•As Fashola underscores Ministry’s determination to complete hitherto unfunded, awarded electricity projects to gain time
• Regrets delay in passage of Budget, but describes 30 percent Capital Expenditure provision as significant departure from past administration
The Federal Government is set to boost electricity supply with the completion of 47 new transmission projects across the country, Power, Works and Housing Minister, Mr. Babatunde Fashola SAN has revealed in Abuja.
Fashola, who fielded questions as guest on the popular Channels Sunrise Daily programme, said that there is a plan to complete 47 transmission projects in this year’s budget, which, according to him, could be achieved even though the passage of the budget has been delayed.
The Minister, who was responding to questions on specific steps being taken by Government to improve electricity supply in the country, declared, “There is a plan to complete 47 transmission projects in this year’s budget and I believe we can do it even if the budget is passed tomorrow”.
He also disclosed that in addition to those projects, government was also looking at other sources to achieve incremental power, adding that the road to incremental power lay in completing projects using a variety of sources including wind.
Pointing out that incremental power would be achieved through a mix of power sources, the Minister added, “In the last four weeks, we have approved a framework to start licensing about 14 Solar power projects. Cumulative power from all is about 1,286mw. But they will be different companies, some have 100mw and some have 250mw and some have 50.But all these are being processed to come on stream, because that is the real solution, to get more power on and, in the process, give relief. And so in that sense, I am optimistic that we will turn that corner”.
Other areas the government is looking at, according to Fashola, is in revamping the only Coal Power Station in the country, the Oji River Power Station, which he visited recently adding that the station has long fallen into dilapidation.
The Minister said in order to gain time and achieve better success in boosting electricity supply; government has decided that, as much as possible, it would not embark on any new projects adding that focus would be on the completion of already awarded projects.
“As to the question about our timing of the projects, the interesting thing is that our focus is that as much as possible, there will be no new projects. There are so many projects awarded that are not being funded and therefore if we put money on those projects, we can gain a lot of time”, he said.
Fashola, who reiterated that the drop in electricity supply across the country is due to the fact that not enough power was being produced, explained that out of the 25 power plants in the country, only three are hydro-powered while the rest are gas powered adding that because of the low pricing of the product for local consumption, the production was low.
He explained further that while the gas produced for local consumption was selling at $1.30, the gas for export was selling at $4 adding that the anomaly in pricing made the production of the commodity unattractive to investors in the business.
On the appropriate pricing of gas, Fashola, who said the issue has been dealt with, added, “The price for gas used to be $1.30 for local consumption. Gas exported out of Nigeria for sale used to be $4. That gap has been bridged now by the addition of $2 to bring it closer, it is now $3.30”.
According to him, there was no incentive for people to produce gas for local consumption at the old price. “If you were a business man and you have markets of $1.30 and $4, where would you go? Of course the logical thing to do is to go to the $4 market”.
“As a result of that, it has been inputted down the pricing mechanism and that is one of the reasons why you have the New Tariff Order because you couldn’t have that differential in a major raw material and not have a corresponding adjustment in the cost of the final product”, he said.
According to him, “The power being generated comes from about 78 out of 140 turbines and they are largely fired by gas. Now the power has gone down because we have gas outage in one of the gas pipelines.
“We have an installed capacity of 12,000megawatts. We have about 140 turbines installed. But the available capacity today is about 8,000mw both installed and available and this simply means that some turbines are down, some projects haven’t been fully completed and so on and so forth”, he said.
Pointing out that much of what is supplied for local consumption is associated gas which comes from the drilling of oil, Fashola said when the gas pipeline failed, about February or March this year, the 78 operational turbines dropped to about 50 because there was not enough gas.
“We had to get the Ministry of Petroleum Resources and to Shell, the operator of the field, to quickly start the process of procurement. That is the reality”, the Minister explained adding that as at the beginning of this week energy report made available to him showed that the nation was producing 3,393mw.
The Minister, however, assured that the problem, though looks herculean at present, was not insurmountable. He declared, “But let me be very clear, this problem can be solved, but it needs detailed and methodical approach and the first thing we want to do is to supply more gas because without gas, I am like a generator owner who has no fuel so I can’t power my plant, and I know that the Ministry of Petroleum Resources is working hard first to overcome that problem”.
He said plans have been agreed on to supply the struggling power plants across the country which did not have gas, adding, “They were errors of planning of yesterday but they are errors that can be corrected. There were omissions of yesterday, the proper planning is to build a power plant and arrange that simultaneous, when the plant is completed, gas input is also completed”.
Reiterating his earlier promise that the new tariff order would result to incremental power, Fashola declared, “Incremental power will come from the plan to get more gas, incremental power will come from completing more power projects”.
“So, Azura has started in Benin. Zungeru, where there had been a court case that has set the project back by three to four years, has been resolved and construction work is going on now in Zungeru. Aba and Enugu Discos had a standoff in court for about two to three years; money was being lost; we have resolved all that now”, he said adding that before the end of the year, “because the project was reported to have been very far gone, that can be resolved and as we do that, many people will get connected”.
On power outage, the Minister, who noted that in the last one year there were parts of the country did not have energy at all, because they were not connected like some parts of the North East that had their transmission lines damaged, now have energy as the lines have been restored. The import of this, he explained, was that the inadequate power being generated would now have to be shared with the areas just reconnected to the Grid.
“We have completed transmission projects in places like Okada, in places like Makurdi; So that 5,000mw that went down to 3,000, those people who didn’t partake at all are now getting some energy. For them the story is a mixed story”, he said.
On the delay in the passing of this year’s Budget, Fashola, who described it as regrettable, however, attributed it to what he called “blending of the team” which is made up of the Executive and the Legislature adding that consultations are going on at the highest levels of the two parties to resolve the grey areas.
The Minister said what would be important in this year’s budget was that it could put more funds into the public space, adding, “I must reemphasize this point, a budget where you have 85 percent, almost 90 percent recurrent expenditure really is a budget that excludes the larger majority of the society because it just goes to government spending”.
“Now government official are important, public servants are important for driving the process, but those who formulate budget policies must be careful not to over spend on the less than one percent who drive the process. The 30 percent Capital Expenditure planned in this year’s budget is a significant departure from the old and it he