to long term storage at the ports and the equipment suffered serious damages which GE had to replace at exorbitant monopolist prices. For instance at one plant alone (Calabar Power Plant) $8m was paid for third party preservation of the equipment, after that another $5.4m was paid to GE to replace parts for the same stored equipment since GE declared them as unfit for use, the oils and batteries expired in storage.

The same situation is applicable to the various plants under the NIPP project including Calabar, Ihovbor, Sapele, Gbarain, Egbema, Omoku, and Alaoji power plants. From 2003 to date there is over 2000MW of stranded uninstalled and non-commissioned turbines capacity, the turbines have been supplied by GE and full payments made but the nation still suffers because of the connivance of GE with the EPC Contractors to rip off the country. The FG had to pay several millions of dollars to other companies to handle preservation of the turbines at the ports because GE practically dumped the equipment on Nigeria. Dr Oke reiterated that GE has brought general darkness to Nigeria and should like all other failed contractors be held accountable.” The report finally recommends to the Federal Government, the Economic and Financial Crimes Commission (EFCC), and the Independent Corrupt Practices Commission (ICPC) to bring to book those found wanting in the failed contracts.

Read more at: https://www.vanguardngr.com/2019/09/how-electricity-contractors-failed-nigeria-cehej/

Foreign companies in collaboration with Nigerians reaping off the system and ensuring that the country does not get value for electricity contracts awarded to spurious companies. Over $16b spent and yet no power