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Source: Compassnews, February – 1 – 2010

Mr. John Ayodele, Executive Director, Operations of Power Holding Company of Nigeria Plc (PHCN), in this interview with CHARLES OKONJI, said though the electricity company is facing some challenges, it is committed to providing stable power supply for the industrial growth of the nation.

THe Federal Government was not able to deliver the targeted 6,000MW by December. What went wrong?

Actually, the 6,000 MW was a target. That target was set as a way of ensuring that Nigeria has electricity. So, it is a figure and it is not the biggest problem we have. The figure could be 4,000 MW, 7,000 MW or 10,000 MW. That is not the point. The point is that the Federal Government set a target of 6,000 MW, hoping fully well that the 6,000 MW will meet the demand of the nation. The 6,000 MW were set in 2007. From 2007 to date is almost like two years in the life of old plants. So, while we are recovering some plants, some others are also going down.

You may say we should have known it would go down. I cannot know what will go down because it is just like human being. If you have a population of 100 million and old people account for 80 million, you cannot tell anybody this is how the population will look like in two or three years. You can only guess that if God permits that these people should live long enough, this is what they are going to get. It is the same with the power set. We have these old plants and we are counting that the plants that were working in 2007 would still be working. Therefore, the addition could still be put into the system to make up for the shortfall. We identified a few plants to make up the shortfall.

You may also ask again, why the shortfall? A lot of people have assumed that money have been pumped into the sector.

There is no doubt about that because we have never got as much money in the sector as we have got now. But money is one aspect of it, while the timing of the money is another one.

If you give me money at a time that I cannot spend, it still remains money I cannot spend.

You may equally ask, why can I not spend it? Most of these power plants are proprietary items. We need to get the manufacturers to come and do it.

Manufacturers do not have lay-about staff, waiting for you. A lot of time we tell the manufacturers to come and do the work and they would tell us that they would look at their calendar and they would not be able to come until about six months time. In this situation, there is nothing you can do about it.

We have a contract we have with Afam Power Plant, which was signed in 2008, but the company, Siemens, did not come to us until September last year. By the time we signed the contract in 2008, the company was already into its 2008 calendar and it could not fix us in any of its openings until September last year. So, it should have started in March last year, it did not start doing until September or October. Due to this factor, some of these plants that we expected would come on stream did not come on stream because we are still working on them.

It is basically in Afam that we are expecting two of the 138 MW plants to come up. We signed the contract with Siemens to rehabilitate one in 2008 and it is only about a month ago that they completed it. So, we are able to meet one out of two.

The second one will not be ready until about the end of the first quarter of this year. When you shut down a plant you know why you shut down the plant, but when you are doing the repairs you never can tell what else went wrong with it.

Like the one we started working on in October, it was when we started cracking that we realised that we had other problems, which we did not envisage. This is typical of power plant.

It is like your own vehicle when you feel it is the brake that has problem and you later discover it is not the brake but it is something else. Not that one is trying to build up excuses because the question is always like: you should know the definite problem with the power plant. There is nothing definite about power plant, which is the difference between it and others.

In Delta, which we expected extra 200 MW, up till now we have not completed it because despite the fact that there is money, the contractor could not mobilise for one reason: they are afraid of the Niger Delta issue. Until the amnesty came in, which was about September last year, the contractor was not able to mobilise.

Even when the amnesty was declared, the contractors still needed to look at the terrain before they could move in. So, we have problem of people coming to Nigeria to execute some projects because they are afraid of their lives. For this, we did not start this project until around October when they were sure that the amnesty seemed to be working.

Prior to that, we expected that by August last year, the project would have been completed, but after signing the contract they told us that we should make arrangement for security.

How do you guarantee security when many of these foreign contractors already have in their countries’ website that they should not go to Nigeria? Beyond this, we still have plant that should come outside PHCN, which is Shell’s Afam plant.

Shell too despite its money still could not meet up its target. The company will be meeting it up in the first quarter of this year.

So, 250 mega watts out of what we budgeted for are all there. Now, the final thing is that there is still gas problem.

As at today, we have about 5,000 MW. We can only run between 3,600 MW and 3,800 MW, which is what gas can permit us to run.

Remember that the hydro plants are also there and these things must be merged. When there is water we can afford to do thermal repair work. When the water is going because water is seasonal, we expect to run more of thermal units than hydro. So, we manage water like that.

But when there is no thermal we run hydro units beyond what we should run on them to the extent that when we need hydro we will not get it because the country needs power.

So, gas supply is a major challenge to the industry.

Gas supply is not within the purview of the Ministry of Power. It is a different ministry that is saddled with gas supply. We have no control over the gas supply.

Somebody may say that you know that gas will be a problem, what steps did you take?

I think people should realise that this one country – Nigeria. And we have one government. Inside the government we have people responsible for gas and inside the government too we have people responsible for machines and power.

The key issue is: can I be saddled with the work of another ministry? I would say the answer is, no. Every ministry or every agency has its responsibility and if we should all do what we should do, things will work out well.

I cannot put any blame on Nigerian National Petroleum Corporation (NNPC) or anybody because they all have their own challenges. And I cannot speak for Shell or Chevron or NNPC for gas supply.

My own is to tell them: “I need this volume of gas,” which we have done several years ago.

Just like as I am complaining that there are some slippages in our own machines, they too have their own slippages and I sympathise with everybody because they are doing all they can to supply the gas but it is not there. We are also doing our own part to get the machines ready.

But the beauty of it today is that if we have gas we can meet the nation’s need without anybody asking where is 6,000 MW or where is 7,000 MW or where is 10,000 MW. What Nigerians need is electricity.

Even as we are talking now, there is great improvement in the supply of electricity, which is the improvement we want to sustain because that is what 6,000 MW represent.

When I switch on light and it is there, whether it is 6,000 MW or 7,000 mega watts is absolutely irrelevant. So, what we are working on is how to consolidate on the gain that we have in the improvement in the power supply.

We must not slip back. Rather, we should be improving in generation, transmission, distribution and expansion. Our effort is to make everybody have electricity and kick-start the industrial growth of the nation and making the economy to be on the sound footing.

We understand that Nigeria was supplying electricity to Niger Republic. What is the situation now?

We have bi-lateral agreement with Niger Republic every country has bi-lateral agreement, which is an international commitment.

We supply electricity to Niger Republic and we also supply to Benin and Togo but what we supply to them are commitments that we made long before you and I ever dreamt of even working. The issue of Togo and Benin started as far back as 1976. So, it is not a recent affair.

To me, it is a good venture. It is not a question of what, ‘I do not have, I am giving to somebody else, but you are selling and making more money.

They are even paying more money than us, but that is not the key issue because we are supposed to meet our domestic obligation. Actually, we are trying all we can to meet our domestic obligation, but we cannot say because we have domestic power supply problem we cannot look beyond our borders.

I can tell you that electricity is one of the solidified things that make Nigeria to be saved without perpetration from all these smaller countries.

I give you an example. If you have only one rich in one town you know you have a problem because the poor people around you will either decide that they want to eliminate you or they join you to say, “this is our man,” and carry you on their shoulder.

If we go to Niger Republic as PHCN, I know how people hail us. It helps to create good harmony between countries because they know there is something mutually beneficial in the relationship.

So, that peace we have between Niger Republic and Nigeria is basically what I can tell you that 80 per cent is as a result of the electricity we supply to that country.

We must keep it up because the price of war is more than the price we are paying to supply the electricity. The price of peace – sacrificial peace – can be very expensive.

It is the same that goes for Benin and Togo. They are neighbouring countries and you find towns just divided by river.

If one of the towns has light and the other one does not have you will not expect peace to exist there. Really, what we are doing is not only meeting our bi-lateral agreement, but it is a means of peace resolution and peace maintenance between us and our neighbouring countries.

How many mega watts are we supplying to Niger Republic and how many mega watts are we also supplying to Benin and Togo?

They are very small. What we are supplying to the two segments is less than what Victoria Island is receiving. If you take a look at that, you know that that is not the biggest problem we have. I cannot tell you a specific mega watt we supply to them because it fluctuates and that is why I just gave you an example. What goes to Victoria Island alone is more than what we supply to Niger Republic, Benin and Togo.

Why do you rely on foreign engineers to rehabilitate your power plants when you have engineers in PHCN?

We make use of our engineers but they are not the manufacturers. The engineers in PHCN are maintenance people; they are not designers of machines and they are not manufacturers of machines.

So, when there is time to do a major overhauling, the owners of the machines must be called upon because you cannot source the spare parts from elsewhere.

It is the international thing that goes around because people try to keep the integrity of their products and for that reason, they are very strict on who they sell their spare parts to.

If you are not licensed to operate on a particular machine and to rehabilitate it, they will not sell their products to you.

We are not licensed agents in PHCN and so, we may not be able to just call on them to sell to us their spare parts. They are things they will sell to us and they are things they will not sell to us.

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