Siemens $2bn Power Deal: FG emerges with detailed projects – Report

Siemens $2bn Power Deal: FG emerges with detailed projects  – Report

…To upgrade 105 substations, construct 70 new substations, install 3,765 transformers, others

…As indigenous firms lobby for contracts

THE Federal Government, Wednesday, emerged with detailed projects involved in the $2 billion Power deal, under the Presidential Power Initiative (PPI), have concluded plans to take off the project.

Specifically, the projects, which have been endorsed by the Federal Ministry of Power, Transmission Company of Nigeria, TCN, Siemens and 11 Electricity Distribution Companies, DISCOs include, the upgrading of 105 substations, construction of 70 new substations, installation of 35 new power transformers, laying of 5,109 kilometres of distribution lines and installation of  3,765 distribution transformers in different parts of Nigeria under the first phase of the deal.

Siemens has the mandate to ensure that 7,000 megawatts, mw, 11,000mw and 25,000mw of power are delivered to consumers by 2021 and 2023, before further up-scaling supply to 25,000mw.

However, in the report – Nigeria Germany Siemens Deal – obtained by Vanguard, the Ministry of Power, disclosed that the projects were proposed by the Transmission Company of Nigeria (TCN) and the DISCOs.

Transmission lines

A breakdown showed;  ‘Short Term High Impact 132/33 KV Mobile Stations’ are to be built in Kano, Yola, Akwa Ibom, Anambra and Lagos states.

Another ‘Short Term High Impact 132/33 KV (60 MVA facilities)’ are to be built in Benin, Ondo, Abuja and Warri, Delta State, while ‘1A Brown field project’ is to be built at Elelenwo, Port Harcourt, Rivers State.

According to the report, another, ‘1A Brown field project’ would be built at Rumosi, Port Harcourt, Rivers State while nine ‘1B facilities’ would be constructed at the Ministry of Defence, World Trade Centre, Abuja, Jos, Ibadan and four locations in Lagos.

Distribution lines

Of the 5,109 distribution lines, the report stated that 725, 1,180, 52, 262,932, 84, 135 and 62 would be built under Abuja Electricity Company, Benin Electricity Company, Eko Electricity Company, Enugu Electricity Company, Ibadan Electricity Company, Ikeja Electricity Company, Jos Electricity Company and Kaduna Electricity Company respectively.

It added that 541, 627 and 509 kilometre of lines would be built under the Kano Electricity Company, Port Harcourt Electricity Company and Yola Electricity Company respectively.

Transformers

Of the proposed 35 Power transformers; four, three, 13, 10, one, two and another two would be installed in Benin, Lagos, Enugu, Ibadan, Jos, Kaduna and Port Harcourt, River State.

The report added that of the proposed 3,765 Distribution transformers; 500, 425, 500, 1,019, 300, 325, 140, 300 and 256 would be installed under Abuja, Eko, Ibadan, Ikeja, Jos, Kaduna, kano, Port Harcourt and Yola DISCOs respectively.

Business opportunities

Meanwhile, investigation showed that many indigenous contractors were already in Abuja to lobby for the various components of the jobs.

According to the report, the Siemens deal would create many multiplier effects, especially contract opportunities for indigenous contractors.

Specifically, it stated that opportunities exist in the areas of soil investigation and site surveys, civil works, installation, erection (commissioning) of equipment, logistics, supply of meters, data centre hosting, system support, data collection, power system modelling and analysis.

Experts

However, commenting on the development, the former chairman, Nigerian Electricity Regulatory Commission (NERC), Dr Sam Amadi, had said: “It is a business transaction between Nigeria and the German Government. “The Federal Government had earlier asked the German Government for support. With their own wise decision, the support they gave Nigeria is a private sector called Siemens, which is a leading power equipment manufacturer in the World.

“Since the liability is on the Federal Government, Siemens is harping on local partners deployment. “It is a good development for the government to be driving this with the best corporate practice and Siemens has better capacity than government to select better project partners.

“The critical thing in this project is access to equipment. There is no rocket science about installing equipment that Nigerian engineers are not capable of. Siemens should be more focused on governance, managerial and the technology availability. Nigerian local firms can partner with Siemens and get the job done if they are properly selected and under proper supervision.”

Nevertheless, the National Secretary, Nigeria Electricity Consumers Advocacy Network (NECAN), Mr. Uket Obonga, had said: “Siemens should be given the latitude to select local electric companies that are competent and have the requisite experience in managing and executing power projects in generation, transmission, and distribution sub-sectors. This would enable the German company take full responsibility for the quality of work done.

“Considering our experience in the past with projects of this nature, allowing the Federal Government to select local partners for the foreign investor will no doubt lead to failure and abandonment. Moreover, energy companies could be compelled by those in government and power agents or cronies with little or no experience in project management and execution, which will eventually lead to delays and abandonment.”