Zungeru power project cost not high –FG

The Federal Government has faulted the report that the contract for the Zungeru Hydroelectric Power Project is extremely high.

It was reacting to a report indicating that the contract price was unusually high when compared with the cost of similar projects in other parts of the world.

The government also said on Sunday that N280m would be spent to repair a power distribution centre destroyed during a protest in Ibadan more than a year ago.

A statement on Sunday by the Ministry of Power stated, “The selective benchmark pricing of three projects in Ethiopia, China and Brazil is over simplifying the complexity of three hydropower projects.

“It is important to note that the cost of such projects depends on the details of the design, topography, geo-technical conditions of the site and the availability of supporting infrastructure to deliver the project.”

“It should be noted that the cost of dams worldwide further depends on the specific social and environmental issues and ancillary structures that are to be provided along.”

Citing the 2012    worldwide survey of the cost of large hydropower projects by the International Renewable Energy Association, which indicated that the cost of $1.05m to $7.65m per megawatts of installed capacity, the ministry stressed, “The Zungeru project has a projected cost of energy at five US cents perkWHr, a very favourable figure when compared with the IRENA survey of a worldwide average cost of two to 19 cents for large hydropower.”

The  ministry insisted that  contrary to insinuations that the cost of the contract was bloated, “The engineering procurement and construction cost of the Zungeru hydroelectric project approved by Federal Executive Council is $1,293m, including transmission lines and substations, indicating a cost of $1.847m per megawatt. It is obvious that the benchmark price per MW for the Zungeru project falls at the low end of  the average world pricing.

“It is also to be noted that the Bureau of Public Procurement had, in its Due Process Review Report, indicated the average cost of similar large hydropower projects and accepted the competitively tendered price for the project.”

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