₦airaland Forum

The Managing Director and Chief Executive Officer, Egbin Power Plc, Mr. Dallas Peavey, Jr., in this interview with ‘FEMI ASU, says the nation may be enveloped in darkness in the coming weeks due to a "Myriad of Challenges" in the power sector.

What do you think about the Nigerian power sector almost three years after it was privatised?

I think at this point, we have gone through so many stages. I think the issue here is liquidity. So many of the owners came and they were thinking that they were going to be reaping some sort of returns after the first three years. In reality, nobody realised that they would go through three years and lose money. Our parent company owns Egbin as well as Ikeja Electric. Having said that, we cover a lot of the areas in Nigeria out of our own pocket. We, as a private company, don’t expect to do that.

I think the government is coming up with a plan and working with us to ensure that we get paid and continue to generate power, and go from the current generation of less than 4,000 megawatts to 10,000 MW in the next five years. At least, that is what we are hoping to achieve. We have got a long way to go, but I think we can get there.

Aside from the liquidity challenge, what other issues are hampering the growth of the sector?

Fuel supply is also an issue. The second is transmission; the system is older than Egbin, which is 37 years old. The transmission system is older than that, and they have not done anything towards the revitalisation of the system. They are trying to push almost 5,000MW to the system and it is not capable of taking that. We have to work with the Transmission Company of Nigeria and the government, because it is still owned by the government, to work through those issues.

How is the current economic recession in the country affecting your operations?

We have not laid off anybody and we haven’t cut back on salaries. We haven’t cut back on the mainstay of our workforce simply because we are hoping that we can rectify the gas issues. We hope that the liquidity issues will be resolved with the government so that we can get back to generating 1,320MW, because Nigeria needs power.

Transmission is often regarded as the weakest link in the power value chain, do you think the government should give it out on concession basis, or totally privatise it?

I can only give my opinion, and I think typically the transmission system is weak and probably could have been privatised earlier simply because that is the weakest link and it takes the most investment. I think that Manitoba Hydro is gone away; now, the TCN is back in the hands of the government. I think the government needs to take a look at how they are going to fund the projects that are necessary to strengthen the transmission network; even when we generate our capacity of 1,320MW, we are not sure the system can take that. And we are looking at doubling the capacity of the plant in the next three years. How are they going to take that? The government has to take a hard look at that.

Over the past three years, we have seen capacity upgrade at Egbin, with the plant now having available capacity of 1,320MW; what plans do you have going forward?

We are going to continue to work to ensure that we maintain the 1,320MW, and we just completed the environmental impact assessment for our phase two so that we can double the capacity of Egbin. Our plan is to have up to 3,000MW capacity in the next three years.

Do you have any plans to diversify your sources of fuel for the plant?

We already are doing that. We are looking at using Low Pour Fuel Oil. We are looking at using liquefied natural gas. We are looking at several options so that we are not depending upon the Nigerian Gas Company, because of the constant attacks on the pipelines. Nigeria needs power, even if we have full capacity, the nation needs over 10,000MW today. So, what we need to do is to continue to work with our owners and partners so that we can get fuel, and then work with the TCN so that they can take the power and get it to the nation. Right now, we have got almost 820MW stranded capacity that the nation needs.

Normal generation in Egbin is about 1,320MW. Currently, we are doing about 425MW, only 30 per cent of what we should be generating simply because of gas. The other side that we are having an issue with is that the TCN cannot take the full amount of power that we can generate. Right now, the biggest issue is gas, and we don’t know what the future is going to bring to us in terms of gas supply.

On top of that, we are owed over N86bn by the Federal Government; we have been producing but we haven’t been paid for almost six months. The last amount of money that we got was about 16 per cent of the total bill for the power that we generated for the month.

What are the implications if the debt is not settled as soon as possible?

We can’t continue to operate simply because we don’t have the money to pay for materials. We don’t have the money to pay for repairs and we can’t continue to pay our employers simply because we are owed so much money. We have gone out to banks and different financial entities to borrow the money to continue to do maintenance. You know for banks, the limit is only so much and we have reached that limit.

How has the exchange rate crisis affected your operations?

When we bought the plant three years ago, the exchange rate was N156 to the dollar. Today, the bank rate is N310 to the dollar, double of what it was then. This plant was built 37 years ago by the Japanese. And to do replacement and repairs, the foreign exchange rate is double. So, where are you going to find that? We are being paid in naira, but almost everything that we pay for is in dollars. So, the exchange rate is significantly impacting our ability to continue to operate as well and we are looking to the government to assist us on that, to come up with the solution for us to do that. Also, the scarcity of the dollar to be able to buy these spare parts and continue to do maintenance is impacting us tremendously.

But we, as a private company, have continued to dig deep into our pocket, go to our sister and parent companies to borrow money that the banks can’t loan us to continue to operate. But even so, if we don’t get paid and if we don’t get gas, we can’t continue to generate.

In terms of building power plants, we have not seen a lot in the sector in the past few years, why is this so?

It is a challenge because it requires huge investment. You have to have the capital to come in and build the power plant. A power plant like Egbin will cost you $600 to $700 per megawatt to build and install. Where are you going to find that much money, you are talking about $1.7bn to build the plant? That is a lot of investment. When you are not getting paid and you are owed N86bn, it is hard to attract investors in that kind of marketplace.

The Central Bank of Nigeria recently gave out intervention funds to power firms, what has become of that?

They didn’t give it to us; what they paid to some of the generation companies was what they owed them. It wasn’t guarantees; it wasn’t financing; it wasn’t loans. It was simply the obligations that they owed us; but then, we haven’t got any money. We are still waiting for it.

What do you intend to achieve with the Egbin plant in the next five years?

If we can continue to progress and move forward, by addressing the fuel supply, transmission and the liquidity issues, again we are looking at generating up to 3,000MW in the next three years from this plant alone. Right now, we currently provide 35 per cent of the power in Nigeria. That is a big step. Nigeria needs it and all we do here is to generate power.

Power supply appears to have improved slightly with generation rising above 3,500MW from a record low of 1,400MW in May amid militant attacks on oil and gas facilities, what is responsible for this?

That is because we have had more rains, leading to increase in generation from the hydro power plants. But in the next few months, there won’t be any more rain and so the output from the hydro power plants will dissipate and we will be back to generating from Egbin, because it is the largest in sub-Saharan.

Are you worried about the current state of the power sector?

Absolutely, because everybody is working so hard to come with the resolution but we need the government’s help and support because we need the money that it owes.

If that is not done any time soon, what will happen?

Then it is going to be dark in Nigeria soon.

Do you think the core investors who acquired the power plants are doing enough in terms of investment?

I think they have invested. Again, they have gone three years without any return. Second is that they have invested a lot of capital to get to this point. Lastly, they have explored every means of financial support that they can get, whether from banks, financial entities, the World Bank, IFC and others; and in our case, from our parent company. Everybody runs out money sooner or later if they don’t get paid.

What is the current level of Egbin’s indebtedness to the banks?

Right now, it is about $325m; how do you continue to sustain that? You can’t pay the principal, so how can you pay the interest? It is a difficult situation. We had to continue to borrow money to do the repairs, to buy the materials for the replacement of the pumps, modules and transformers because this is a 37-year-old plant; the equipment that we have is 37 years old. It wasn’t maintained when we bought the plant and so we continued to overhaul each one of the six units. We had to modify everything to do the repairs. The equipment that we utilise in the plant is not manufactured in Nigeria or Africa; so we had to go back to Japan, Korea and US to buy these spare parts.

Right now, because of gas and transmission issues, we only have three of our six units running. Each one of our unit can produce 220MW. For a megawatt, that is about 100,000 people that it provides power for. We are helping to stabilise the national grid. If you notice, over the last six weeks, we haven’t had a grid failure or system collapse because of Egbin. Egbin is the sole reason there has not been a total system collapse in the nation, because we regulate everything coming to Lagos all the way to Abuja and farther North.

Are you satisfied with the current electricity tariff?

We are not satisfied with the tariff simply because it is not functioning the way it is supposed to. It is supposed to cover your costs; today, it is not covering our costs. We have a shortfall because the cost of gas, the transportation of that gas and the cost of operating are far above the Multi-Year Tariff Order II. The MYTO II was set up to cover those costs, but it is not doing that. We are not looking for returns on our investment yet; we are trying to continue to invest in Nigeria but we have to be paid the bills to do that.

Does it mean you are not making any profit since you acquired the plant?

We have never made a profit. We are owed N86bn and we have lost $300m in the last three years directly out of our pocket because we haven’t been paid and because we have invested that money and we have got no returns. We don’t expect the returns immediately, but at some point, every business has to be able to sustain itself with profits or returns on its investment.

When do you intend to start making profits?

We don’t know. Right now, we are just trying to survive and that is not going on very well. We are hoping and praying that it is going to get better.

What specific policy or action do you expect from the government?

We need the government to pay its bills. Everybody is blaming the distribution companies; the government needs to pay its bills.

How has Egbin Power affected its host communities in the last three years?

Today, we were able to put together a programme to offer scholarships to academically excellent students and students from the local regions that otherwise would not have the opportunity to attend schools like Powerfields. We think what this is going to do is that it is going to enrich the communities, Egbin and the nation.

It is part of our Corporate Social Responsibility but it is also different. The scholarship is for a full year per student. It will cater for all the expenses and costs in the full academic year, and if they continue on with the excellence of their academic programmes, they will benefit from the scholarship programme to the university level. We have probably spent at least N750m in the last three years on our CSR programme.

TOLUWANI ENIOLA writes on the allegations of corruption leveled against Patience Jonathan and other controversies surrounding the Office of the First Lady in the country

Since the return to democratic governance in 1999, Nigeria has had four first ladies who gave ample support to their husbands as presidents of the country.

From May 29, 1999, Stella Obasanjo held sway as the country’s first lady before her death on October 23, 2005. It was the turn of Turai Yar’Adua between May 29, 2007, and February 9, 2010. Patience Jonathan came into the saddle from February 2010 and completed her tenure as the first lady on May 29, 2015, when her husband, Dr. Goodluck Jonathan, lost in the presidential election.

Although Aisha, the wife of President Muhammadu Buhari, rejected the title of First Lady, she acts as one, making her the fourth since 1999. Out of these four first ladies, whose tenures have been marred by controversies, the one that Nigerians are currently grappling with is Patience Jonathan, the wife of former President Jonathan.

Patience Jonathan arguably remains the most controversial first lady owing to her perceived lack of sophistication and bluntness. She kept Nigerians entertained for many years with her assent and blunders and became the crooner of “There is God o,” a clause that has become the butt of jokes on social media.

Mama Peace, as she is fondly called by her admirers, wielded significant influence in the former Peoples Democratic Party-led Federal Government. Her influence traversed the length and breadth of Aso Rock to her home state, Rivers, where she assumed a ‘godmother’ role, giving immense support to the election of Governor Nyesom Wike.

It will be recalled that the 59-year-old locked horns with the former Rivers State Governor, Rotimi Amaechi, in a battle of supremacy over the political structure of the state. Two years ago, she took on Nobel Laureate, Prof. Wole Soyinka, over his comments on the political crisis in Rivers State. Patience said Soyinka had become an embarrassment to his admirers with his diatribe against her.

Mrs. Jonathan attended the University of Port Harcourt, where she obtained a B.Ed in Biology and Psychology; she was an employee of the Bayelsa State Ministry of Education until 1999 when her husband became the deputy governor of the state.

One of the landmarks of her tenure as the first lady was on July 12, 2012, when she was appointed as a permanent secretary in Bayelsa State by Governor Seriake Dickson. The appointment sparked outrage because she had been on leave from the civil service for over 13 years since her husband became the deputy governor in 1999.

After the defeat of her husband in the 2015 presidential election, she maintained a quiet posture, making a few public appearances and refusing to make public comments, unlike before. But last week, the former first lady made a dramatic comeback into public discourse when the Economic and Financial Crimes Commission traced $20m to her Skye Bank account.

The discovery of the funds was a product of investigations into a money laundering case against a former Special Adviser on Domestic Affairs to ex-President Jonathan, Waripamowei Dudafa, to whom the EFCC had traced four company accounts which were frozen.
Houseboy, driver and other domestic workers of Dudafa were named as directors, but Patience’s $15m was lodged in the accounts.

She was reportedly given a special card with which she reportedly made withdrawals from the accounts across the world.

Outrage greeted the news that Patience had such an amount of money, which analysts claimed she could not make in all her civil service career. Many civil society organisations, human rights lawyers and anti-corruption groups such as the Coalition against Corrupt Leaders, the Socio-Economic Rights and Accountability Project, and Professor Itse Sagay (SAN), have since called for a further probe of the former first lady over her recent confessions and the huge funds stashed in her accounts.

But in a swift reaction, Patience Jonathan said she was using the $15m, which was frozen in the four companies’ accounts, to settle medical bills while she was out of the country.

Patience said this in a letter written by her lawyers, Granville Abibo (SAN) and Co, which was addressed to the acting Chairman of the EFCC, Mr. Ibrahim Magu.

Observers, who had expected that she would deny a link to the funds, were surprised when she laid claim to the funds and urged the EFCC and Skye Bank to lift the restriction on the accounts.

The reappearance of Patience Jonathan in public discourse reopened debates on the abuse of the office of the first lady, which had generated concern in the country. A comparative study of Nigeria’s first ladies has become a salutary reminder of the dangers of corruption; Nigeria’s failing health system fuelling medical tourism, and bad leadership in general.

While some critics consider the late Stella Obasanjo as the most refined of the four first ladies, the circumstances surrounding her death on October 23, 2005, put a question mark on the country’s health system.

It will be recalled that Stella died a few weeks before her 60th birthday from complications due to a cosmetic surgery which she underwent at a private health clinic in Puerto Banús, Marbella, Spain. Like Stella, Patience Jonathan and other past first ladies have also made foreign medical trips to the chagrin of Nigerians. Patience Jonathan’s bluntness that $15m was for her medical bill has become the subject of anger and raging debate on social media.

During the tenure of the now deceased former President Umaru Yar’Adua, his wife, Turai, rarely made public comments. One of the controversies that rocked the tenure of Turai, however, was the allegation that she made most of the decisions for her husband. Although ex-President Yar’Adua denied this, Turai’s insistence that former President Jonathan should not be sworn in as acting President when her husband was hospitalised abroad, made her a subject of criticism.

Aisha Buhari received public commendation when her husband reportedly rejected the office of the first lady but her alleged ostentatious lifestyle contrasts sharply with the modest lifestyle of her husband, President Buhari.

She has also been operating from the Office of the First Lady located inside the Presidential Villa in Abuja. Recent reports also showed that nothing had changed about the fact that she rejected the title of the first lady. Aisha Buhari, like her predecessor, has personal aides, security details and protocol officers, among other paraphernalia of public office.

Critics of the All Progressives Congress-led Federal Government did not take her recent altercation with Governor Ayo Fayose of Ekiti State lightly.

In terms of public appearance and popularity, Patience Jonathan, however, stands out. The latest revelation by the EFCC about the funds found in her accounts is the subject of a raging debate on the conduct of Nigeria’s first ladies and whether they deserve the largese of their offices.

While reacting to the abuse of the office of the first lady in Nigeria, a Professor of Political Science at the University of Nigeria, Nsukka, Jonah Onuoha, said it was unfortunate that some first ladies had fallen short of public expectation.

Comparing the behaviour of Nigeria’s first ladies with their counterparts abroad, Onuoha urged Nigeria to borrow a leaf from developed countries such as the United States and the United Kingdom in conduct, speech and appearance.

The don described the office of the first lady as a constitutional aberration, adding that it had become an opportunity to siphon public funds.

He said, “The duty of the wife of the president is to support her husband. The office of the first lady in Nigeria is an aberration. During the tenure of the late President Yar’Adua, many people didn’t really know much about his wife, Turai. Also, President Buhari’s wife, Aisha, has been able to comport herself well. Patience Jonathan seems to be the worst we have had owing to her behaviour. My advice is that these women should realise their roles is to support their husbands and not to disgrace them.”

Also reacting to the matter, a political scientist at the University of Ibadan, Dr. Idowu Johnson, said there was nothing wrong in the office of the first lady but that since it had become an avenue for corruption, it should be scrapped through an enabling act of parliament.

Johnson noted that the military government of the maximum ruler, Ibrahim Babangida, “popularised” the corruption of the office of the first lady.

“Aguiyi Ironsi was a Head of State; people barely knew his wife. Victoria Gowon was a nurse and during her husband’s tenure, she only performed the function of attending to children. It was the military government of Ibrahim Babangida that popularised the corruption in the office of the first lady. Since then, with the recession in the 1980s, they used the office of the first lady to siphon public funds, enrich themselves and their families through irrelevant programmes.

“Since it is not a constitutional provision, it should be scrapped. The National Assembly should pass a law that the office is irrelevant. The Minister of Women Affairs or the special advisers to the President should be designated to handle anything relating to women. Let the wife of the president take care of her children and president,” he told SUNDAY PUNCH.

“We have reiterated it on different occasions that the former Governor Ibrahim Shehu Shema has nothing to fear and he is ever ready to defend himself, but he should not be subjected to political and media trial. All he wants is fairness, justice and equity in accordance to the rule of law"

Immediate past Governor of Katsina State, Ibrahim Shema, yesterday voluntarily handed himself over to the Economic and Financial Crimes Commission, EFCC.

Shema who arrived the Idiagbon House in Wuse 2 at 9.30am was accompanied by his former Chief of Staff, Honourable Salisu Yusuf, friends and political associates.

Recall that the former governor was declared wanted by the EFCC on Wednesday over alleged fraud.

The ant-graft agency had declared that the former governor, a member of the opposition Peoples Democratic Party (PDP), wanted after efforts to get him to respond to the allegations through invitations failed.

EFCC alleged that he committed offenses such as “criminal conspiracy, inflation of contract, abuse of office, diversion of funds and embezzlement running into billions of naira”.

But decked in a brown Babaringa, Shema entered the EFCC building for some hours before he was transferred to another EFCC facility in No.10,Niafounke Street, Wuse, Adetokunbo Ademola Crescent, Abuja for interrogation.

But speaking with Journalists, Shema’s former Chief of Staff, Honourable Salisu Yusuf stated that his boss decided to go to the anti-graft agency because “he’s a law abiding citizen who has absolutely nothing to fear.”

Yusuf added that the former governor was not fighting the EFCC and the government, but the governor of Katsina State, Aminu Masari is the one fighting his predecessor.

Yusuf said,” the former governor of Katsina State, Barrister Ibrahim Shema “went to submit himself to the EFCC even though the agency has not been fair to him in handling his case by declaring him wanted.”

Shema was still at the EFCC facility at the time of filing this report.

Similarly, head of the former governor’s media team, Oluwabusola Olawale, added that Shema has nothing to fear however decried attempts to subject the former governor to political and media trial.

Olawale, in a statement yesterday, while calling on EFCC to ensure fairness, justice and equity in accordance to the rule of law over the matter, declared that that Shema left katsina State as a debt free state despite the massive infrastructural development during his eight year tenure.

The statement read in part “As a further proof to the fact that the former Governor of katsina state, His Excellency Ibrahim Shehu Shema is not into hiding as claimed by EFCC in its statement on Wednesday 14th September 2016, he has voluntarily walked into EFCC headquarter around 9:30 am on Friday 16th, September 2016.

“We have reiterated it on different occasions that the former Governor Ibrahim Shehu Shema has nothing to fear and he is ever ready to defend himself, but he should not be subjected to political and media trial. All he wants is fairness, justice and equity in accordance to the rule of law. Former Governor Shema left katsina state as a debt free state despite the massive infrastructural development during his eight year tenure.

ULSHERLAN:
If you've been taken to the station before then you will know that the writeup doesnt really apply. Most times, these men just forcefully tell people what to write. A friend was slapped continously for not writing what they were dictating to him.

Ogun and Lagos states have the highest figures of 25 and 12 respectively. Although, psychologists had predicted this, while citing financial and economic troubles that many Nigerians are currently facing, many are still surprised at the huge statistics.

Yomboy4ever:
I see your frustration, d dead party supporter is weeping pls
Accept my condolence...

Yomboy4ever:
Don't be surprised they just presented the dead candidate and the ghost candidate.
Rest in pieces PDP....

SweetLove0:
PDP is dead.

bonechamberlain:
Left for buhari and his clueless team, they would create a law to dictate to Nigerians what to eat.

People consume rice because it was cheap and easy to prepare, but it's a different thing entirely, rice is now gold, kerosene to cook rice gold, gas another story.
May God save Nigeria

hakimmiyya:
The kidnapper must be one of the wailing wailers' coz it is typical of them blaming every of their misfortunes on Pmb. Am not surprised at all.

jejesoye:
You can earn some cash with condemned computer system and phone. Just call/Whatsapp 07033962908

omobs:
God punish APC

Keneking:
But where is lalasticlala sef ?

Day don break oh