Legislature
NDPHC lacks competence, capacity for gas supply contracts for Nigeria, say senators
There may be no end in sight for the lingering hiccups in the power sector as the Niger Delta Power Holding Company (NDPHC), one of the major players in the sector has been written off by the Senate Committee on Power for lacking capacity and competence to enter into gas supply contracts on behalf of the country.
Recently the Senate Committee on Power launched investigation into the make up gas (MUG) titled “Need to investigate the controversial Make Up Gas (MUG) processing deal involving the Federal Ministry of Finance, Niger Delta Power Holding Company (NDPHC), Calabar Generation Company Limited and ACUGAS Limited”.
At the investigation, the Senate committee members expressed displeasure at the way and manner the Niger Delta Power Holding Company (NDPHC) handled gas supply contracts that left huge liabilities for the nation.
During the proceeding, the Managing Director, Niger Delta Power Holding Company (NDPHC), Chiedu Ugbo said NDPHC has been taking gas from ACU Gas, which they used to generate power from the Calabar Power Plant to the national grid
According to him, in terms of payment payment, there are two issues: payment for what was consumed and payment for Make Up Gas (MUG), which he called “undisputed and disputed”.
He said they were not able to pay for the gas that was consumed because EMBET receipt from the market doesn’t cover what they have generated and NDPHC passed their invoices to the guarantor, which is the Federal Ministry of Finance (FMF).
He said it was clear “we generated this amount of energy using this amount of gas; however, Nigerian Bulk Electricity Trading (NBET) Plc has not been able to pay. So, you are the guarantor, pay and whenever NBET pays we will pay you back”. That is payment for what was actually consumed.
Taking this year, for example, he said “in January, we got 9.43% of our invoice paid. That invoice has about 65% gas cost. In that situation, we passed it to the FMF as a guarantor to pay because we have utilized the gas to generate the energy and sold to EMBET, but due to liquidity issues NBET is unable to pay, same with February and March”.
On MUG, Mr. Ugbo said because of the dispute on it between NDPHC and ACUGAS, FMF came up with the initiative that all the electricity generation companies’ MUG be taken and “repurposed”.
At this point, having listened to him, the Senate couldn’t hide its disenchantment with NDPHC and the vice chairman of the committee, Senator Lola Ashiru (Kwara South) said one thing they have discovered was that they were not sure if NDPHC has the capacity to purchase gas for your Generation Companies (GenCos).
“If the Federal Ministry of Finance is not there in the background, there is no way you could perform. There are so many things you are not sure of. You are not sure how you are going to off load the energy you are generating. You are not even sure the TCN will transmit neither are you sure there will be payment for whatever you are selling out.
“Looking at all these things, there is issue of capacity to enter into contract. When there is no capacity to enter into contract, what it means is that the existence of your business is in doubt.
The only way we can get out of this is a total renegotiation and when you are doing total renegotiation, you must be sure of your own capacity to do business. If you are not sure of it, we will just be going round and going deeper into debt. I advised that you should do a clear study of your own position.
“The world is going private. We were with Dangote at the weekend. It is a private enterprise and we were so amazed. He has thrown in almost $22bn into his business and he is very sure that he will succeed.
Now we are talking of our own GenCos and every day of our lives we are going deeper and deeper into debts. I don’t know what we should do at this stage, but I think it is important for you to carefully to carefully restructure your business, to carefully restructure yourself and repackage all these indices into a new contract renegotiation.
Speaking further, another senator said “the matter has become “a naughty issue”, adding that he was getting confused.
Chairman of the investigative committee, Senator Enyinayya Abaribe asked the MD, NDPHC if the have the right to go into contract negotiation that involves the Federal Ministry of Finance and therefore the country without the involvement of the Federal Ministry of Justice. He said the committee has a letter from the Attorney General of the Federation that the Federal Ministry of Justice was not involved in any MUG agreement.
“It is very surprising for us that you commit the country to this amount of money without the involvement of the Ministry of Justice”, Abaribe said.
However, the MD, NDPHC said this agreement was signed with take or pay provision in 2011, adding that at that time nobody anticipated the liquidity problem in the sector. The Attorney General, when it went to them for the gas supply agreement, reviewed it, took it over. Before we signed the PRG, the Attorney General’s office cleared it for everybody, for Federal Ministry of Finance, for us, i.e for gas supply agreement as at 2016, 2017; the renegotiated one.
Mr. Ugbo said the MUG was purely a Federal Ministry of Finance affair and NDPHC was only informed about it.
Dahiru Moyi, Special Assistant to the Minister of Finance and Coordinating Minister of the Economy, while answering a question from the senators on the outstanding volume of the MUG said “there are many lapses as I said. If we start to go deep into this things we will never end. So, the Ministry of Finance, to say at least, let’s put aside all things and find solution.
He said the outstanding MUG as at December 2022 is about 26 billion cubic of gas (bcf). That will bring $300 million to the Ministry of Finance, if it is Liquefied and sold as LNG. That was the idea and it’s growing by the day.
“We believe in 13 years, the Ministry of Finance will stop this hemorrhage, at least be able to get something to pay and support other projects. We cannot use money appropriated for a project to do this. It will cause a lot of disruption in the whole fiscal environment.
According to Mr. Moyi the MUG today may be 30 or 40 bcf, only ACU Gas may give us exact figure, adding that “the problem is that NDPHC contests and disputes everything unilaterally as you heard ‘force majeure’ without getting Ministry of Justice involved.
But Mr. Ugbo said they have done a lot of things. “We said we could use the gas in Alaoji and Calabar. As we speak, NDPHC have finished the pipeline from ACU Gas to Alaoji.
However, this seemed not to impress the committee members who felt that the country’s scarce resources were not being properly utilized to solve the problem
Former President of the Senate, Ahmad Lawan has extended his condolences to Governor Babagana Zulum and the people of Borno State following the recent devastating floods that have ravaged parts of the state.
A statement by his media adviser Dr. Ezrel Tabiowo quoted Lawan to have expressed deep sadness over the loss of lives and property caused by the disaster, which has left many residents displaced and without livelihoods.
He urged swift intervention from the National Emergency Management Agency (NEMA) and other relevant agencies to provide relief materials and assistance to the affected communities.
Lawan, who represents Yobe North Senatorial District, commended Governor Zulum’s efforts in responding to the flood disaster and pledged his support for the affected communities.
The former Senate President’s statement conveyed his solidarity with the people of Borno State during this challenging time.
The statement reads, “I am deeply saddened by the news of the severe flooding in Borno State, which has caused untold hardship and suffering to our compatriots. My heart goes out to those who have lost loved ones and property in this disaster.
“I urge the National Emergency Management Agency (NEMA) and other relevant agencies to swiftly provide relief materials and assistance to the affected communities.“
“I want to commend Governor Babagana Zulum for his proactive efforts in evacuating residents from the flooded areas and providing temporary shelters for them. His leadership has been instrumental in minimizing the impact of the disaster.“
He commended the federal government for providing additional support to Borno State to enable it to cope with the aftermath of the flood.
Lawan also urged the Borno State government to work with relevant agencies to find lasting solutions to the flooding in the state.
“While we commiserate with the victims of the flood, we must also work towards finding lasting solutions to this perennial problem. The Borno State government, in collaboration with relevant agencies, should embark on a comprehensive flood control programme to mitigate future disasters,” he said.
Senator Lawan prayed for the repose of the souls of those who lost their lives in the flood and wished the injured a speedy recovery.
From Friday Idachaba, Lokoja
The Kogi State House of Assembly has reconvened after a lengthy recess, with Speaker Rt. Hon. Aliyu Umar Yusuf expressing gratitude and excitement over the Supreme Court’s affirmation of Governor Ahmed Usman Ododo’s victory in the November 11th governorship election.
In his welcome address to members, Speaker Yusuf commended the lawmakers for their solidarity and assured them of the ruling All Progressives Congress (APC)’s commitment to collaborative governance for the state’s betterment.
Yusuf stated, “The Supreme Court’s pronouncement has profound significance for all of us, both as members of this esteemed assembly and as a state. We attribute this triumph to the Almighty God.”
The Speaker emphasized the legislature’s unity across party lines, saying, “As lawmakers, we have collectively rejoiced at this outcome, demonstrating our commitment to working harmoniously for the state’s progress.”
The assembly pledged its support for the executive branch, ensuring a harmonious working relationship to drive development and progress in Kogi State.
***Applauds Numerous Achievements in 7 Months
By Friday Idachaba, Lokoja
The Kogi State House of Assembly has passed a Vote of Confidence on Governor Ahmed Usman Ododo, lauding his outstanding achievements over the past seven months.
The vote of confidence was passed during Tuesday’s plenary session following the adoption of a motion on Urgent Public Importance, moved by Hon. Akus Lawal (APC-Ankpa 1).
In his motion, Hon. Akus highlighted the governor’s significant accomplishments in fiscal discipline, financial management, agriculture, health, security, infrastructure development, and education.
The motion commended Governor Ododo’s efforts in reducing the state’s domestic debt from N121 billion to N38 billion, earning Kogi State a “B-” rating with a positive outlook from FITCH Ratings.
The governor’s initiatives in agriculture, such as designating 8,000 hectares of farmland, releasing N8 billion to farm clusters, and refurbishing 200 tractors, were also praised.
In health, the motion recognized the governor’s efforts in formalizing the Health Insurance Scheme, revitalizing over 70 primary health centers, and distributing essential consumables and hospital equipment.
The governor’s commitment to security, infrastructure development, and education was acknowledged as well, including the engagement of local hunters and vigilantes, the launch of a metropolitan quick response unit, and the construction of roads and model colleges.
The House of Assembly’s vote of confidence is a testament to Governor Ododo’s dedication to transforming Kogi State and improving the lives of its citizens.
Hon. Jibrin Abu (APC-Ajaokuta) seconded the motion, which was supported by other members. In their various submissions, they applauded the governor for his achievements despite the pressure from ongoing litigation.
In his ruling on the motion, Speaker of the House, Rt. Hon. Aliyu Umar Yusuf, noted that despite the pending litigation from the election, the governor had achieved a great deal within seven months. He highlighted Governor Ododo’s impact on fiscal discipline, financial management, debt reduction, improved Internally Generated Revenue (IGR), and advancements in the agricultural sector.
Speaker Yusuf also emphasized the tremendous support the health sector has received under Ododo’s administration, from private healthcare to tertiary health institutions. He noted significant improvements in security, infrastructure development across the three senatorial districts, continuity and support for education, as well as reforms and improvements in Kogi’s civil service at both the state and local government levels.
He concluded that the governor not only deserves a pass mark but also excellence, and that a Vote of Confidence to support and encourage him was indeed in order.
Speaker Yusuf then adopted the motion following overwhelming voice votes in favor of the motion.
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