$2bn Power Project: Fresh threats, as FG, Siemens take conflicting positions

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Power Project

Uncertainty over Siemens’ role
Project distribution draws discontent

By Emma Ujah, Abuja Bureau Chief, Udeme Akpan, Prince Okafor,
Ediri Ejor

Barely one year to delivery, the Nigerian Electricity Road Map project  under the Presidential Power  Initiative (PPI), appears  to be facing fresh hurdle that may derail or delay the execution and delivery of additional power to consumers as the Federal Government hands over the selection of local partners for the $2 billion Nigerian Electricity Roadmap Project to Siemens, a German  firm handling the PPI. The Ministry of Power was initially slated to float a bid for the selection and contract awards.

But it is not yet clear if Siemens is willing to accept this responsibility as t6he firm rebuffed efforts to get them confirm the development.

Under the PPI, Siemens was tasked to ensure 7,000mw; 11,000mw and 25,000mw of power are delivered to consumers by 2021 and 2023, before further up-scaling supply to 25,000mw.

A Presidency source had told Vanguard that the government gave up the plan to directly engage the local partners following external pressures against exposing the project to political and other vested interests in the process of the contract award.

Vanguard learnt there was also considerations around making Siemens take responsibility for failures which may arise from the appropriateness of the technology being deployed as well as the local content issues.

The source stated: “The success of the initiative is tied to selecting credible, competent local partners to work as sub-contractors with Siemens.   This nation had, in the past, suffered to re-pay foreign loans taken for projects that were poorly implemented or that were never implemented at all.

“The negotiating team reminded Siemens many times of credibility deficit, and that this administration will not tolerate any shoddy job under any guise and we made this very clear to the Siemens.

“It is therefore critical to have local partners who are already key players in the power sector, that know what the nation’s power needs are and how to go about them, rather than selecting newly formed companies established for the purpose of partnering Siemens on the initiative.   That is the only way Nigerians will get value for their money.”

Confirming the development, Mr Aaron Artemis, Special Adviser, Media and Communication to the Minister of Power, Mr Sale Mamman, stated: “Yes, indeed there are local firms competent enough to work at the level of Siemens. Siemens has been tasked to select local firms so that they can take responsibility for any failure.”

Controversies over Siemens role

But speaking on condition of anonymity, an energy expert said: “The project is a rudderless ship with a ripped sail leaking slowly but surely. There is no one in charge. The German firm has refused to be responsible for project delivery, so we will have to find a local champion to execute them.

“The German firm just wants to supply their equipment, but not install them. From findings, they do not want to have joint liability with the local contractors. In essence, they want to hand over the equipment and take their money.”

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The Executive Director, Research and Advocacy, Association of Nigerian Electricity Distributors, Mr. Sunday Oduntan said: “The company has just signed a Memorandum of Understanding (MoU). Much still needs to be done in designing and execution of projects. As DISCOs, we would wait and see how things unfold before commenting.”

Managing Director/CEO, Siemens Limited, Ms Onyeche Tifase, declined to comment on the subject. She, rather directed that the firms spokesperson, Titilola Taiwo should handle the enquiry.

But Taiwo also declined comment in an email to Vanguard, stating: “We have been instructed not to take any interviews until the government makes an announcement”.

Experts in divergent views

Commenting on the development, the former Chairman, Nigerian Electricity Regulatory Commission (NERC), Dr Sam Amadi said: “It is a business transaction, between Nigeria and the German Government.

“The Federal Government had earlier asked the German Government for support. With their own wise decision, the support they gave Nigeria is a private sector called Siemens, which is a leading power equipment manufacturer in the World.

“Since the liability is on the Federal Government, Siemens is harping on local partners deployment.

“It is a good development for the government to be driving this with the best corporate practice and Siemens has better capacity than government to select better project partners.

“The critical thing in this project is access to equipment. There is no rocket science about installing equipment that Nigerian engineers are not capable of. Siemens should be more focused on governance, managerial and the technology availability. Nigerian local firms can partner with Siemens and get the job done if they are properly selected and under proper supervision.”

Nigeria Electricity Consumers Advocacy Network

The National Secretary, Nigeria Electricity Consumers Advocacy Network (NECAN), Mr. Uket Obonga, said: “The Siemens should be given the latitude to select local electric companies that are competent and have requisite experience in managing and executing power projects in generation, transmission, and distribution sub-sectors. This will enable the German company take full responsibility for the quality of work done.

“Considering our experience in the past with projects of this nature, allowing the Federal Government to select local partners for the foreign investor will no doubt lead to failure and abandonment. Moreover, energy companies could be compelled by those in government and power agents or cronies with little or no experience in project management and execution, which will eventually lead to delays and abandonment.

Project distribution draws discontent

On project distribution in Nigeria, Obonga said: “The lopsided distribution of the projects across the country is a reflection of the attitude of the current Buhari’s government. It is not surprising that between the North-West (Buhari’s zone) and the South-West (the VP’s zone) 82 projects will be allocated while the South-East and the South-South zones will be given two (2) projects each.

“This attitude of the Buhari’s administration further exposes the disdain and contempt of those who are pulling the levers of power they have for the people of the two zones.

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“However, the men that should be held   accountable for the shoddy treatment of the two zones are;   Rotimi Amaechi, Godswill Akpabio, Timipre Sylva, Chris Ngige and Ogbonaya Onu of the APC-led Federal Government.

Hon. Uche Onyeagocha, immediate past Secretary to the State Government, Imo State has decried what he described as the marginalization of the South East geo-political zone in the distribution of the power projects in the first two phases of the Siemens deal.

He said that the zone had suffered a lot of discrimination under the present administration and that steps should be immediately taken to correct the imbalance.

The $2 billion Siemens National Electricity Road map to be financed through external borrowing will be the a burden for all Nigerians in terms of repayment of the loan.   Why should some zones be so neglected as if they are not part of Nigeria?” he queried.

As contained in the Road Map document seen by Vanguard, most of the projects in the first two phases would be sited in the North West, and South West.

For instance, Eko Disco was allocated 9 projects; Ikeja 31; Ibadan five, Abuja 14; Kano 14; Kaduna 23; Jos four; while Enugu Disco which covers the entire South East was allocated two projects; Port-Harcourt two; and Benin one.

But Artemis denied the allegation that the project’s distribution was lopsided.

According to him, “The first phase of the work is concentrated in the Port Harcourt and Benin distribution districts, contrary to your information.

“The North West currently has the weakest distribution network and therefore deserves more attention.”

Vanguard

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Source: Vanguard News

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