Posted by Taiwo Adisa, Abuja | 28 November 2017 | 1,662 times
The Joint Senate Committee on Gas and Power, Steel Development and Metallurgy has ordered the suspension of the planned inauguration of the 215 megawatts Kaduna power plant, over inconsistencies in the contract implementation.
The joint committee gave the order following a one-day investigative hearing on the need to save the plant.
The power plant, which was inaugurated in 2009, was already three years behind the scheduled inauguration.
Senate President, Dr Bukola Saraki, who declared the hearing open, said the major objective of the hearing was to diagnose issues and challenges threatening the take-off of the Kaduna power plant and also examine why there was a shift from the use of gas to diesel as the source of fuel for the plant.
Saraki, who was represented by Senate Deputy Whip, Senator Francis Alimekhena, said the Senate was aware that the Federal Government, through the Nigerian National Petroleum Corporation (NNPC), was on the verge of awarding the contract for the construction of the 40x614km Ajaokuta-Abuja-Kaduna-Kano gas pipeline, adding that the Senate was
convinced that the use of gas to power turbines was sustainable and environmental-friendly.
“It is surprising that the Federal Ministry of Power, Works
and Housing appears to have jettisoned the use of gas to power the Kaduna power plant and, instead, opted for the construction of Automobile General Oil (diesel tanks), which is 60 per-cent higher in cost when compared with gas,” he said.
Lawmakers at the hearing said they were unimpressed by the reasons given by the Permanent Secretary of the Ministry of Power, Mr Louis Edozie, who defended the change of the parameters of the plant from a gas-powered plant to diesel-powered plant.
Representatives of the ministry had told the committee that it planned to inaugurate one of the eight units in the plant in January and that the unit would run on diesel.
The diesel fuel is expected to cost the country N46 million per day.
The lawmakers were, however, alarmed to hear that the cost would be cheaper if the plant was to run on gas.
Chairman of GreenVille LNG, Eddy Van Den Broeke, who led his team to address the committee, said the company had a memorandum of understanding with the Kaduna Gas Plant to build storage facilities for the plant at no cost.
He also stated that while the plant would produce a kilowatt of electricity at N79 if run on diesel, it would produce the same kilowatt of power at N37 on gas.
He said his company had, as a result of the MOU it signed with the power plant, invested $400 million on its gas plant in Roumuji, Port Harcourt, Rivers State.
“In 2014 when the parameters were signed it was agreed that
LNG is most competitive. We have invested $400 million after which people in the ministry decided to change the parameters.
“It will cost $200 million more to use AGO (diesel) because there is no other fuel available that can replace LNG and GreenVille. I would want the ministry to give me one cent of response on this change of theory,” he said.
According to him, apart from the functional gas plant, Greenville already imported 250 trucks meant to evacuate gas to the power plant before the change of parameters by the ministry.
Co-chairman of the joint committee, Senator Albert Bassey, told the permanent secretary to inform the Minister of Power, Works and Housing that the Senate had halted the planned inauguration, adding that “I feel very disappointed.”
Senator Bassey added that “we are insisting that it will be cheaper to run the plant with gas and gas is environmental- friendly. Let your Minister know we cannot be taken for granted.”
Chairman of Committee on Power, who is also a co-chairman, Senator Eyinnaya Abaribe, also decried the decision of the ministry to change the parameters of the plant from gas to diesel.
He said the ministry should put the planned inauguration on hold, to enable the committee to embark on a further physical examination of the plant.
“We have heard a lot of disturbing things and we have all seen that we have put the cart before the horse. Everyone in this hall today has now seen why we ask questions. We ask questions when things don’t seem to be going the right way.
“You see one price at N79 and the other at N35, why do you go for the higher cost which is not cost effective? If you are going to spend N46 million daily to run a plant and you said it is temporary, that is not effective.
“If you start one plant and the rest don’t come up in eight years, we need to save this project from becoming another white elephant,” he said. (Nigerian Tribune)
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