Home Business Senate orders BPE, ICRC to reverse  Zungeru Power plant concession

Senate orders BPE, ICRC to reverse  Zungeru Power plant concession

by Business News Report

Senate has ordered the Bureau for Public Enterprises(BPE) and the Infrastructure Concession Regulatory Commission(ICRC) to as a matter of urgency reverse the concession of the Zungeru Power Plant in Niger State, just as it  resolved that BPE and ICRC should rescind the concession of the Zungeru Power Plant forth with. According to the Senate,  the two agencies of government went ahead with the concession of the power plant despite its earlier resolution to put on hold the concession exercise until the power plant is completed and tested. The Senate has also urged the  BPE  to keep to the commitment made before the Committee, to concession the ZHPP only after it has been completed, tested and commissioned; and accordingly a new time table for the concession process be adopted by the BPE to allow time for the actualisation of key contractual milestones that are critical to the success of the proposed concession and also make room for full compliance with the EPC contract between the Federal Ministry of Power and the Contractor.

 It also agreed to intimate the National Privatisation Council about its decision,  asking BPE and ICRC to apply the brakes until the project is completed and tested. Resolutions of the Senate were sequel to the consideration of the report on the ongoing bid to Concession the 700 MW Zungeru Hydro- electrical Power Plant in Niger State by the Chairman, Senate Committee on Power, Senator Gabriel Suswam. The Senate has also asked the  Federal Ministry of Power to liaise with all the stakeholders to the concession of the ZHPP in order to resolve all identified constraints that will frustrate the noble objective of the concession. 

These include: 100% completion and testing of the Plant to confirm that 700MW was delivered by the contractor; completion of the 35km 132kv transmission line to Tegina Substation as a precondition for the evacuation of the 700MW to be generated from the plant; resolution of dispute over unsettled variation claims made by the Contractor against the Federal Ministry of Power; unpaid contractor and project consultant invoices; need to conclude the payment of compensation and resettlement of affected communities at the site of the project; extension of the Project Contractor’s contract from 28th December, 2023 to 23rd June, 2024 which is the end of the defect liability period; and engagement of an EOM contractor to test the plant to confirm that 700MW is what has been procured by the FG and concessioned to the successful concessionaire. The has thus mandated the  Federal Ministry of Power and other relevant MDAs to the proposed concession of the ZHPP to  ensure transparency in terms of budgetary releases made by the Federal Government for payment to the Project Consultant or to cover other aspects of the ZHPP outside the loan secured by the Federal Government to finance the project.

The Senate also resolved that it would along side other  relevant MDAS to the concession of the ZHPP would  ensure vigilance in any Public Private Partnership (PPP) involving Government’s power assets to ensure that Government is not shortchanged in the process but such transactions gives the Government and people of Nigeria value for money spent on such assets. The Senate also asked  the  BPE and ICRC to adopt a common position on the tenure of the ZHPP concession but in the event that they are unable to reach a consensus on the tenure of the concession, the recommendation of the ICRC as the apex regulator of Federal Government’s concession arrangements should prevail. The Zungeru Power Plant was commissioned with a contractual mandate to the contractors to build a facility that will transmit additional 700 megawatts to the national grid. The plant was to be funded from loan from China.

In his presentation, Suswam who noted that from what his Committee had gathered, the Zungeru Power Plant would not be able to evacuate the required power as it was yet to be completed, said thaf  the action of both BPE and ICRC, going ahead with the the concession of the Zungeru Power Plant has left the Federal Government seriously shortchanged, lamenting that the bidding of $70 million per annum for 30 years was grossly far too less than the $2.2 million so far expended on the project by the Federal Government. Supporting Suswam was the Chairman,  Senate Committee on Public Accounts, Senator Matthew Urhoghide, who  said that it was important to ensure that the 320KVA transmission line was installed before the power plant is handed over to the concessionaire. In his own contribution, Senator Sani Musa, wondered why the BPE and by extension the Federal Government rushed to conclude the concession even as a number of issues including the settlement of over 44 displaced  communities and the naming of the power plants were yet to be resolved.

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