Federal Govt, Korean firm in talks over sale of Egbin plant

The Federal Government is discussing with a South Korean firm, Korean Electric Power Corporation (KEPCO), to sell Egbin power plant.

The Minister of State for Power, Nuhu Wya, confirmed that the government is in talks with an investor to buy core equity holding in the generation company, but didn’t reveal its name and the percentage of shares it wants to sell to the company.

However, our correspondent gathered that it is KEPCO. It is one of the major contractors that built the plant and the government previously gave it the management contract for the plant, which at a point broke down and the company left.

But with the ongoing reforms in the power sector, which are targeted at providing sustainable electricity supply, the company was brought back because of its knowledge of the plant.

The minister, who was at Egbin during the weekend to inaugurate a new hydrogen plant built for cooling of the turbines, said: “The company has come back and we have asked them to review the improvements. Discussion is ongoing and when transactions advance, we will make it public.”

He noted that equity shares that would be given to KEPCO would depend on cost and until agreement is reached, it would be difficult to determine the percentage of shares to be sold. Besides, he explained that exposing the level of discussion reached with the company might jeopardize the deal.

The government has also spent N1.922 billion on repairs of the plant and building of a new hydrogen plant for the cooling of the turbines. While N1 billion was spent on repairing steam turbine 1 (ST-01), N922 million was spent on building the new hydrogen plant after six years the project was advertised.

The Chief Executive Officer of Egbin Electricity Generation Company, Mr Mike Uzoigwe, an engineer, said: “The contract advertisement for the construction of the new hydrogen plant took place in 2004 and due process for award took three years and, in 2007, the contract was awarded to Messrs Valenz Holding Nigeria Limited for N778 million. Due to delay, there was a variation of 21 per cent arising partly from cost of importation of foreign components needed for construction of the plant. This shot up the cost to N922 million in 2009.

“The repairs of steam turbine 1 (ST-01), which crashed in December 2009 also gulped N1 billion,” which makes five of the six turbines current functional with generation standing at 1080mw and Uzoigwe assured the minister that if the government would make money available, the company would begin the repairs of ST-06, which has been out of use in the past two years, to be able to restore the plant to its full installed capacity of 1320mw, he said.

Source : The Nation