• Assures on local content
• New plant to be ready in 48 months, to be privatised at completion
THE Federal Government yesterday activated a Memorandum of Understanding (MoU) between it and a Chinese Consortium Sinohydro/CNEEC Corporation for the immediate commencement of work on the construction of 700 Mega Watts (MW) Zungeru Hydroelectric Power Project in Niger State.
This followed the nod given to the contract by the Federal Executive Council some weeks ago.
The construction of the plant is coming 30 years after government first did a feasibility study on it.
But it will not be business as usual as government warned that Nigeria's local content policy of engaging local workforce and sourcing available raw materials locally must be respected.
Minister of State for Power, Hajiya Zainab Ibrahim Kuchi, who spoke at the signing of the contract in Abuja, said, the project, which is valued at N162. 9 billion, would be completed in 48 months and that on completion, the Bureau for Public Enterprises (BPE) would be invited to privatise the plant like other utilities in the power sector.
The ministry assured that it would immediately release the sum of $309 million representing 25 per cent of government's counterpart funding for the project while the Exim Bank of China is to provide the remaining 75 per cent of the contract sum.
The eventual managers of the plant are expected to generate sufficient revenue for repayment of the loan when the plant generation takes off.
Kuchi said: "The feasibility studies and engineering design was reviewed in 2008 by Coyne et Bellier and a report submitted which recommended that an installed capacity of 700MW consisting of 4 X 175 MW plan units representing downward review of the initial capacity of 950MW should be adopted. This recommendation was accepted by the ministry.
"The ministry applied and obtained from the Bureau of Public Procurement (BPP) in October 2012, due process Certificate of No Objection for the award of contract in favour of CNEEC-Sinohydro Consortium. The Federal Executive Council at its 44th meeting eventually approved the award of the implementation of the Zungeru project to CNEEC-Sinohydro with a completion period of 48 months including a defect liability period of 12 months.
The minister added: "On completion of the project, a total of 700MW of electricity would be added to the national grid leading to an increase in the power delivery to small and medium scale industries and households, thereby enhancing sustainable power supply to the country.
"In addition, the project has the prospect of enabling multiple commercial activities expected to take place in Zungeru and its environs such as building projects, agriculture, and food processing industry, as well as generating thousands of jobs for the Nigerian economy. This government is aware of the over 1,000 direct employment opportunities that this project would provide, which will consequently enhance our economy. We are also conscious of the fact that there would be a lot of local content components of the project, which would be handled by competent and experienced Nigerian companies. The contractor is enjoined to be conscious of this important fact and give effect to its full realisation as the ministry is committed to the accomplishment of this goal."
