My grand road, electricity vision, by Fashola
WITH fresh ideas, the Minister of Power, Works and Housing, Babatunde Raji Fashola, is set to revolutionize the country’s infrastructure.
The minister, who spoke yesterday in Abuja while unveiling his agenda for the three sectors under his purview, noted that a large percentage of the difference in the proposed 2016 budget would go to capital projects.
On the electricity sector, Fashola called for patience from Nigerians, regretting the reforms proposed in the Nigeria Electricity Power Sector Reform (EPSR) Act did not take off till November 2013, eight years after the enabling law came into being.
Highlighting the problems in the sector, Fashola said: “There are a number of issues that beset our gas sector such as the environmental issue and the availability of gas infrastructure such as pipelines and the matter of pricing which are all the responsibility of other ministries.
“Subject to budgetary approvals and financing, the Ministry of Petroleum indicates its ability to build certain critical pipelines to transport gas to the power plants that will add another 2,000 mw to our stock of power within 12-15 months.
“Of course the appropriate pricing of gas and its impact on tariff is another matter entirely. If the local market was offering $1.30 per unit of gas, which has been reviewed recently to $3:30, and the international market is offering about $4:00 and above, your guess is as good as mine where supply will be available and where it will be short.
“For emphasis and clarity, let me state that the previous administration had actually approved the tariff in January 2015, but did not fully implement it.”
He also announced that the Nigerian Electricity Regulatory Commission (NERC) and the electricity distribution companies had been mandated to meet and come up with what he described as ‘fair market tariff’.
In the meantime, he appealed to Nigerians over the upcoming electricity tariff increase, stressing that a good tariff system would guarantee good electricity supply.
The former governor of Lagos State, however, insisted that the Discos must commit to certain conditions in the area of providing meters, transformers, expansion of network, among others, in line with the proposed new tariff order.
He was also emphatic that priority would henceforth be given to local meter and transformer manufacturers in procuring the items for the sector.
On whether a cartel of generator importers is hindering the growth of the sector, he said: “There is no evidence that generator dealers are a cartel in the power sector. They have been filling a gap and I have no doubts that they have the capacity to adapt.”
He stressed the key targets in the electricity sector: “Apart from these, there is a 10MW wind energy project in Katsina nearing completion, a 215MW plant in Kaduna and the 3,050 MW plant in Manbilla, Taraba State all of which need to be completed.
“Our first priority is to get contractors to finish ongoing transmission contracts to enable us to transport the electricity being generated to the Discos to distribute.
“Our second priority is to ask the governors to help us identify and enumerate their most populous industrial and commercial clusters where manufacturing, fabrication, welding and related productive work is going on, especially by small businesses and to see how we can use the existing legal framework to attract embedded power supply to these people who must be ready to pay for the power.”
Speaking further on efforts to boost transmission, he added: “We have identified a total of 142 projects of which 45 are at 50% level of completion and about 22 can be completed within a year.”
He noted that about N40 billion would be needed to complete over 22 major transmission companies across the country, admitting however, that the existing budgets for TCN could hardly do much.
Fashola also said efforts were ongoing to amicably resolve the lingering impasse between Geometric Power and the new owners of the Enugu Electricity Distribution Companies over the 144 Aba Independent Power Plant project as the matter had been brought to the attention of President Muhammadu Buhari.
In the Works sector, Fashola said work on the Second Niger Bridge had resumed in earnest while stressing that immediate attention would be on about 200 road contracts that were abandoned because of funds constraints.
His words: “Records available from previous budgets show that the last time Nigeria budgeted over N200 billion in a year for roads was in 2002.
It seems that as our income from oil increased, our spending on roads decreased.
“Our ability to achieve connectivity of roads depends on capital spending in 2016 to pay contractors and get them back to work.”
He went on: “Our short-term strategy will be to start with roads that have made some progress and can be quickly completed to facilitate connectivity, prioritising the roads that connect states and those that bear the heaviest traffic.
“As at May 2015, many contractors have stopped work because of payment, and many fathers and wives employed by them have been laid off as a result.”
On workers laid off by construction companies, he stressed: “Some of the numbers from only four companies that were sampled, suggest that at least 5,150 workers have been laid off as at March 11, 2015; and there are at least 200 contracts pending, on the basis of one company per contract.
“If each contractor has only 100 employees at each of the 200 contract sites, it means at least that 20,000 people who lost their jobs can return to work if the right budget is put in place and funded for contractors to get paid.
“The possibility to return those who have just lost their jobs back to work is the kind of change that we expect to see by this short-term strategy.”
He added: “In order to make the roads safer, we intend to re-claim the full width and setback of all federal roads, representing 16% and about 36,000km of Nigeria’s road network by asking all those who are infringing on our highways, whether by parking, trading, or erection of any inappropriate structures to immediately remove, relocate or dismantle such things voluntarily. This will be the biggest contribution that citizens can offer our country as proof that we all want things to change for the better.
“For clarity, it is important to say that although the state governments own 18% of the total road network of about 200,000km, while the local governments own the balance of 66%, the 16% owned by the Federal Government carries an estimated 70% of the total traffic because of their length, width and inter-state connectivity.”
On government’s plans for the housing sector, he drew attention to its resolve to adopt the Lagos Home Ownership Mortgage Scheme (HOMS) model.
Fashola said: “If we complete our ongoing projects, and we get land from the governors in all states and the Federal Capital Territory (FCT) to start what we know, using the LagosHoms model, we should start 40 blocks of housing in each state and FCT.
“We expect state governors to play a critical role here, by providing land of between 5-10 hectares for a start, with title documents, and access roads or in lieu of access roads, a commitment that they will build the access roads by the time the houses are completed.
“We see this leading to potential delivery of 12 flats per block and 480 flats per state, and 17,760 flats nationwide, for a start.”