Governor Okowa Sells Delta Govt Equity Shares In IPP/Delta Electric Power Limited

Delta State Governor, Dr Ifeanyi Okowa has commenced the sale of Delta state Government equity shares in Independent Power Plant (IPP) in Oghara, Ethiope West Local Government Area of the state, BigPen Online can report.

It was learnt that Governor Okowa has authorized Access Bank which won the bidding for appointment of Financial Advisor to assist with the sale of the State Government interest in Delta Electric Power Limited to go ahead and complete the sale.

DEPL is a public limited company registered for the purpose of driving the execution of the multi million naira project which contract was awarded in 2009 and was to be completed in 2011.

For the information of the public, an IPP typically consists of four components that work in sync, namely; – Generation -Transmission – Gas supply infrastructure – Sub-station but only the generation aspect of the IPP was awarded by the previous administration and clearly this aspect cannot work in isolation of the other components.

The contract for the generation was awarded on June 23, 2009, at a total cost of $125 million or N21.75b using the prevailing exchange rate of the naira to the dollar at the time.

Owing to some modifications in the scope of work, the contract sum was upwardly reviewed to N23.2b on May 17, 2011, and the contractor has received a total sum of N19.8b as payment for work done.

The project was originally scheduled for completion in two years.

Below is a chronological description of the work present status and completion remarks on the project:

1. Lead equipment procurement viz Rolls Royce Trent Turbine 2 x 64 MVA, Brush Generator 2 x 75MVA and all auxiliary equipment and parts necessary for complete installation The equipment are presently warehoused in Oghara by the contractor awaiting installation 90% Part of the ancillary items burnt and requires replacement

2. Ring roads and drainage Ring roads completed while work on drainage still pending 87% Incomplete

3.  Peripheral fence Completed and site secured with two exit gates specified in contract 100% Completed

4. Auxiliary station buildings, viz warehouse, control room, admin block and gate house Construction in progress 68% Incomplete

5. 11/132KV generation sub-station Civil works in progress 70% Incomplete

6. Turbine generator plants Completed as per specification 100% Completed

7. 2nos 60/80MVA transformer and station auxiliary transformers Outstanding. Not yet purchased by the contractor 0% Not delivered to site

8. 11kv Control equipment Outstanding. Not yet purchased by the contractor 0% Not delivered to site

Accordingly, after a detailed and careful review of the IPP, it was determined that the DTSG could not continue to fund the project, which encompasses the completion of the already commenced construction and installation of the generation plant, and the yet to be awarded Transmission, Gas Supply Infrastructure and Sub-station segments.

By 2011 prices, they were all estimated to cost N37.8b. With today’s exchange rate of the naira to dollar at N360, the project is expected to cost astronomically higher.

In view of the foregoing, the Okowa administration decided that it was in the best interest of the State to sell its equity in Delta Electric Power Limited to a strategic private investor who would then complete the project.

In line with the Public Procurement Act, DTSG advertised for Expression of Interest for the appointment of a Financial Advisor to assist with the sale of DTSG’s interest in DEPL.

The advertisements were published in Thisday of Monday, April 3, 2017, Vanguard and The Pointer of Tuesday, April 4, 2017, and had a deadline for submission and opening of bids on April 21 and 22 respectively.

At the end of the process, which was open, fair and transparent, Access Bank was selected and has been formally engaged by the Government to undertake the sale. The bank is expected to complete the sale of DTSG interest in DEPL by the end of July 2018.

It is clear from the foregoing that there is no way the current administration can be held culpable for the failure of the IPP to take off.

The awarded generation aspect of the project was not only uncompleted, the other vital components were curiously unattended to in the six years that the project was on-going before Governor Okowa came on board.

That notwithstanding, the Governor has worked hard to see that the State gets the maximum benefit of the IPP by engaging the services of a reputable Financial Advisor to help the Government recover its money by selling its equity in DEPL to a strategic private investor with the capacity to complete the project.

The aforementioned information on the sale of the state interest in the project is coming on the heels of allegations by Delta state chapter of All Progressive Congress (APC), which had accused Governor Ifeanyi Okowa of “sabotaging” the take-off of the Independent Power Project.

The Peoples Democratic Party (PDP) in Delta state issued the statement to counter the APC claims, as signed by Ifeanyi Michael Osuoza, State Publicity Secretary, PDP, Delta State and seen by BigPen Online. The party queried why APC should hold Okowa’s administration liable for a project, which contract was awarded in 2009 and was to be completed in 2011?

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