By Kparobo Ehvwubare-Asaba
In what could be described as a subtle way of conducting final bural rite for the multi-billion naira Oghara Independent Power Project, Delta State Government led by Gov. Ifeanyi Okowa during an exco meeting in March, 2022 approved a lease-to-own contract for the Oghara Independent Power Project (IPP) in Ethiope West Local Government Area of the state.
The State Commissioner for Information, Mr Charles Aniagwu, said this while briefing newsmen on the outcome of the State Executive Council (EXCO) meeting presided over by Gov. Ifeanyi Okowa on Friday, 25/03/2022 in Asaba.
Anaigwu said that government had taken the decision of Lease-to-own instead of outright sale as earlier advised to ensure that the state gets value for its investment in the electric power project.
Aniagwu said, “at today’s EXCO meeting, 25/03/2022, we approved the principle of Lease-to-own not outright sale as we were advised before now.
“What we have done now is Lease-to-own where the lessee will now have to fix, operate and bring it to a state where it will work and then begin to pay some amount of money to the state government for a period of time”.
The Genesis of the Project:
In an executive council meeting held in May 2009, Governor Emmanuel Uduaghan, approved the contract award for the acquisition and installation of two Open Cycle Rolls Royce Trent 60wle phase 111 Gas Turbine generators capable of being fired by natural gas and diesel oil. The turbines were to have an installed capacity of 116MW and expected to generate 100MW of electricity for the State Independent Power Plant (IPP) project.
The contract was awarded to DAVNOTCH Nigeria Limited, in partnership with Southern Integrated Energy Limited of United States of America at the cost of sum of $125million (one hundred and twenty five million dollars). At the exchange rate in 2009 of one hundred and seventy six naira to a dollar as at 2009, this translated to twenty-one billion, seven hundred and fifty million naira (N21, 750,000,000.00). Investigations revealed that the state government paid 60% of the above-mentioned contract to the contractor that same year.
The project at that time would have been first of its kind in the State created in August 1991. The project aimed at providing adequate, stable electricity to Deltans, would also have attracted foreign investors and taken many unemployed youths off the streets of Delta State among others positive developments.
But years later the project remains uncompleted and abandoned. So what went wrong? Why has Delta State Government that invested such huge sums of money on the project allowed it to remain moribund? Did the contracting firm fulfill its contract agreement? If so who is responsible for the failure of this project? Well, some of the answers to the above questions find expression in the roles played by Delta State Government led by the duo of former Governor Emmanuel Eweta Uduaghan and incumbent Gov. Ifeanyi Okowa.
This reporter gathered that the idea to build an IPP for Delta State was first mooted in 2000, during the administration of former governor James Ibori. Ibori appointed a consortium of engineering firms to undertake a power survey of Delta State. The Consortium made up of three companies-: Engineering Management Support Limited with office at No. 4 Park Lane Apapa, Lagos, Optimal Power & Control Engineering Limited, Suite 19 Adeniran Ogunsanya Shopping Centre, Surulere, Lagos and George Spiropoulus & Associates, No. 12 Rasak Balogun Street, Surulere-Lagos. The consortium submitted a report that estimated that the power demand for Delta State would be within the range of 440MW and 570MW respectively.
However, Ibori who left office in May 2007, did not take on the IPP project. Gov. Emmanuel Uduaghan who took over from him, having understood that power is critical for the growth of any society and realizing that the 2,400 mega watts of electricity daily generated from Nigeria’s national grid was inadequate, resulting in epileptic power supply to the country’s then 140 million population, decided to generate electricity for Delta State from its abundant natural gas resources. So in 2009, Gov. Uduaghan, awarded the contract for building the IPP project and in 2011 the contract sum for the project was reviewed upwards by two billion naira, bringing the total amount to N23B (twenty three billion naira).
However, further investigation revealed that the above approved sum did not include land acquisition, appointment of Prime/Resident Consults, Insurance coverage, Environmental Impact Assessment (EIA), construction of 132/33KVA transmission line to evacuate power to be generated and construction for gas supply for the IPP project, a development why the project sum was reviewed upwards from N21B to N23B.
Overview Status of Project from Ibori to Uduaghan administration according to our investigations
- Messrs A&A Engineering was appointed as the Prime/Resident Consultant for the State IPP project at an official cost of One billion, one hundred and ten million and one hundred and twenty thousand naira (N1,110,120,00.00) The Consultant produced the following documents:
- Pre-contract Specification document for the IPP project;
- Engineering designs/drawings of electrical, mechanical, civil and ancillary works of the project;
- Bill of Engineering Management and Evaluation (BEME)/Bill of Quantities (BOQ) done.
- A piece of land measuring 600 meters by 1800 meters situated at River Ethiope bank had been acquired by Delta State Government.
- Environmental Impact Assessment had been completed.
- Two Gas turbines which was awarded to Davnotch in partnership with Southern Integrated Limited, USA at an official cost of Twenty-one billion, seven hundred fifty million (21, 750,000,000.00) had been supplied by Davnotch.
- Engagement of Senforce Insurance Brokers Limited as the consultants for the IPP project had been done.
- Procurement of Generators supplied by Siemens, Germany and Transformers from UK had been done.
- Delta Government under Gov. Uduaghan had obtained provisional approval to evacuate power into the PHCN grid.
- Power Purchase Agreement with PHCN was almost completed.
- Gas supply contract with Nigeria Gas Company almost done.
Payments made so far
|1||1. Payment of 60% down payment to Davnotch Nigeria Limited for the supply and installation of 2 Gas turbines|
|2||Payment of Consultancy/Professional fees to A&A Engineering for services rendered by Prime Consultant for Delta State IPP project||N1,110,120,000.00|
|3||Premium and Consultancy fees to Senforce Insurance Brokers for insurance coverage of the State IPP project||N719,375,000.00|
|4||Compensation for land, Environmental Impact Assessment, Design for transmission lines and Power Generation license||N5,120,505,000.00|
Source – Inspection report presented at the 13th Exco meeting in July, 2014 contained in annexure 8.
Gov. Uduaghan failed promise:
On July 26, 2011, Gov. Uduaghan, boasted to journalists during a media briefing that work on the power project would soon be completed, saying he would commission the project before he leaves office as governor in May 2015. The former governor said that with the successful completion of the turbines in Europe, work had reached an advanced stage. He added that he was optimistic that the turbines would be shipped into the country by August 2011, since the design and actual construction of the turbines, which is the major work, was finished.
Gov. Emmanuel Uduaghan
The former governor said that the IPP would initially produce 115 megawatts of electricity adding that the project aimed at giving a boost to the industrialization effort of his administration will also attract direct foreign investment.
Two Rolls Royce Gas Turbines Imported Rolls-Royce turbines as sighted by this reporter at Ibru warehouse, Oghara
Our correspondent gathered that DAVNOTCH Engineering Nigeria Limited as part of the contract agreement supplied the two Rolls Royce Gas turbines at the stipulated time and the turbines are currently kept in Ibru’s warehouse at Oghareki, a five minutes drive to the project site. The turbines were still awaiting installation when the contractor demobilized from site in 2014, further investigation revealed that the said turbines among other equipment has been moved out of the Ibru warehouse, following the approval of the said lease to own by the Okowa led administration.
Gov. Okowa Government inherits IPP Project in May 2015
The State Independent Power Project (IPP), was among the many projects inherited by Gov. Ifeanyi Okowa, when he assumed office on the 29th of May 2015. Since government is continuous, it behooved on his government to complete ongoing projects before initiating new ones. So in 2016, Gov.Okowa, in his desire to ascertain the remote cause responsible for the abandoned IPP project, set up a sixteen man committee headed by Chief David Edevbie to investigate and proffer solutions cum advise his administration on what could be done to revive the moribund multi-billion naira project.
Gov. Okowa also vowed while inaugurating the Committee in 2016 that his administration would persecute anyone found culpable considering the huge resources that the project had gulped.
Edevbe Committee swing into action Olorogun David Edevbie and his team visit to IPP project, Oghara
In 2016, Mr. David Edevbe and members of his committee went on the spot assessment tour to the facility. The delegation included the project consultants, A & A Global, officials of Access Bank who are the financial advisers on the project and representatives of the state’s Attorney-General and Commissioner for Justice. They inspected the buildings and transmitting towers at the site, and the rented warehouse where a large consignment of numerous component parts waiting to be installed were kept. After the inspection, Mr. Edevbe said that the state government was determined to ensure the realization of the Independent Power Project in the state considering the huge challenges that had stalled the project since 2014 as contractor demobilized from site.
Okowa led administration shielded Edevbie Committee Reports from Public
Since the IPP project remains completely abandoned, frantic efforts was made by this reporter to obtain Mr. David Edevbie panel report but all my efforts met with a brick wall. Not deterred Sunreporters wrote a letter, signed by Presley Ajayi under Freedom of Information Act, FOIA and addressed to the State Governor, Dr. Ifeanyi Okowa, copying David Edevbe and the Honourable Commissioner, Ministry of Power and Energy but the letter was not replied until five weeks later when Sunreporters got a letter from the office of the Honourable Attorney-General and Commissioner of Justice notifying that Delta State Government cannot release such documents under this Act and advised to apply for the document through Delta State Freedom of Information Act 2019, an advise acted upon but one of our reporters who went to submit the letter was barred at Delta State Government House gate by security agents who told our reporter that the Governor directed no visitor should be allowed due to the #ENDSARS protest then and our reporter could not submit the letter.
However, the Committee Chairman, Mr. Edevbie, who spoke to this reporter on phone explained that his committee had since submitted its report in 2017 but refused to disclose the recommendations in the report, stressing that Government does not disclose internal reports to reporters. “The committee report was submitted to the governor, we do not disclose contents of internal reports to reporters.”
Mr. David Edevbie, assertion would make one wonder why the report on the IPP project, awarded and financed with public funds would be shielded in secrecy, thus allowing the project to remain abandoned, leaving Deltans to suffer epileptic power supply and has failed to expose those culpable for the failure of the project and continues to hide investigative panel report.
On the spot Assessment of Project by Reporter
Our reporter arrived the project site which is by the Ethiope River at the Oghareki-Oghara end, for an on the spot assessment. The reporter observed that the project site gate was locked. The site had a perimeter fence, three uncompleted buildings a gantry and an access road constructed by Levant Construction Company. Looking at what the site it was obvious that what was on ground did not justify the huge amount expended in the project.
The project site devoid of human activities was deserted and over taken by weeds, with 1.2 meters tall grass covering the entire landscape. The current surroundings present a conducive habitat for dangerous reptiles to breed. Also the 1800 by 600 hectares of land acquired has lies waste. Land that farmers from the host community have lost.
Our correspondent also visited Ibru’s warehouse where the two gas turbines and other equipment for the project are said to have been kept. The facility was also locked but a community source Mr. Isreal Omoriake told this reporter that the turbines, among other machines purchased are still intact laying fallow. Apart from one of the turbines that was ravaged by Hamattan fire in January 2015, but it was unclear whether the insurance Brokers that insured the equipment had indemnified Delta State Government over the fire outbreak.
The community source stated that the community currently suffers epileptic power supply, a development that has slowed down business activities in the community. He hinted that part of Edjemuoyavwe community, the host community to Delta State University Teaching Hospital, Oghara have been in total darkness for over three years now, a development that made staffers of the institution to relocate to as far to Edo State and other neighboring cities.
Strolling through the environs of the IPP project, one cannot help but wonder why Delta State decided to abandon the project after purchasing the two gas turbines which had been imported laying fallow in Ibru warehouse. Some sections of the project site can only be described as “mini-forests” with 1.2 metre tall grass coating the entire landscape.
The current surroundings present a conducive habitat for dangerous reptiles to breed, posing a significant risk to vandalizing the equipment in the sites, as the 1800 by 600 hectares has become useless for the farmers and the host community who hitherto farm in the said land.
How Delta State Government deprived Deltans of stable power
Investigation carried out revealed that Delta State Government was subtle from inception and for not being thorough with planning considering the huge resources that would go into the IPP project, after spending about N20Billion, Delta State Government under Emmanuel Uduaghan was trapped financially where it resorted to scouting for Private partners but till date no one had discussed such venture, neither has David Edevbe investigative committee proffer solution to ensure the multi-billion is completed or given out to private investors, one would be tempted to say that It was a calculated attempt to siphon tax payers money into private pockets through the project and to further compound the situation, Gov. Okowa administration had not probe neither persecute either the contractor or past administration of any wrongdoings, yet the project remain abandoned.
Instead of focusing on how to revive the multi-billion naira moribund IPP project situated in Oghara; Delta State Government under Gov. Ifeanyi Okowa in 2020 initiated and commissioned a Mini power project, situated along NTA road, Asaba with the view to generate power to all Government establishments within the State capital, providing an enabling environment for it to thrive, leaving common Deltans to wallow in total darkness.
No budget for the IPP access road for now-Works CommissionerAccess road to the project site
As at when this reporter visited the Project site for ‘on the spot assessment’ observed that the access road to the IPP project site awarded to Lervant Construction Company had not been completed, This reporter visited the then State commissioner for Works, Mr. James Augoye in his office to ascertain if his ministry was ready to complete the internal roads and access road linking the project site awarded to Lervant Construction Company, the Commissioner explained that they was a lot of challenges facing the project and since the State Government had not resolved the challenges with those concern, it would be foolish for his ministry to make provision for the completion of the IPP access road.
“The Challenges facing the State IPP project is too numerous, it would be foolish for us to invest another huge sum to complete the access road, for now I must tell you straight that we have no budget for that road.”
The Ministry Permanent Secretary, Engr. Fred Edafioghor also corroborated the commissioner assertion that the road linking the IPP was constructed by Lervant but the second asphalt laying has not been done, stressed that he was aware Lervant has been making proposal to the ministry to complete the second phase of the road project, noted that since that was one the projects inherited by this administration, efforts has not been directed to it.
Get clearance from Delta State Government before we can speak to you-DAVNOTCH
This reporter visited the office of the mother company, Davnotch Engineering Company Asaba branch situated at Illah road, observed the storey building office has been deserted, a phone number gotten from the company website where this reporter spoke with the company representative, noted that Delta State Government warned them never to speak on the project, he advised the reporter to get a clearance letter from Delta State Government through Ministry of Power and Energy who gave them a contract before they can speak.
Coordinator of a civil society organization, Young Nigerians Right, Mr. Victor Ojie has tongue lashed Davnotch Company for seeking clearance from Delta State Government before they speak on a project they executed poorly.
According to him, Davnotch has performed below the ethnical standard of engineering company executing projects, wondering how Company would seek permission from Government who gave them contract before they can speak where the integrity of their company is astake.
He however called for proper investigation of Davnotch Company with the view to ascertain why they demobilized from site on a project awarded them after payment of 60% of total sum of award contract and bring whoever is found wanting to book.
Davnotch Engineering Company believed to be founded by the former Speaker, Delta State House of Assembly, Victor Ochei, but he had since told newsmen that he had since left the company.
Findings revealed that the consortium who submitted a report that estimate the power demand for Delta State between 2009 and 2010 to be within the range of 440MW and 570MW; it therefore means that Delta State Government under Gov. Uduaghan was subtle to Deltans, wondering how 150MW would be commensurate with 440MW as envisaged by the group of consortium. There seems to be irrational love and irrational hate jostling together here.
Okowa CPS lied on IPP project completion:
Contacted last year to ascertain Gov. Okowa readiness to complete the abandoned multi-billion naira Independent Power Project before the end of his administration, the Governor’s Chief Press Secretary, Mr. Olisa Ifeajika who spoke with this reporter expressed Gov. Okowa readiness to complete the IPP project before the end of his administration, hinted that the project was never abandoned.
“The IPP project was never abandoned by His Excellency, I know it’s one of the projects inherited by this administration, I can tell you no inherited project will be abandoned, we are not known to abandoning projects”
In a twist, Gov. Okowa had during a town hall meeting in 2019 at James Ibori Civic Center, Oghara-Ethiope west local government of Delta State that Delta State Government can no longer continue with the multi-billion IPP project as the project would still gulp over N200billion a statement which was described by many as attempt by Gov. Okowa to abandon the project completely depriving Deltans of Stable power supply.
This report was supported by MarArthur foundation, Sunreporters and International Center for Investigative Reporting, ICIR.