Reps tackle TCN over breach of $1.848bn Azura power purchase agreement

Members of the House of Representatives on Monday expressed displeasure over the breach of contract agreement signed by officials of Nigerian Bulk Electricity Trading (NBET) Azura power purchase agreement for which the contractor is paid the sum of $33 million monthly over the past 56 months, totalling $1.848 billion for the supply of 450MW.

The lawmakers expressed the concern during the ongoing investigative hearing into the alleged breaches of agreement and perennial power failure in the sector held at the instance of the House Committee on Finance, chaired by Hon. Abiodun James Faleke.

While addressing some of the questions from the lawmakers, TCN’s Executive Director for Transmission Service Provider, Mr. Victor Adewumi, affirmed that there was a take and pay agreement with the contractor.

He however noted that Azura Power Plant was “supposed to generate 450 megawatts, but sometimes, they generate less than that, generation is a function of consumption.”

After thorough scrutiny of the documents submitted to the Committee, Hon. Faleke said: “What that means is that whether the power is available or not, we pay $33 million.

“What I am asking you is to show us the document of your evacuation. You gave us a list of figures. We want to be on the same page with you and with Nigerians who are not here.”

In his remarks on the 450MW power generation provided, the TCN Chief Market Operator, Mr. Edmond Eje said the Nigeria Bulk Electricity Trading (NBET) manages the power purchase agreement and would be in a better position to explain that.

“But we will give explanation as much as we know it. We have an agreement with Azura for 450 megawatts. The document before us says 1,755.

“What we look at as market operators is the availability not the capacity. It depends on the condition of the grid and what is available at every particular time.

“In Nigeria today, the demand depends on the load that the generation companies take. The generation of Azura depend on the load demand. There is no particular load demand from Azura.”

In her remarks, Hon. Taiwo Oluga who expressed concern over the conflicting presentation made by the TCN delegation, said: “If it is your document and we are arguing on it, whether it is megawatts or it is in kilowatts, and agreement has been signed on behalf of Nigerians in megawatts. Now you are presenting documents to the House in kilowatts per hour.

“So, Mr. Chairman, I will want to say that maybe these documents, they should re-present while we expect the chief executive to come and explain to Nigerians why $33 million will be paid (to Azura) every month, yet we are not getting results we are not getting power, and that is the root of all the problems in Nigeria as of today.

“And I want to say in developed countries, can we go into such an agreement and on behalf of Nigerians without signing it. Even while signing it, we are not getting the power that is signed (for). I put it to you: you are travelling all over the world.”

In his remarks, Hon. Faleke who observed that non-availability of power has discouraged many Nigerians who are willing to set up industries in the country, “but there is no power, yet we are paying huge sum of money. This is not about TCN but about Nigerians.

“Whatever position we find ourselves; we are just opportuned to find ourselves there.”

He said: “The issue of $33 million is just for one power company. Why the House has interest in this, is because we have concessioned other power stations. Egbin power station is the largest with 1,320 megawatts. It is private. We did not sign take-or-pay with them.”

“This is where I am going. If we have Egbin power station that is generating the highest into the national grid 1,320, and we also have Transcorp with about 650 megawatts and we did not sign take-or-pay with Transcorp, and I am sure we have others.

“What we are trying to bring out is that, what is so special about Azura? Not only that it is special, just two or three people sat down and committed Nigerians to it. We will get there.”

On his part, Hon. John Dyegh said: “I agree that we are more confused but more than that is that between this Azuragate and the Fuel Subsidygate, Nigeria is bleeding badly. I wantto suggest that we submit this to Consultant who will do a proper analysis and get it back to us. And then, there is no point arguing and arguing because you are getting us more confused.

“So honourable Chair, may I move that you please put an end to this session to an end so that we won’t get more confused.”

While ruling, Hon. Faleke who expressed displeasure over the disposition of the TCN delegation to the lingering crisis in the power sector, said: “Transmission Company of Nigeria, first your MD took permission, according to you, to see the

Minister rather than coming to explain to Nigerians and to clarify issues.

“Market Operator, if I understood your earlier statement that they have not been producing up to the 450 megawatt that wassigned and they have justification for not producing up to that; in that case, will you say as a Nigerian that they have violated the agreement they signed?

“What you are telling Nigerians generally is that from the position you hold and being paid by taxpayers, you are not representing Nigerians and that your seat is already in danger. That is what you are telling Nigerians because you

cannot even take an informed decision when it is necessary to take decisions on behalf of Nigerians. That is exactly what you have just exhibited.

“Why you are here before us was because you evacuate the power produced by Generating Companies, not only Azura. NBET was here on Friday and they will still be here tomorrow or so. So, it is not closed. We are only asking you from your own function as an evacuator of power, what power you have been evacuating from a 450megawwats generation company. We have not gone into other power generation companies.

“We have just picked one – not one. And do you know why we are concerned? We are concerned that Nigerians are willing to set up industries but there is no power, yet we are paying huge sums of money. This is just the issue, nothing more; not witch hunting. It is not about TCN, it is about Nigeria.

“So, all the questions that I have for TCN, I have to reserve them until your MD is here. There are other vital questions that this committee will want to ask. When the MD is seated, we will ask. Whatever position we have found ourselves, we are just opportune amongst 200 million people.”

To this end, Hon. Faleke issued a 24-hour ultimatum to the TCN Managing Director, Mr. Sule Abdulaziz to appear before the Committee with relevant documents that would aid the ongoing investigative hearing.

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