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Published On: Fri, Sep 15th, 2017

Mambilla power plant contract

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Mambilla power projectThe Mambilla power project at Gengu, Taraba state, may come on stream soon, given a renewed federal government interest in it. Proposed by a military administration in 1972, the hydropower project has remained on paper for 45 years – a result of a lack of will, fiscal challenges and political power-play.

Power, Works and Housing Minister Babatunde Fashola announced the plan to revive the project at the end of the August 30 cabinet meeting presided over by President Muhammadu Buhari. It was the first major policy decision of the president since his August 19 return from “medical vacation” in the UK. Fashola said, “Several efforts have been made to bring the project to reality since 1972, which is about 45 years ago, but I am happy to announce to you that this government approved the award of the contract today through a joint venture with a Chinese civil engineering company for the engineering contract, including civil and electromechanical works, for $5.792 billion.” Converted to the local currency, it is N1.140 trn.

The construction of the power plant, according to the minister, will be jointly funded by Nigeria and China, the latter through its Export-Import (Exim) Bank. The funding ratio is 15 percent to 85 percent. The project involves 4 dams, one the size of a 50 storey building. Two others will be 70 metres high each and the smallest 50 metres. And there will be a 700 kilometre transmission line.

The potential economic benefits of the project, no doubt, are enormous. On completion, it is expected to contribute 3,050 mega watts of electricity to the national grid. At present, this stands at under 4,000MW. The federal government hopes that the project “will really unleash the potentials that have been reported about Mambilla: agriculture, tourism and also energy.

“It will also help Nigeria to strike a big blow to the climate change issue and fulfil its commitment under the Paris agreement because this is going to be renewable energy, coming also at a relatively competitive cost.”

We commend the Buhari administration for finding the political will to restart this long forgotten project. It has long been accused, by the opposition, of lacking in economic vision. This is a sign that the vision is there. However, much as we applaud this, we should warn Nigerians that the benefits of the project will not be immediate. It will not be finished until 2023, a distant 6 years away.

This is where we foresee a problem. Buhari’s first term ends in the next two years. If his APC presidency fails to get a second term in 2019 and an opposition party comes to power, the project is sure to suffer a setback. The incoming administration may not scrap it but will simply deny it funding. No new governing party in Nigeria, that was in opposition before, wants to continue with the programmes of its predecessor. It wants to start its own. Policy discontinuity is the reason why the country today has many white elephants all over the place.

A second problem will be one of distribution. How the 3,000 MW that Mambilla will generate will reach the end user is what the minister did not say. As we earlier said, the present power generation level is about 4,000, but the privatised distribution companies (DICOs) distribute under a half of this due to decaying infrastrucure inherited from the defunct PHCN and their unwillingness to invest in new infrastructure.

It does not make any economic sense to generate power that cannot be used. We believe that generation and distribution of electricity should go hand-in-hand for it to have a signigicant Impact on the national economy and the lives of citizens.

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