FG needs $5.73bn to complete Mambilla power plant

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FG needs $5.73bn to complete Mambilla power plant

Federal Government on Thursday disclosed that it requires a total sum of $5.73 billion to complete Mambilla Power Project.

Minister of Power, Mr Saleh Mamman disclosed this during the 2020 budget defence held at the instance of House Committee on Power, Hon. Magaji Dau.

He explained that China under the Memorandum of Understanding signed with Nigeria is to provide 85% of the fund while Nigeria provides the 15% counterpart funding.

In his intervention, Hon. Dau requested for the current status on the Mambilla Power Project, just as he queried the proposal of a paltry sum of N2 billion in the 2020 budget estimates.

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While responding, Permanent Secretary, Federal Ministry of Power, Louis Edozien who earlier affirmed that there was no construction on the site, said: “I cannot contradict my minister. When you say there is nothing on the ground, it is an act that there is no construction ongoing on ground at the site. That is true.

“But with the project of this size and this importance, a lot of things happened under the surface before you start seeing construction on the ground.

“The first and most important step that must be taken is the studies that underpin the project, that lead to a functional and effective contract. All that was done over 40 years, culminating in an executed contract in November 2017 by the President Muhammadu Buhari’s administration. So, the EPC contract for the project is done.

“The next thing that has to happen is that this project, the total cost – all in, is estimated to be $5.73 billion. When I say ‘estimated,’ the construction cost is fixed in the EPC contract but there are many other costs that make it up; enumeration, compensation and so many others that not fully known at this time. They were all embedded in the costing of the project.

“President Muhammadu Buhari and President Xi (Jinping) came to an understanding in 2018 that the government of China would finance 85 percent of that project under a China-EXIM Bank loan and the Nigerian government would finance 15 percent. The negotiation of the China-EXIM funding is ongoing under the leadership of the Ministry of Finance,” Mr Edozien told the lawmakers.

He explained that in the 2020 budget proposal, the ministry was given under the 2020-2022 Medium Term Expenditure Framework an envelope “ceiling of N9.362 billion and we have done our best to allocate that very limited figure where it can have a maximal impact. Out of that figure, N2 billion has been earmarked for the Mambilla Power Project.”

The lawmakers who expressed concerns over the failure of previous administrations to complete the project, mandated the Minister to set up a Special Purpose in order to deliver the hydropower project in record time.

They also expressed dissatisfaction over billions of naira sunk into the power sector without substantial results.

The lawmakers also frowned at the N2.45 billion proposed in two separate budgets for the project in 2020.

They noted that N280 million was earmarked for the project in 2019 budget yet the project is still at survey level.

While querying the award of the contract to a Chinese firm, the lawmaker argued that the decision negates the Nigerian Content policy and extant Act of Parliament.

FG needs $5.73bn to complete Mambilla power plant
Tribune Online