Energy and Power
ICRC Moves to Re-energize Six Dry Port Concessions
By Tony Obiechina, Abuja
In a bid to get the six Inland Container Depots (ICDs) located in each of the geo-political zones of Nigeria to become operational, the Infrastructure Concession Regulatory Commission (ICRC) on Wednesday, met with the Nigerian Shippers’ Council (NSC), owners of the project and the Concessionaires.
The meeting, which was at the instance of the ICRC, the agency of government under the Presidency, charged with the responsibility of regulating all government concessions and Public Private Partnerships (PPPs), sought to find solutions to the factors hindering the completion of the dry ports whose contracts were signed since 2006.
A statement by Manji Yarling, acting head, Media and Publicity of ICRC on Thursday, the Acting Director General of the Commission, Mr. Michael Ohiani, who declared the meeting open, stressed that 16 years after the concession contracts were signed, some of the ICDs were still at 5 percent completion while only two had gotten to 55 percent and 68 percent, hence the need for the meeting.
The Acting DG said, “We want to rub minds and come up with how we can make progress: what are the challenges taking into consideration that these projects have already gotten Mr. President’s attention and more so, we need to decongest our seaports. Also when completed, these ICDs will bring the required benefit to our citizens and our country Nigeria”.
“We are not unaware that at the material time that the contracts were signed, ICRC as a Commission had not been set up, so no proper Outline Business Cases (OBCs) were done for the projects like we now do, but I want us to have a frank discussion so that we can chart a way forward.”
The Commission reminded the concessionaires and NSC that by its Act, it is to take custody of all PPP contracts including the ones for the ICDs.
The concessionaires and states where the ports are located include: Oyo state (Ibadan) with 50,000 Twenty-foot Equivalent Unit (TEUs), by Catamaran Logistics Ltd; Abia State (Isiala Ngwa) with 50,000 TEUs by Eastgate Ltd; Plateau State (Jos) with 20,000 TEUs by Duncan Maritime Nig. Ltd; Kano State (Dala) with 20,000 TEUs by Dala Inland Dry Port Ltd.; Katsina State (Funtua) with 10,000 TEUs by Equitorial Marine Oil and Gas Ltd. and Borno state (Maiduguri) with 10,000 TEUs by Migfo Nigeria Ltd.
Based on the last assessment presented to the ICRC by the NSC, the percentage progress made by the concessionaires were: Oyo state – 10%, Abia state – 5%, Plateau State 29.7%, Kano state – 55%, Katsina State – 68% and Borno State – 5%.
However, the concessionaires told the ICRC that the 16 years journey had been fraught with various challenges which had hampered any progress that could have been recorded.
The concessionaires complained of poor cooperation from state governments who mostly delay in meeting their own part of the agreement, for instance in the area of land provision.
According to them, another major challenge they emphasised was the lack of narrow gauge rail lines in and out of the dry ports which they noted was important to make the operation of the ports efficient.
They added that access to funds also remained a major issue even as banks and foreign investors make unreasonable demands for assets and bank bonds before the release of funds.
The concessionaires unanimously stressed the need for the ports being constructed to be given the status of port of origin and destination and also to be registered with the International Chamber of Commerce (ICC) upon completion.
In view of the delay in execution, the concessionaires stressed the need for a new agreement, pointing out that an agreement started in 2017 between them and the NSC but it was yet to be cleared by the Federal Ministry of Justice on behalf of the Federal Ministry of Transportation.
They however commended the ICRC for its intervention and also appreciated the NSC for their support so far, noting that they were confident that under the administration of President Muhammadu Buhari, the contracts will be sorted out.
The concessionaires pledged their commitment to see the concession to conclusion and the ports operational even as two of the concessionaires, Equatorial Marine Oil and Gas Ltd for the Katsina ports and Dala Inland Dry Port for the Kano Ports declared that their ports will commence operation before the third quarter of 2022.
Mr. Usman Iya Abbas, Managing Director of Equatorial Marine Oil and Gas Ltd informed the ICRC team that the Funtua port was already at over 85 per cent completion and was ready to launch before the end of the second quarter of 2022.
“We hope to commission this project before the end of the second quarter and the ports will become functional immediately. We are lucky to have great relationships in the shipping industry and with major shipping lines.
Hon. Ahmed Rabiu, MD of the Dala Inland Dry Port Ltd., concessionaires of the Kano Inland Port also hinted that the construction of the container depot was already nearing completion. He assured that the company was working assiduously to ensure project completion and take off before the end of March 2022.
On his part, Dr. Ewalefoh of the ICRC who chaired the technical session of the meeting assured the concessionaires of the continuous support of the Commission, charging them however to send a detailed update of the contract status reports to the ICRC.
He further enjoined the other four concessionaires yet to make remarkable progress in their contract execution to emulate the milestone recorded by the other two who were finalizing their constructions, so that the ports can yield the economic benefits for which the concessions were granted.
Business News
Edun Seeks Liquidity for Power Sector as NDPHC Declares Calabar Best Power Plant
By Eze Okechukwu, Abuja
The Minister of Finance and Coordinating Minister for the Economy, Wale Edun yesterday declared that liquidity was the major hindrance required by the troubled power sector to achieve the desired result of producing steady Power in Nigeria.
This is as the Managing Director of Niger Delta Power Holding Company (NDPHC) Chiedu Ugbo informed the Senate Committee on Power in Abuja yesterday that the Calabar Power Generation Company under its ownership was the best performing power plant in the country.
In his submission to the Committee investigating the controversial Make up Gas (MUG) Reprocessing Deal Involving the Ministry of Finance, NDPHC, Calabar Generation Company Limited and ACUGAS Limited, the Minister of Finance pointed out that the need for liquidity into the Power Sector remained the key to unlocking it.
The Minister who made the submission through his Special Assistant, Mallam Dahiru Moyi said the agreements on Gas supply between NPDHC and ACUGAS Limited was inherited by former President Muhammadu Buhari in 2015, following after the agreement was signed in 2011 during President Goodluck Jonathan’s administration.
According to him, “just as the Ministry of Justice was not aware of the contract agreement, the Ministry of Finance was also not part of it from the beginning but since government is a continuum, the Ministry of Finance later came into it for the purpose of facilitating the required liquidity.
“The issues on ground about contracts agreements being investigated by the Senate Committee on Power is not about restructuring but providing the required liquidity which the Ministry of Finance is doing through collaboration with the Nigerian Liquified Natural Gas (NLNG).
“Since NLNG pays Gas in Dollars, the Ministry is collaborating with it for a practical solution of bringing liquidity into the age long contract agreement through Deed of Transfer.
“Make Up Gas (MUG) belongs to Calabar, Calabar belongs to NDPHC and NDPHC belongs to Federal and State governments with the Federal Government having 52.68%”, he said.
In his own submission before the Committee, the Managing Director of NDPHC, Chiedu Ugbo said the company as a result of the Gas supply agreement with ACUGAS Limited was taking Gas from three out of five units and generating power from Calabar plant to the National Grid which according to him was the best power plant in the entire country.
He said NDPHC went out of its way to construct an 80 kilometres gas pipeline for utilization of MUG in Calabar and Alaoji power plants.
He however lamented that problems relating to systemic transition, frequency and voltage issues have not made the firm achieve the desired results.
In his remarks, the Chairman of the Committee, Senator Enyinnaya Abaribe (APGA, Abia South) thanked the stakeholders for giving the Committee clarity on the issue but added that it was still an ongoing investigation.
Energy and Power
Oil, Electricity Workers’ Unions Mobilise for Planned Strike
The Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) has directed its members to comply with the directive of the two labour centres to begin an indefinite nationwide strike on Monday.
Its General Secretary, Mr Afolabi Olawale, in a statement on Saturday, said the union was committed to ensuring total compliance with the directive.
Recall that the Nigeria Labour Congress (NLC) and Trade Union Congress of Nigeria (TUC) declared an indefinite nationwide strike to begin on Monday, to express their grievances over the proposed new minimum wage.
.In a joint statement signed by NLC President, Mr Joe Ajaero and TUC President, Mr Festus Osifo, the centres declared the strike over the tripartite committee’s inability to agree on a new minimum wage and the hike in electricity tariff.
Afolabi said the union was concerned and disturbed with the insensitive attitude of the federal government “to the very critical issue of negotiating a new minimum wage for Nigerian workers”.
“This is in view of the various socio- economic policies of this administration that have impoverished the working people of this country.
“Leaders of our great union at all levels, from the units, zones and branches, should immediately put all processes in place to ensure total compliance with this directive.”
Also, the National Union of Electricity Employees (NUEE) said it was mobilising its members to embark on the strike following the directive of NLC and TUC.
The Acting. General Secretary, Mr Dominic Igwebike, gave the directive to the members in a statement.
Igwebike said that along with the reasons of inconclusive negotiations on the minimum wage and electricity tariff hike, apartheid categorisation of Nigeria electricity consumers into bands was another, to embark on the strike.
“Given the above, all national, state, and chapter executives are requested to start the mobilisation of our members in total compliance with this directive to ensure the government does the right thing as stated above.
“The withdrawal of services becomes effective on Sunday 2nd June by 12.00 midnight, “ the union leader said. (NAN)
Business News
FG Secures $500m World Bank Loan to Boost Electricity Distribution
By Tony Obiechina, Abuja
In a strategic move to address the identified gaps in the Electricity Distribution Companies (DisCos), the Federal Government has secured a $500 million loan from the World Bank.
In a statement by Head of Public Communications, Bureau of Public Enterprises ((BPE) Amina Tukur Othman on Thursday, approval for the facility was given by World Bank Board of Directors on February 4, 2021.
According to the statement, “this funding supports the Nigerian Distribution Sector
Recovery Program (DISREP) aimed at improving the financial and technical
performance of the DisCos”.
The Distribution Sector Recovery Program is designed to enhance the
financial and technical operations of the DisCos through capital investment and
the financing of key components of their Performance Improvement Plans (PIPs),
which have been approved by the Nigerian Electricity Regulatory Commission
(NERC).
Key areas of improvement include:
• Bulk procurement of customer/retail meters and meter data
management systems.
• Implementation of a Data Aggregation Platform (DAP).
• Strengthening governance and transparency within the DisCos.
• Program Components
• The DISREP comprises two main components:
• Program for Results (PforR):
• Allocation: $345 million
• Purpose: Support the implementation of selected PIP components.
Others include
• Implementation: Bureau of Public Enterprises (BPE)
• Investment Project Financing (IPF):
• Allocation: $155 million
The Purpose is to finance the procurement of meters, a Data Aggregation
Platform, and Technical Assistance.
The DISREP loan, particularly the Investment Project Financing (IPF) component, is expected to significantly benefit the Nigerian Electricity Supply Industry (NESI) by:
• Closing the metering gap
• Reducing Aggregate Technical, Collection, and Commercial (ATC&C)
losses
• Improving remittances and liquidity for the DisCos
• Enhancing the reliability of power supply
• Increasing transparency and accountability within the DisCos.
The $500 million DISREP loan from the World Bank offers concessional financing
with more favorable terms than commercial bank loans. This will enable the DisCos to:
1. Invest in critical distribution infrastructure.
2. Improve ATC&C losses.
3. Increase power supply reliability.
4. Achieve financial sustainability in the power sector.
5. Enhance transparency and accountability.
The statement further explained that significant progress has been made in the preparation of the DISREP Program, with several key milestones achieved, and approval by the Federal Executive
Council (FEC) on August 3, 2022. execution of the Financing Agreement by the
Federal Ministry of Finance, Budget and National Planning, and the World Bank,
adoption of the Program Operations Manual (POM) by BPE and TCN, obtained
Legal Opinion from the Attorney-General of the Federation, Execution of the
Subsidiary Loan Agreement, effective declaration of the DISREP Program on
January 31, 2023, inauguration of the DISREP Technical Committee on May 6,
2024, inclusion in the Federal Government Borrowing Plan, approved by the
Senate Committee on May 16, 2024.
To ensure repayment assurance, the Bureau of Public Enterprises sought and
obtained approval from the Nigerian Electricity Regulatory Commission (NERC)
and the National Council on Privatisation (NCP) for a structured repayment
hierarchy.
The structure prioritizes payments including, Statutory Payments (Taxes), Repayment of CBN market loans, Market obligations , Repayment of DISREP loan and DisCos’ net revenue.
This structured repayment plan aims to mitigate risks associated with repayment
uncertainty and defaults, with regulatory sanctions imposed for any defaults.