Monday, December 16, 2013

Nigeria: Intrigues Delay Nigeria's Biggest Hydro Project

Nigeria: Intrigues Delay Nigeria's Biggest Hydro Project

All Africa, 16 December 2013
By Nuruddeen M. Abdallah

High level intrigues involving powerful interests in the Presidency are causing delays in executing the Mambilla hydro-electric power project, sources involved told Daily Trust.

The Mambilla project, which was initiated in 1982, is targeted to have the capacity to generate 3,050 megawatts, which will make it the biggest single hydro-power station in Nigeria.

Despite various reviews and changes of consultants, sources in the government said, the project is being stymied because "powerful interests in the Presidency are scrambling to hijack the contract for companies of their cronies and associates."

The Mambilla hydro, located in Taraba State, was contracted at the sum of $3.2 billion (equivalent N508 billion) to the China Gezhouba Group Company Limited (CGGC) and another Chinese consortium, Sinohydro.

Daily Trust learnt that the proposed structure of the contract stipulates that Sinohydro would cover 70 per cent of the project while CGGC would execute the remaining 30 percent.

But sources involved with some of the details said the key factor delaying the project is a clash of interests involving Presidency officials as well as some powerful former leaders.

Tortuous history

The Mambilla hydro has had a torturous history dating as far back as 1982 when Messrs Bennie and Partners prepared the first feasibility studies for the project.

Sources close to the project told Daily Trust that the first scope of the project was 2,600 megawatts and it was handled by a German consulting firm, Lahmeyer around 2005.

Lahmeyer did extensive engineering studies and came up with project scoping and bill of quantities.

But since March 2011, a new project consultant, Coyne et Bellier, a hydro division of Tractebel Engineering of France, was brought to replace Lahmeyer.

Between 2004 and 2006, tenders were placed and bids were received for Lot 1, which was the civil and hydraulic segment.

In 2006, CGC/CGGC won the lot 1 tenders for about $1.4 billion, and by May 28, 2007, the contract was signed.

Also, between 2006 and 2007, Lot 3 was advertised by the Ministry of Power. Tender was harvested by early 2007 but was never evaluated, a source told Daily Trust.

The Lot 2, which has the electro-mechanical segment, comprising turbines, pumps and generators, was left alone and "till date nothing happened to that," the source said.

Suddenly in 2009, the Ministry of Power cancelled Lot 1 contract given to CGC/CGGC.

Since then, the project has been reviewed and re-scoped from the original concept by the new consultant, which is said to be backed by Vice President Muhammad Namadi Sambo, sources said.

The endless intrigues

The French project consultant, who is said to have been paid more than N2 billion, has been insisting that the project should be awarded as a "turnkey" project and not in 3 lots. This means that it should one single contract.

On the other hand, the CGC/CGGC, which is backed by the Chinese government, is bent on restoring the sanctity of the first contract of Lot 1.

It was gathered that the vice president's group, spearheaded by a Nigerian diplomat in China, has been putting pressure on the power ministry to hand over the whole project on a turnkey basis to Sinohydro, without going through tender.

The CGC/CGGC, it was learnt, is not leaving any stone unturned in reclaiming its earlier contract, to the extent of threatening that there would be no funding from the Chinese authorities for Mambilla at all.

A truce, it seems, was reached between the CGC/CGGC and Sinohydro as the contract was awarded to the two consortia to be undertaken on a build, operate and transfer concession agreement, at the cost of $3.2billion, with the Federal Government contributing 15 percent of the sum as its counterpart funding.

Sinohydro Corporation and China National Electric Engineering Corporation (CNEEC) are already executing the Zungeru hydro power project in Niger State, which would generate 700 megawatts at the cost $1.3 billion.

Speaking to Daily Trust, a former deputy speaker of the House of Representatives, Alhaji Babangida Nguroje, who hails from the Mambilla area, expressed concern over the delay of the project.

"Though money has been appropriated for the project, nothing is taking place at the site now. The project is still at the preliminary stage," he said.

Nguroje said the people of the area are tired of hearing excuses being given for the delay of the project, which include that the design was not done right.

"The Federal Government should come and finish this project for the benefit of our community, and the country at large," the former deputy speaker said.

Ministry silent

Daily Trust severally went to the Federal Ministry of Power in Abuja seeking for comments as to the status of the project and why it was taking long to take off, but the efforts were not successful.

For almost three weeks, the ministry's spokesperson Kande Daniel kept on assuring this newspaper that the ministry would respond but that she needed time. The response never came by the time of going to press last night.

An official at the Chinese embassy in Abuja provided this response to our enquiries: "We have noticed that Mambilla Hydroelectric Power Project, upon completion, could relieve power shortage that Nigeria is currently experiencing, and thus is of great significance to the economic and social development of Nigeria.

"The Chinese companies are willing to be engaged in the construction of the project. We hope the parties concerned could solve relevant legal issues and left-over problems in an appropriate way, so as to create favorable conditions for the star-up of the project."

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