Jonathan inaugurates N16 billion Delta gas project in Warri
HOPES are now high for the commissioning of Geometric Power’s 141MW Aba Power Plant, as President Goodluck Jonathan has intervened to help resolve the lingering crisis that had hindered its take-off.
Also yesterday, President Jonathan performed the long-awaited ground breaking of the N16 billion Delta Gas City project, now re-named Gas Revolution Industry Park (GRID), at Ogidigben and a deep sea port at Gbaramatu, both in Delta State.
Accompanied by Governor Emmanuel Uduaghan and several ministers, including the Minister of Petroleum Resources, Diezani Allison-Madueke, Jonathan said the delay in the exercise was because of the communal crisis between the Ijaw and Itsekiri over a name for the project.
The ceremony was initially shifted from May to November 2014, and then to yesterday, while the Delta State Government mediated in the dispute.
Jonathan said the GRIP would be Africa’s largest gas and fertiliser export processing zone when completed and would generate thousands of jobs for citizens, adding that about 3,000 jobs would be created during the construction phase and many more when completed
“It is my intention to make the gas park most investor- friendly,” he said. “It will be an export processing zone to attract global market. This project will meet world standard.”
He further announced the setting up of a special steering committee, headed by Allison-Madueke, to oversee the project, while reporting to the Federal Executive Council on a weekly basis.
Geometrics Power is presently at loggerheads with the Bureau for Public Enterprises (BPE), which sold aspects of the Aba electricity distribution zone to Interstate (new owners of Enugu Electricity Distribution Company) in spite of a 2005 deal that marked and concessioned the zone to Geometric to feed its power directly to Aba and environs.
The Federal Government in 2005 concessioned Aba metropolis as the only security of the investment in the project instead of the normal sovereign guarantee. We have met the terms of our concession agreement with the Federal Government by building this 141MW power plant with state of the art equipment from General Electric (GE) and rehabilitating the entire distribution network in Aba
A statement yesterday from Geometric Power disclosed that President Jonathan visited the plant in Aba this week and described the situation as man-made error that has to be fixed. Jonathan, who inspected facilities at the plant, was said to have vowed to resolve the issue so that electricity could flow to intended beneficiaries.
Noting that there was no need for more committees on the issue, he promised to a arrange meeting of the three parties to the matter – Geometric Power, Enugu Disco and the Federal Government (BPE, among others).
He was also quoted to have commended the promoter of the project and immediate past Minister of Power, Prof. Bart Nnaji, for his strong heart, stressing that most people in his situation would have had a heart attack.
Jonathan was said to have repeated that comment at subsequent meetings with Aba Peoples Democratic Party (PDP) stakeholders, while Nnaji described the power plant as a child of necessity.
“The desire of Aba industrialists, including the small and medium scale industries, and our desire to contribute our quota to increasing power supply in the nation met over 10 years ago,” Nnaji said.
“We realised that the best way to ensure that this city will quickly have reliable and affordable electricity is to build this off-grid power project that serves the Aba metropolis. Mr. President, this convergence of desire for reliable electricity is what led us to this historic Aba Integrated Power Project.
At that time, I and our development partners from the IFC of the World Bank, the European Investment Bank (EIB) and the Emerging Africa Infrastructure Fund (now known as FMFM), wanted to find a business model for power development in Nigeria that is sustainable, can stand on its own, and can be easily replicated by various investors in other major cities in Nigeria.
“We recognised that the nation will not be able to afford sovereign guarantee for all of its power needs, we therefore developed a model of customised embedded generation that would not require sovereign guarantee.
“Consequently, we set about developing this integrated power project to satisfy the electricity needs of Aba metropolis at a time the Power Sector Reform Act of 2005 was not yet enacted.”
On the contending issues, he noted: “The Federal Government in 2005 concessioned Aba metropolis as the only security of the investment in the project instead of the normal sovereign guarantee.
“We have met the terms of our concession agreement with the Federal Government by building this 141MW power plant with state of the art equipment from General Electric (GE) and rehabilitating the entire distribution network in Aba.
“In addition to the power plant, we have built over 105km of 33KV overhead lines within the Aba metropolis. You can see Mr. President that the steel tubular poles used to build the 33KV line infrastructure is unlike any other in Nigeria.
“We have also built over 40km of new 11KV lines in Aba. We have completed five new sub-stations consisting of the power plant’s 3x60MVA sub-station; four brand new 2x15MVA sub-stations at various parts of Aba town.
“In addition, we have refurbished the only three existing PHCN sub-stations, which were dilapidated, by building three brand new control buildings with outdoor sub-station gantries within the premises of the existing PHCN sub-stations.
To ensure the reliability of gas supply, we built a 27km gas pipeline from Imo River to this power plant, and the gas infrastructure to support the supply of reliable gas to the plant. To date, we have invested over $500 million (or in today’s money over N100 billion) in this project.”
However, Nnaji accused BPE of double selling the Aba metropolis (which includes Aba and Ariaria Electricity Business Districts) – to his firm and to Interstate Electric – as part of the sale of Enugu Disco, “in spite of the fact that the agreement we have with the Federal Government clearly states that whenever there is privatisation, our company has first right to purchase the facility in Aba hence our heavy investment in this project.
“The investors and stakeholders include members of the Aba Business Community, USAID and our banks, especially Diamond Bank. However, the painful fact is that this critical issue has been left festering since November 2013.
“It costs our company $3.5 million in bank interest charges alone, plus over N30 million for insurance coverage and other operational expenses every single month to carry a project that is not yielding any revenue due to the deliberate, hostile and crippling action of Enugu Disco and the BPE over 15 months ago.”