Gas sector should be opened for private investment-Barth Nnaji

Barth Nnaji

In this interview with Oluwagbenga Bankole and some selected journalist in Lagos at the recently held West Africa Power 2015 Summit, Former Minister of Power, Professor Barth Nnaji speaks on how Transmission Company of Nigeria (TCN) should operate, his priority for the administration of  President Buhari government, CBN N6billion fund to gas companies and other important issues. Excerpt

What is your priority for the administration of  President Buhari in the Power sector?

His government must have an effective way of ensuring that the power that we have now can be sustained and continue to grow.  It means that key issue of generation and the fueling of the power must be assured and evacuation of the power must be regular.
In order to achieve this, it requires  the gathering of stakeholders absolutely thinking about the nation by the government. President Buhari must ensure that we have people who will work together to deliver.

Recently Central Bank of Nigeria (CBN) released about N6 billion to gas producing companies in Nigeria. What is your opinion about this considering the fact that regular gas supply has been the major challenge in delivering power to Nigerians?   

Regular gas supply is so critical because gas and its infrastructure must be well developed and this must be done in order to enjoy uninterrupted power supply. In my presentation, I said in few years to come 80 per cent of  power will come from natural gas and in order to achieve this we must continue to grow natural gas. I am not sure if whatever is released will be enough to go as far as we want in the interim.

Remember, we have right now domestic gas obligation from the producer of 4.9 billion standard cubic feet. However,  only about 1.9 bscf/d is being delivered.  We need to meet the domestic gas obligation. To meet the install capacity of power stations, we need up to 7 bscf/d and  four times of that amount in the next ten years. We need a lot of investment but whatever little we can get should bring some progress and the sector needs to be opened up for private investment in gas.

Coming to Geometrics Federal Government Eastern Distribution Network, how far have you been able to make breakthrough in the distribution of   power  being generated?

The question has to do with the fact that in 2005, Geometrics Power reached an agreement with the Federal Government. However, successive administration of the Federal Government  breached the agreement which is not supposed to be. This government that is in place now is working to ensure that they resolve the issue because an agreement is very important. People invest in agreement; private companies should be protected when they make  investment especially in the case of Geometrics power that invested more than N100 billion and that project is sitting completed and waiting for decision to be made on an agreement that is already there. It is in process and we hope something will be done very soon.

Can you confirm the reopening of discussion with you by the Buhari administration?

The current administration just came into existence and we know that their body language shows that they will resolve it. The transition committee has information and I believe they will resolve it as quickly as possible.

Before you left the Ministry of Power the generation was above 4000 megawatt, but since you left it has started going down, today we are back to square one. What do you think actually went wrong?  

We are happy that during my time we reached the peak in power generation but it is not a proud thing to say that we just reached the peak. What we should have is a situation whereby  Nigerians could feel the presence of electricity in the country and some degree of predictability. What should have happen after we left the ministry is continue growth has expected. To have power stability, it requires a lot of discipline of the various organs of the production system. It requires  right attitude by the Distribution companies  and  improvement  when needed and schedule. It also requires that repairs are immediately made when there is any kind of issue and adequate maintenance of the  power plants among others.

Your successors said that major problem we have in the power sector is vandalism. Do you agree with that?

There was always vandalism when I was the Minister of Power but I believe it can be checked through concerted effort. When I was there it was not only vandalism, we have other issues to manage.

Can you tell us how much have been lost due to lack of adequate power supply?

In a country of 180 million people like Nigeria, it is difficult to quantify the amount that has been lost so far beacuse the economy is largely powered by private power supply. You have more power coming from private source (that is individual self-generation) than what we are able to produce yet and this has to change so that utility companies can be able to deliver more power to the population. It also reduces cost of production. Electricity cost accounts for nearly 40 per cent of the cost of producing a product and it cannot compete with other country’s product.

How do you see the introduction of the Embedded Power scheme into the whole power configuration?     

Embedded power is excellent because you need to have clusters of reliable power supply so that you power the economies of industrial cities. When you talk about  Embedded Power, Grid power is not a constraint.

Aliko Dangote said he will spend billions of dollars on the gas pipeline running from Delta to Lagos state which he said will quadruple the domestic supply of gas. How realistic do you think the project in terms of the good it can do for the power sector? 

Aliko Dangote usually delivers on his promise, he can’t come and make an empty promise, I believe that he meant what he says and he has resources to deliver. I believe it will be very helpful. This thing will take sometime, but I believe people who have capacity to do thing that will improve the country should be encouraged. Where we usually have problem is a situation where government is the one holding everything and it refuses to let go. If Dangote can come in and do something like that, others should come in and do similar thing so that all of us can come together to develop the country in gas and power supply.

      

What do you think should be done to TCN now that contract with Manitoba Hydro International is expiring next month?

TCN should never go back to government management. Government ownership Yes, government management No, it is not a good idea. Private sector with proper management may be considered, but concessioning of segment of TCN will be better. I believe that the private sector management was never allowed to work and it is part of the problem. The people who were brought to manage TCN endured interferences from government appointed officers. What should happen is that perhaps a short time extension can happen or a concession but not going back to government management.