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Senate and the IPP projects

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THE Independent Power Projects (IPPs) which were designed to boost the nation’s power generation capacity are key to the life and success of the current administration just as they were to the administration of former President Olusegun Obasanjo which initiated them.

At this time, however, the stakes are higher because power generation, transmission and distribution have become a weapon of both political engineering and a constant issue in economic discourse.

President Goodluck Jonathan, whose administration came on board in May 2010, has taken more than a passing interest in power generation. He has in fact made the issue the cardinal focus of his administration as he stated recently that he needed only one term in office to right the wrongs in that sector.

It is, however, emerging that some clogs in the wheel of progress are about truncating the power sector. Just as some forces relegated the fiery Sango which is the logo of the National Electric Power Authority (NEPA) to a toothless bulldog, some combined forces appeared set to ensure things don’t work in that sector, IPP or not.

The revelation came at a recent hearing of the Senate Committee on Gas, where the Presidential Adviser on Power, Professor Bath Nnaji, revealed that unless the Federal Government handed off bankrolling the IPPs, efficiency in the sector might not be guaranteed.

Notwithstanding the perennial cry over power failures, it appears some operators in the power sector are unconcerned and they have continued to behave with impunity.

Though Nnaji was diplomatic, he, in a way, hit the nail on the head when he said that efficiency could not be guaranteed in the face of government ownership and control of the power projects. He said that in the face of different items competing for government attention, funding might also become an issue. In the 2011 budget, he said that the reality was already staring the sector in the face following the failure of the Budget Office to allocate any fund to the gas to power project.

Nnaji told the Senate Committee that the government planned to, before the end of the year, ensure efficiency and availability of power in the country.

The professor stated that lack of funds to build pipelines to deliver gas to power plants was also stalling government’s plans to boost power generation.

He declared that while government was seeking alternative channels of funds, the possibility of attaining the 40,000 megawatts by 2020 as projected was at risk.

He said, “There is no way we can’t shy away from infrastructure if we want to grow the economy and power is critical. I want you to look at it very well because this is key, but government alone is not going to fund it. The private sector will have to look for money to come, because the plan is for government to develop the infrastructure to deliver the gas to the power plants and then hands off power generation and distribution in 2011.”

He said lack of budgetary allocation was also hindering progress in the gas-to power project.

He stated further, “For power to reach the 40,000 megawatts projection by the 2020, there is need for rapid growth of 3,000 megawatts annually, which could drop to about 1,500 megawatts annually after 2020. If we don’t build the gas link to the thermal stations, I think there will be a problem. The gas pipelines are critical to the power projects.”

According to him the power projects could not be put to use without the gas pipelines, adding that “there is the need for appropriation funding and third party funding. Something has to be done and quick to ensure that there is no delay on the part of the NNPC in completing this project.

“Beginning from this year, government will reduce investment in power generation and distribution. Government will increase investment in transmission of power and gas,” he said.

What Nnaji did not say at the Senate hearing is that inefficiency in the power sector is a hydra-headed monster which must be caged. The nation has to do that soonest to avoid the mistake of empowering a monster like it happened in the case of the Nigeria Telecommunications (NITEL). PHCN’s men have in their own rights started constituting serious impediments to the nation’s economy. Jonathan needs to know the danger at hand as constituted by PHCN men before he goes to sleep on his desire to turn Nigeria around in four years.

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