The Federal Government and Siemens AG recently signed a six-year roadmap agreement for developing the power sector in Nigeria with a target of 11,000 megawatts (MW) by 2023. Daily Trust however reports that there are many unanswered questions by the handlers of the pact and the operators in the sector.
The German company, Siemens AG, had its global Chief Executive Officer, Mr Joe Kaeser, sign the Memorandum of Understanding (MOU) along with President Muhammadu Buhari at the State House in Abuja. But there have been mixed reactions from stakeholders in the sector since the agreement was unveiled.
According to a statement from Siemens, the scope includes rehabilitation, upgrades and expansion of transmission and distribution networks and power generation. The programme will consist of three phases. The first phase will raise power supply to 7,000MW by 2021. Another phase will take the electricity supply capacity to 11,000MW by 2023 while the third phase will increase it to 25,000MW from 2025.
Siemens’ proposed project shrouded in secrecy
Experts refer to the meeting of German Chancellor Angela Merkel and President Buhari in August 2019, saying it was yielding result. But they are worried that details of the deal which cuts across the entire power sector value chain remain scanty.
For instance, many of them said apart from the technical terms on the targets for the grid capacity increase. There is yet to be a detailed plan of how the programme will be financed, the role of the private operators who control the Distribution Companies (DisCos) and the GenCos, except for TCN which is a full government utility.
The Managing Director of Port Harcourt DisCo, Engr. Kingless Achefe, said he had no comments because he was yet to get details of the programme although his DisCo is one critical network covering the major South-south area of Nigeria.
It was further gathered that the Permanent Secretary (Power) at the Federal Ministry of Power, Works and Housing, Engr. Louis Edozien, was not properly carried along, even though he holds brief in the power sector in the absence of a minister.
It was alleged that officials at the Presidency, who have little or no expertise in the sector, are handling the programme and that has posed concern for the operators who are struggling already with about N1.3 trillion liquidity crisis in the sector.
The Executive Secretary of Association of Power Generation Companies (APGC), Dr Joy Ogaji, expressed concern that the Generation Companies (GenCos) were not robustly catered for in the MOU, although she admitted that the details remain sketchy.
She said: “There are so many questions, especially as it relates to the commercial impact and also the viability of the GenCos in getting this level of capacity to government without their issue being looked at.
“From 2013 to 2017, they have consistently been taking 3,000MW even when I make 7,000MW available. So now, how do I procure more gas to make that 7,000MW available when I don’t have effective gas contract because of the payment volatility.
“Even the network is an issue. They proposed to work on TCN and distribution networks but the issues are many. We are reviewing it and we will possibly publish our concerns when we are done,” Dr. Ogaji stated.
Track records of Siemens’ project delivery
Our reporter gathered that Siemens Nigeria got contracts for the installation of the Supervisory Control and Data Acquisition (SCADA) three times, for the national grid under the defunct PHCN and present Transmission Company of Nigeria (TCN). However, TCN has repeatedly said the SCADA project failed due to a myriad of issues.
The SCADA and Energy Management System (EMS) were meant to automate the transmission grid so the System Operator (SO) of TCN can monitor all operations on the national electricity grid. With SCADA and EMS, it could generate data, track offenders, and monitor all the core networks of generation, transmission and distribution.
Experts say that could avert the many system collapses that have continually put the entire Nigerian nation in blackout for several hours daily.
An insider at Siemens, who was privy to the SCADA contracts, confirmed the incomplete execution of the projects due to management issues at TCN, lack of capacity of TCN staff and none availability of the fibre optics and other core infrastructure for the communication backbone.
Also, new substations including the NIPPs were built and not integrated and the systems were not automated. “A lot of things contributed then, but basically communication is one key. And there is human element because TCN was grossly understaffed in terms of capable hands for SCADA.
Still on failed projects, a source at TCN said Siemens is handling a transmission project in the Lagos axis but has not delivered the project after the timeline elapsed, even when its Letter of Credit (LC) was funded 100 per cent.
The official said TCN was already implementing the Transmission Rehabilitation and Expansion Programme (TREP) to deliver 20,000MW by 2021 which, he said, is far below the 7,000MW that Siemens proposed for the same year.
Multiple sources observed that even if the Federal Government was to intervene in the power sector, considering that projects are financed by tariffs paid by Nigerians, there was need for the competitive procurement of those who would execute such projects.
“There is Anti-trust law in the western countries, especially Germany, which is the homeland of Siemens; it is already a violation to be solely handpicked without any competitive procurement process,” an official noted.
When contacted, the Managing Director/CEO of Siemens Nigeria, Mrs. Onyeche Tifase, referred our reporter to the Head, Communications/spokesperson at Siemens Nigeria, Titilola Taiwo, to respond to our emailed enquiries.
In her response, the spokesperson said: “Unfortunately, we are no longer granting interviews on the signed agreement. The project is for the Federal Government and we are leaving all future communication to the president’s media team.”
However, an official of Siemens who spoke in confidence, said he had no permission from the management to speak. He said, “Whatever Siemens is coming to do now, we should be able to avoid the pitfalls and we should be able to deliver or help the electricity industry to improve.”
