Queries over budgets for transformers, Katsina wind farm

There is a growing concern among industry watchers over some planned spending by the Federal Government in the power sector, including N397 million allocated for purchase of transformers for distribution companies despite privatization and the increase in electricity tariff.

Also, there is worry over N1 billion voted for generation of 10mega watts of electricity from the Katsina Wind Farm.

With the privatisation of the successor companies of the defunct Power Holding Company of Nigeria (PHCN), the distribution sub-sector was handed over to private investors.

Under the spending sub-head, the government plans to buy 75 pieces of 500KVA transformers for installation in Abuja as well as Imo, Anambra, Abia and Edo states.

The Ministry of Power is also budgeting N634, 979, 698 for coal-to-power generation scheme in Enugu, Gombe, Benue and Kogi states. Details of the planned spending on the coal-to-power generation scheme are not clear, but The Guardian recalls that the government had given licences to some independent producers to generate power from Nigeria’s coal deposits.

Prior to the enactment of the Electric Power Sector Reform Act of 2005, the Federal Government was responsible for policy formulation, regulation, operation, and investment in the Nigerian power sector. It was, therefore, with joy and a great sense of relief that Nigerians received the November 1, 2013 handover of the generation and distribution firms under PHCN to private sector operators who had paid and bought substantial shares in the utilities. The plan by the ministry to now buy transformers for the distribution companies is raising some dust among industry watchers.

The ministry is budgeting over N1 billion to generate 10 mega watts of electricity from the Katsina Wind Farm, a project currently rated as 98 per cent completed and ‘fully funded’ by the ministry. The planned spending is allegedly captured twice in the budget for same purpose. One of the provisions has N963, 392,832 voted for the generation of 10MW from Katsina Wind Farm, while another provision seeks N132, 392,832 for the generation of 10MW from Katsina Wind Farm.

Ministry officials and the minister’s media handlers did not respond to The Guardian’s inquiry on the issue. But the ministry had last May indicated that the project was 98 per cent completed and almost due for commissioning.

Another literature on the ministry’s website indicates that government has funded the projected in full.
The document notes in part: “A contract for the construction of a 10MW Wind Farm at Katsina was awarded by the Federal Government in favour of MessrsVergnet SA of France at a contract sum of €18,500,000 plus N494,020,000 with a completion period of 24 months.

“The project has so far been fully funded and project implementation has progressed very smoothly despite a few challenges relating to customs clearance at the ports.”

Former Permanent Secretary in the Ministry, Godknows Igali, told newsmen last May that the test-running of the facility had begun with 37 turbines, while five of the turbines had successfully passed test-run.