Senate kicks against concession of Zungeru Power Plant

Lawmakers in the Senate oppose ongoing efforts to concession the Zungeru Hydroeletric Power Plant (ZHPP), mandate its Committee on Power to ascertain the implication of the proposed arrangement on government treasury and the Power Sector Recovery Programme
Ojochenemi Onje-James4 days ago7 min
Lawmakers in the Senate oppose ongoing efforts to concession the Zungeru Hydroeletric Power Plant (ZHPP), mandate its Committee on Power to ascertain the implication of the proposed arrangement on government treasury and the Power Sector Recovery Programme
Zungeru
Zungeru Hydroelectric Power Plant (ZHPP)

The Senate kicked against an ongoing bid to concession the Zungeru Hydroelectric Power Plant in Niger State, ordering a suspension of the process.

This came to the fore on Wednesday, as the Red Chamber considered a motion titled ‘Need for Senate intervention in the ongoing bid to concession the Zungeru Hydroeletric Power Plant in Niger State,’ during plenary.

The motion was sponsored by Senator Gabriel Suswam (PDP, Benue North-East) and co-sponsored by Senator Yahaya Abdullahi Abubakar (PDP, Kebbi North).

 

 

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In his presentation, Senator Abubakar noted that the Zungeru Hydroelectric Power Plant (ZHPP) located in Zungeru, Niger State is a 700MW-capacity electricity generating plant, a contract for which was originally awarded sometime in 2013 in the sum of $13 billion. The Kebbi lawmaker also noted that it is considered the second largest hydroelectric plant in Nigeria after the Kainji Hydropower Station, also in Niger State,

He further noted that apart from the huge loan secured by the Federal Government from the Exim Bank of China to fund the construction of the ZHPP, the National Assembly has, since the commencement of construction work on the plant, approved billions of Naira annually through its budgetary appropriation powers towards the completion of the plant.

“Over N43billion was allocated to the ZHPP under the 2022 Appropriation Act, and the executive in the 2023 Budget is proposing another N76.5 billion,” he noted.

 

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The lawmaker observed that the ZHPP was expected to have been completed within 60 months from the date of execution of the contract in 2013, but several factors have threatened the speedy completion of the project;

“The ZHPP is expected upon completion to inject about 2.64 KW/h annually to the national grid apart from other benefits such as water supply schemes, dry season farming and irrigation, flood control, aqua-tourism opportunities and other economic activities that would emerge within and around the immediate communities where the project is sited.

The National Council on Privatisation (NCP) and its secretariat, the Bureau of Public Enterprises (BPE), in conjunction with the Federal Ministry of Power (FmMoP) had in compliance with the provisions of the Infrastructure Concession Regulatory Commission (ICRC), invited interested investors to participate in a two-stage process that would lead to the selection of a concessionaire that would operate, maintain and manage the ZHPP for a Minimum of Thirty (30) years”, Abdullahi observed.

Senator Abdullahi recalled that the Invitation for Submission of Request for Qualification (RFQ) was published in the BusinessDay Newspaper on Thursday, 27 October 2022, and several mediums, including a Road Show to further create awareness of the exercise.

He noted that it is within the statutory powers of the NCP and its Secretariat, the BPE, to implement and superintend over the privatisation of Federal Government assets. The lawmaker, however, stressed that the strategic importance of the ZHPP in ameliorating Nigeria’s current power challenges calls for the Senate’s immediate intervention in exercising its constitutional oversight responsibility.

This, he notes, is to ascertain the implication of the proposed concession on government treasury and the Power Sector Recovery Programme in particular.

 

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“Senate’s intervention at this point is further underscored by the need to ensure accountability for the huge annual budgetary allocations made to the project over the years.

The issue of managing unsettled external loans tied to the project, the fate of unsettled host communities where the project is sited and the need to generally establish whether the proposed concession of the ZHPP is an exercise that would ensure that government get the deserved value for funds expended on this project as well as ensure that community-related conflicts do not arise after take over by the prospective consignee.

The Federal Government had, through the NCP and its Secretariat, the BPE, implemented an ambitious programme for the privatisation of government-owned power assets, but several years since the completion of the privatisation exercise in 2013, the performance of the private new owners still remains a subject of controversy and recrimination in public circles hence the need for government to be wary and take precautions in the proposed concession of the ZHPP,”  he noted.

 

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Senators Jibrin Barau (APC, Kano North), Yusuf Abubakar Yusuf (APC, Taraba Central) and Sani Musa (APC, Niger East) all spoke in favour of the motion, stating that an uncompleted project cannot be concessioned.

The Senate accordingly resolved to mandate the Committee on Power to investigate the circumstances and conditions under which the 700MW Zungeru Hydroelectric Power Plant is being concessioned particularly as it relates to the utilisation of annual budgetary allocations made to the project and completion level of the project.

Others include the management of external loans from the Chinese Exim Bank, which are tied to the project, the fate of unsettled host communities where the project is sited, the adequacy or otherwise of selection criteria for the concessionaire. The Committee is also expected to generally establish whether the proposed concession of the ZHPP is an exercise that would ensure that governments get the deserved value for funds expended on this project and report back to the Senate within two weeks.

The Senate also urged the National Council on Privatisation and its Secretariat, the Bureau of Public Enterprises (BPE), and other MDAs concerned to indefinitely suspend the proposed concession of the 700MW Zungeru Hydroelectric Power Plant in Niger State. It noted that this is pending the conclusion of the investigation by the Senate Committee on Power and the consequent adoption of the decision of the Senate based on the findings and recommendations of the Committee.

Ojochenemi Onje-James

Ojochenemi Onje-James is a research writer and journalist with years of proven footprints in areas of crime and politics. She has a M.Sc in International Relations and Strategic Studies as well as a B.Sc in Mass Communication.

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