Ovie Omo-Agege, deputy senate president, says Nigeria’s agreement with Azura Power could be another P&ID case on the neck of the country.
He is seeking an outright cancellation of the agreements Nigeria has with Azura Power and Accugas which have placed enormous strain on the country’s resources.
Nigeria is obligated to pay Azura $30 million monthly with or without power being taken from the generation company.
To exit from the contract, Nigeria will have to pay $1.2 billion — enough to build a new 1,000mw plant.
Nigeria is also committed to paying Accugas $10 million monthly with or without gas supply to the Calabar GenCo, owned by Niger Delta Power Holding Company (NDPHC) Ltd.
“We cannot review that agreement, we will need to cancel that agreement outright. We have another P&ID in our hands clearly,” Omo-Agege said on Wednesday following a presentation by the power committee.
“With the respect to the other agreements, if we are talking about review what we have identified so far is lack of capacity. We have the wrong set of people holding these assets, no review can get them out. Clearly, those agreements have to be cancelled because they don’t have capacity.”
The upper legislative chamber began seeking a way of out the agreements the federal government after the report on the country’s power problems was presented for consideration by Gabriel Suswam, chairman of the committee on power.
Suswam said the agreements entered into on behalf of Nigeria were without “due diligence”.
“I can get the Accugas and Azura (agreements). On both sides, there is this mutual breach of the agreement. From the onset, the parameters that were presented by the government were faulty. Some of them without due deligence,” the former Benue governor said.
The Benue lawmaker said the agreements should be given to “senior lawyers” to make assessments and recommendations.
“The senate will do some funding, these need to be given to very senior lawyers to review for us,” he said.
“The danger in Azura and Accugas is if we default, they draw down immediately from our foreign reserves. That is how we have been tied up.”
On his part, Ajibola Basiru, senate spokesman, expressed optimism that there is a way out of the agreements.
“Whatever we are doing as parliament, let us get copies of the agreements. Let us get people who are experts to give us independent assessments,” Basiru said.
“I don’t believe that there is an agreement that cannot be faulted.”
Sabi Abdullahi, deputy whip, said there should be a team to review the agreements within the senate and outside, “so parliament could be best informed on the next step to take.”
Also speaking, Senate President Ahmad Lawan said the upper legislative chamber needs to do something “fundamental” to address the situation.
“The person who briefed me about Accugas and Azura warned me, he said you’d be shocked. And I was shocked,” Lawan said.
“So I asked him (Suswam) to go to the US, to Washington, because the World Bank guaranteed, we can’t be paying 18 billion, 20 billion for no service. How do we renegotiate this? The World Bank said ‘no, they warned us not to go into that agreement’.
“Now the only way to go out of it is to pay $1.2 billion. With $1.2 billion we can get our power sector working. So i think we need to do something fundamental honestly. As long as these agreements remain, valid these companies will always come for more money.”
The senate went ahead to approve the committee’s report for “cost reflective tariffs” and removal of custom tariffs to clear meters stuck at the ports.
The senators also agreed that there is immediate need to address the issues on the value chain “that can unlock stranded generation.”
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