Deceit, incompetence, corruption prevent $530m Nigeria's Aba power project

President Jonathan

The story of how Geometric Power has been prevented from lighting up Aba contains the usual suspects of vested interests, crony capitalists, an inept bureaucracy putting up barriers to doing business, graft, incompetence and murky dealings that can be traced to the very top of Nigeria’s political class.
The successful plot to stop Geometric has been enabled by a hapless president, a vice president captured by vested interests, a defanged Bureau of Public Enterprises (BPE), a National Electricity Regulatory Commission (NERC) where conflicting interests have led to deceit, and a private sector entity – Interstate Electrics, owners of Enugu Disco – whose intent is essentially to kill Geometric.
It is a tale with few heroes but lots of villains, who have conspired to keep Eastern Nigeria’s industrial hub of Aba, a city of 2 million people, perpetually in the dark.
Knowledgeable sources say the operation of a 140-megawatts power plant primed to deliver power to Aba, a shoe and garment hub of Africa, is being frustrated by PDP kingpin Emeka Offor, the chairman of Chrome Group and promoter of Interstate Electrics Limited, who is also a close personal friend of Namadi Sambo, Nigeria’s vice president.
The sheer misanthropy that accompanies Nigeria’s version of barefaced political brigandage and patronage has left households and industries in entrepreneurial Aba, the “Japan of Africa”, trapped under increasing rolling blackouts. Households in the South East that experience blackouts several times a month and every day are above the national average, according to the National Bureau of Statistics (NBS).

Vice President Sambo

In 2000, the combined turnover of the shoe and garment industry of Aba, the third-largest commercial city in Nigeria, was $200 million.
Sources tell BusinessDay that Offor has Pius Anyim, secretary to the government of the federation, in his pocket, while Sam Amadi, chairman/CEO of NERC, is beholden to Anyim.
Benjamin Dikki, director-general of the BPE, and Mohammed Bello Adoke, attorney-general, are also marionettes of the vice president.
Together, they have managed to pull the wool over the eyes of President Goodluck Jonathan, keeping him out of the loop with spurious procedural and legal issues. Their delay tactics have slowed down the take-off of a project financed by a consortium of American investors, local and international banks, as well as the International Finance Corporation (IFC), the World Bank’s private-sector arm.
In 2001, after the successful execution of the 22 megawatts (MW) emergency power station in Abuja to serve a dedicated distribution network within the Federal Capital Territory, Bart Nnaji, founder of Geometric, was inspired to initiate the Aba Integrated Power Project, a distribution project with an embedded generation company.
In 2004, Geometric Power Limited signed a memorandum of understanding with the Federal Government to build a power plant in Aba, and a year later, in April 2005, Geometric signed the Aba concession agreement, also with the Federal Government, which gave it the right to distribute power to Aba.
The government, NEPA and APL executed a lease agreement on April 28, 2005 for the distribution of power to the ring-fenced residential and commercial consumers at Aba.
By the terms of the agreement, NEPA assigned its right to distribute electric power in the ring-fenced island of Owerrinta, Osisioma, Ogbor Hill, Factory Road, and Port Harcourt Road in Aba, and also leased its distribution facilities within the contract area.
With over $500 million investment in electricity infrastructure, Geometric Power Limited, if allowed to proceed, is guaranteeing 95 percent uninterrupted power supply in Aba, the commercial hub of Abia State, and its environs.
So far, the company has completed a power plant with a capacity to produce about 141MW of electricity in its first phase, built new distribution lines, four new sub-stations and rehabilitated another three previously used by the former PHCN. Each plant is to produce 47MW of power, supported by a 60MVA per transformer.
Our sources tell us that Geometric may never turn on the lights in the Aba and Ariaria business districts if the politically-influential Emeka Offor gets away with his brazen attempt to profit from keeping 2 million residents of Aba in total darkness.
“With the help of the vice president’s flunkies, a game of Russian roulette is being played,” said a source in Abuja.
In suit number FHC/ABJ/CS/106/2013, filed at a federal high court in Abuja, Geometric sought to restrain BPE from listing the two business units among government-owned companies slated for privatisation, as selling or privatising the entire Enugu Disco contravenes the existing agreements between the Federal Government and Aba Power Limited and Geometric.
Earlier in a newspaper advertisement, Aba Power Limited warned the public to steer clear of Enugu Disco on the basis of a lease agreement between the Federal Government, Transmission Company of Nigeria (TCN), Enugu Disco, Aba Power Limited and Geometric Power Limited.
In another suit number FHC/ABJ/CS/106/2013, Interstate Electrics Limited sought to be joined in the case instituted by Aba Power Limited and Geometric Power Aba Limited against the BPE.
In the understanding that an out-of-court settlement would be the best option for settling the dispute, the National Council on Privatisation (NCP) set up a peace committee.
In its report, obtained by BusinessDay, the NCP committee admitted that “BPE indicated that Aba ring-fence was encumbered, yet it included Aba ring-fence in its bid and that Aba ring-fenced area belongs entirely to Aba Power Ltd with its generating power responsibilities”.
A report by NERC, after a visit to the Geometric Power infrastructure in Aba, submitted that “it will be a disservice to the country in general and the company (GPAL ad APL) in particular, after investing such a huge amount of money on power infrastructure, to be denied the terms of the tripartite agreement. A disregard of the agreement will cast a bad light on the Federal Government’s privatisation process and send a wrong signal to other prospective investors in the power sector”.
In February 2014, a team from the Federal Ministry of Power, led by the permanent secretary, after visiting Aba, submitted that “the sanctity of the lease agreement of 2004 and the supplementary agreement of 2006 between the Federal Government and Geometric Power be respected and maintained”.
Earlier last week, a meeting at the instance of President Jonathan in Abuja, which had all the dramatis personae, including the vice president, minister of finance, minister of power, NERC chairman, DG BPP and BPE, special adviser to the president on monitoring and evaluation, permanent secretary of the Federal Ministry of Power, and the attorney-general of the federation, met over the Geometric-Interstate dispute.
Sources say the vice president ensured that the meeting failed to make any appreciable progress, even though most of those present (except DG BPE and the attorney-general, both lackeys of the VP) saw the reason for the Federal Government to correct the “obvious administrative error created during the privatisation exercise, through necessary administrative procedures to guarantee equity and fairness”

Culled from BusinessDay Nigeria