The Minister of Power, Adebayo Adelabu has explained why there is no provision in the 2024 budget for the Mambilla Hydro-Power plant project at Gembu in Taraba State.
The $5.8 billion project has the potential to generate over 3,050 Megawatt (MW) of electricity.
Daily Trust had reported that there was no allocation for the lingering power project in the 2024 budget.
Defending the exclusion, Adelabu said the project is a subject of arbitration, which has prevented the federal government from getting it off the ground.
The minister spoke on Monday at the 2024 budget defence session organised by the Senate and House of Representatives Joint Committee on Power.
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Sunrise Power and Transmission Company Limited (SPTCL) had on October 10, 2017, dragged the Nigerian government to the International Court of Arbitration administered by the International Chamber of Commerce (ICC), Paris, France for “breach of contract” about a 2003 agreement to construct the 3,050MW plant in Mambilla, Taraba state, on a “build, operate and transfer” basis for $6 billion.
The federal government insisted that the contract award was irregular and did not pass through due process.
But Sunrise headed to court when a bid process for the civil works was announced by the government in 2007 and a series of litigation stalled the project.
Adelabu said the zero allocation to the project was deliberate since nothing could be achieved until the arbitration was settled.
He said: “For Mambilla, there is no provision for it in 2024. It isn’t a mistake. It is deliberate. It is under international arbitration. Until it is resolved, we can’t do anything about it.”
The minister however said the Zungeru Hydro Power Project in Niger State was 99.8% completed.
“It is almost completed and we intend to start operation this year and commence evacuation to the national grid. Immediately concessionary fees are paid; we will start full operation,” he said
The minister told the lawmakers that the biggest problem in the power sector is not generation, but distribution, noting that substantial generated power is lost in the process of distribution.
He attributed the problem to poor infrastructure, saying the facilities of the existing power distribution companies were obsolete and needed to be upgraded.
“In the process of transmission to distribution, we lose power because of the distance of travel. You lose close to 40% when you move from the area of transmission to distribution.
“So, we need to make an enormous investment in the distribution chain. What we are trying to do going forward is to expand our transmission facilities,” the minister said.
Adelabu also reiterated his call for the unbundling of the distribution companies, saying the states must be involved in power distribution.
“The DISCOS must be closely monitored by the states. I propose that they must be unbundled.
“Even when it comes to transmission lines, the states are well placed to secure the right of way for us,” he added.