…Assures Shell, other major gas suppliers of prompt payment for gas
Given the availability of sufficient gas to power it, the Afam Thermal Power Plant in Port Harcourt, Rivers State, will before December this year, deliver 340 Megawatts of electricity to the National Grid towards the consolidation of the Federal Government’s drive to achieve Incremental Power for the country.
The Minister of Power, Works and Housing, Mr. Babatunde Fashola SAN, who disclosed this in Afam in the Oyigbo Local Government Area of the State at the weekend, said with the work on the 240MW capacity Afam III Plant at advanced stages and the burnt transformer for the 100MW Afam 1V now repaired, the two should deliver a combined 340MW energy to the grid before the end of the year subject to the availability of sufficient gas to fire them.
Interacting with newsmen after inspecting the Power Station, Fashola, who said all of the turbines and equipment needed for the completion of Afam III were already in the country, added that the only problems left included the provision of access roads and logistics while the burnt transformer that would evacuate the 100MW from Afam 1V had been repaired and in good condition with the turbine.
The Minister, who noted that Government has been working at the Plants in the past 17 to 18 months to restore the place back to its optimum capacity, expressed delight at the progress of work assuring that before the end of the year, 340MW would be added to the National Grid from the facility. “That is part of our Incremental Power Initiative”, he said.
He told the newsmen, “What we have behind us is the Afam III and that is the Fast Power programme in collaboration with General Electric to restore 240MW to that place. All of the turbines and equipment needed for that project is already in Nigeria. So the only challenge we have now is roads, logistics and a few other problems; those are the things I have come to assess here”.
Noting that Afam 1V, “is the only surviving generation unit”, Fashola, who said the surviving Generation units 17 and 18 have a combined output of 100MW, added, however, that the power could not be evacuated due to the damaged transformer which, according to him, got burnt in January 2015.
“That was what was handed over to the Buhari government. So we have worked, we have restored and we have replaced the transformer and it is ready to go”, the Minister said adding, “We are here to assess the progress of the work that we have been doing here in the past 17 to 18 months to get this place back to its optimum capacity. But we now have issues with gas”.
On the steps taken by Government to solve the gas issue, the Minister, who said that the Buhari Government inherited a lot of debts owed to all the gas companies who, according to him, said they would no longer supply gas without payment, recalled that Government recently approved N701Billion under its Payment Assurance programme to ensure that henceforth all suppliers of gas to the nation’s power plants were paid.
He disclosed, “So we are telling Shell to let us separate the previous debt and create a programme to deal with it under the Central Bank of Nigeria programme”, adding, “And now that we have a Payment Assurance programme, we are assuring them that every gas they supply to this place now will be paid for”.
“We have already paid for power produced in January; we have got approval to pay for power produced in February because the bills come in arrears. So they are looking at that and they will come back to us; so hopefully we should add another 100MW to the grid from here (Afam 1V) very soon.”
For Afam V, which, he said, was the last one to be built, Fashola said the plant could not be maintained for four to five years after it was built resulting in so many things being damaged inside it adding that Government was now trying to get it into procurement and fix that.
Assuring that the project would be completed next year, the Minister added, “I think they both have 276MW combined; that is a lot of power again to the grid and that will happen over the next 12 to 15 or 16 months if we can start quickly”, pointing out that he was at the site to assess progress of work in order to deliver the project as soon as possible.
Responding to a question as to how soon the facility would be restored to optimum power delivery, the Minister declared, “As soon as the gas issue is sorted out, Afam 1V, with the capacity to deliver 100MW behind you as soon as we sort out the gas issues; it is the 240MW Afam III behind me if we meet our deadline, we want to finish before December; that will give you 340MW.”
“Then at the back there, Afam V, that is 276MW that will roll into next year; we can’t finish that this year. By December, we should get to 340MW; these are now engineering issues and time tabling and also, of course, continued peace. We have 100MW now that we can’t evacuate because there is no gas to fire it, we have fixed the problem which was a burnt transformer. It has been repaired; the turbine is good, the transformer is good, now we have to go and get fuel to fire the car”, he said.
On the plan of Government for the implementation of the Economic Recovery and Growth Plan recently launched by the President as it concerns the Power Sector, Fashola declared, “Now the programme to deliver this is the Power Sector Recovery Programme which again was approved by the Federal Executive Council”, adding that the programme involved a lot of policies and actions including payments.
“Again you see Government is beginning to implement some of it. The Payment Assurance Programme is one of them; my trip to Washington to negotiate with the World Bank is one of it, the constitution of Boards- the new Chairman Designate of NERC which is pending before Senate is part of this, the constitution of the Rural Electrification Agency’s management and board is part of it; so we are beginning to implement all of the actions and policies”, the Minister said.
Describing the development of the Power Sector as a journey rather than an event, Fashola again declared, “If you are looking for an event, then you are not looking for power. We will get to many bus stops; good bus stops. One bus stop is 100MW behind you; another bus stop is 240MW behind me; another bus stop is 276MW somewhere behind the line. And we will do more of this”.
Responding to a question on the Bonny Road project, Fashola, who assured that it was on the Government’s programme, pointed out that the partnership was on explaining that some issues with the Budget which had apparently delayed the project, had been resolved at a meeting with the leadership of the National Assembly to enable the Federal Government contribute its own counterpart funding with the Nigerian Liquefied Natural Gas (NLNG).
“So we are working with the contractor; I still met the contractor last week. People should be patient; we will deliver on the road to Bonny. The contract hasn’t been awarded. We need to see the final framework when the contract is awarded and that won’t happen until we have a budget. We can’t award contract without a budget. Hopefully we should start this year”, he said.
Earlier, in his opening remarks Fashola had called for peace in the area as an important precondition for successful completion of the Afam Power and other projects saying for people to leave their countries far away and come and build a facility that they could not take away in another country was a leap of faith.
Explaining how it would benefit the community, Fashola said aside the economic benefit to the country, the first investors who experienced a peaceful and safe environment for their assets would spread the word round the investing and business world that the environment was peaceful and safe for investment and the communities would be the better for it.
The Minister assured that the major gas supplier to the plant – Shell- would soon resume supply adding tha he had a very intense discussion with the company over the modalities to henceforth pay for gas supplied and how to arrange for the payment of the backlog.
He told members of the host communities, “I have spoken to Shell and explained that under the Payment Assurance programme they will now be paid for any gas supplied while government sequences the old debts and work out plans to pay them. I told them that they should not allow payment of the old debts to stand in the way of new transaction”.
“I have had an extensive discussion with them. We cannot allow 100MW of electricity to stand idle. If 1MW can power as much as 200 to 250 homes, you can imagine what 100MW can do. That is the case I have had to share; they are responsive to that case, they will come back to me on the way forward, ” he said.
On the demand for good roads, hospitals and schools by the host communities, the Minister pointed out the Federal Government has prioritised the roads based on those that carry heavy traffic and beneficial to more people hence the focus on the completion of the Enugu – Port Harcourt Highway traversing the five states of the South-East of the country.
Noting that the Enugu- Port Harcourt Highway was another road that had fallen into disrepair for many years due to lack of maintenance, Fashola declared, “That is the Nigeria that this administration inherited and we are trying to change. So our focus first is on building the highways that even lead to Rivers State before we now start going into the heart of Rivers State”.
He added, “But we will get there if we are allowed to systematically implement our plans”, adding that the challenge of resource allocation and resource mobilization has made it necessary to prioritise.
“Those are the hard choices that we have to make and we have started by dealing first with the road that comes into Rivers State first, that connects Rivers State with other States in the South Eastern Nigeria so that more people can benefit and if you are patient I am sure it will happen”, he said.
The Minister while noting that there is a procurement plan to fix the road that leads to the Afam facility added that it would be better to wait until the project was completed before working on the roads to avoid damaging them when the heavy equipment for the project would be brought in.
As to the hospitals and schools, Fashola asked the communities to identify the sites to build and forward the survey plans to him promising to see what he could do to assist adding that it made “eminent common sense” that the people that were going to settle in the area would have families who would need the facilities.
On allegation of ill-treatment, Fashola declared, “I don’t think any government sets out to deliberately ill-treat its people. It may not have responded as adequately as you want. Even in our own homes that we don’t always have what we ask for from our parents does not mean that they set out to ill-treat you. So, I think that the understanding of why those gaps exist is important in how we communicate it”.
Giving a brief history of the Afam Power project, Fashola who said the privatisation of the Plant was not completed, added that the plant was developed in 1962, started life with 20MW, grew to almost 1,000MW but was now struggling to deliver only 100MW.
“This is what the Buhari Administration met. Even Afam V that was built in 2001 worked for just a few years and collapsed. Those are the things that this administration is determined to change by a regime of maintenance, by a regime of professionalism”, he said adding that government intends to develop a programme of maintenance so as create jobs from there.
Also in his welcome remarks, the Member representing the Constituency in the House of State’s House of Assembly, Hon. Promise Chisom Dike expressed delight at the visit of the Minister, commending him for his commitment and dedication towards revamping the nation’s Power Sector.
Praising the achievements so far recorded by the Minister, the Honourable Member declared, “I am delighted to say that after more than 50 years of electricity in this country, we are blessed as a community, as a people, to have you here at so short a notice.
“This is an opportunity to meet with you first to say that the community is very happy with your efforts, your bold efforts in the Power Industry in this country. Personally, Honourable Minister, I have been following all the efforts you are making in terms of intervention funds to ensure that this time around we are going to have a sustainable power generation that would be sustained”, he said.