Manufacturers to build power plants in 28 business clusters

No Comments » October 19th, 2013 posted by // Categories: Energy Development Project



Manufacturers to build power plants in 28 business clusters


THE Manufacturers Association of Nigeria (MAN) has embarked on the construction of power plants in all the 28 business clusters around the country.

This, according to the association, has replaced its initial plans to construct over 2,000MW of Independent Power Project (IPP), which it embarked upon about seven years ago.

Already, the association has completed 550mw in three of the 28 clusters in the country and is currently partnering some private investors in the power initiative.

Speaking on the initiative recently in Lagos, Chairman of Infrastructure Committee of MAN, Reginald Odiah, identified lack of fund and inability for the association to engage in distribution of electricity.

According to him, it will be difficult for the association to distribute the power generated to all its members across the country.

Odia noted that power is the engine that drives industry and economic development, adding that it is therefore imperative to develop a sound power policy that would directly affect the lives of Nigerians in all sectors.

He posited that far-reaching policy actions need to be put in place urgently to enable the country generate adequate electricity.

He further observed that the Nigerian economy could only grow if there is a cost effective and reliable power supply.

The chairman lamented that power, which is usually five per cent to 10 per cent of production cost in most countries, constitutes between 30 per cent and 40 per cent of the cost of production in Nigeria presently.

According to him, “when other costs of infrastructural deficiencies are added cost of production in Nigeria goes well beyond reach. It is nine times that of China and four times that of Europe. When compared with South Africa and Ghana, production cost is four times and two times respectively of these two African countries.”

Odia said that electricity power audit conducted on 2,500 members nationwide showed put average peak power demand at 4,850mw, peak power supply from PHCN at 1,018mw and in-house installed power generating capacity of members at 5,150mw.

He disclosed that members of the association owned and installed in-house over 5,480 units of diesel/gas powered turbines and generating plants, while members spend over N2 billion as average cost of running and maintaining these in house power plants per months.

“This amount is apart from the average monthly PHCN bills paid by members, which again run into hundreds of millions of naira per month”, he added.

The implication of this, he disclosed remained high cost of production and inability to compete with manufacturers from other parts of the world.

He stated:  “This has resulted to low production capacity and inability to compete effectively with our foreign counterparts; inability to contribute optimally to Gross National Product, which currently stands at about four per cent; poor return on investment; closure of factories and migration to greener fields by manufacturers as well as uncertainty on investment in Nigeria.

“It is sad to note that 40 per cent of our production cost goes into the provision of electricity as against five per cent to 10 per cent in other developed economies. As a result of this and other infrastructural deficiencies, cost of manufacturing in Nigeria is about two times that of Ghana, four times that of South Africa and approximately nine times that of China”

Odia noted that the poor performance of the electricity power sector in Nigeria could be attributed to the neglect of the power sector by successive government over a long period of time with little or no investment in this sector over the period.

He added that that there has been poor planning and management of the electricity power infrastructure by the utility planners and managers, which he said, might be as result of monopoly enjoyed by the nation’s electricity company.

“There is also high transmission and distribution losses as a result of use of old and out dated equipment due to lack of government attention in the sector”.

Author of this article: by Roseline Oker
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