Nyabarongo power plant completion delays frustrate govt

photo

Nyabarongo hydro power plant is still under construction more than four years since the contract was signed. (File)

The most recent deadline for the completion and handover of the 28 Megawatt Nyabarongo power dam station was April 19. It was never met.

Now The New Times understands that Angelique International Limited, the contractor of the project, has since been engaging the government, represented by Ministry of Infrastructure (Minifra), to set a new deadline.

As of today, they are yet to agree on a new date but negotiations are ongoing, sources said.

When contacted for a comment regarding the matter, Gopi Krishna, the regional manager of Angelique International said he was “under instructions from the client not to speak to the press about the negotiations.”

Nonetheless, he conceded that they couldn’t meet the previous deadline for reasons they have reportedly explained to the client and details of which he declined to share with the press. He referred us to the government to divulge details.

Anicet Nsengiyunva is the project coordinator of the power project whose completion is a matter of urgency as it’s expected to add 27mw to the national grid and help ease the country’s electricity shortfalls.

When contacted last week, he said: “Angelique failed to meet the completion date of the project without a clear reason. They are now demanding for a new date of October 31. However, an official extension on the client side is still under discussions because they must justify their delays first.”

However, The New Times has independently gathered that despite the ongoing feet-dragging over a new deadline, work at the dam site located in Muhanga District in Rwanda’s Southern Province, 47 miles southwest of Kigali has not stopped.

A source within Minifra who requested not to reveal their identity because they are not authorised to speak on behalf of the ministry, said, “technically, the contractor is working without a contract on the hopes that the one that expired on April 19 will be extended to a new date that’s subject to negotiation outcomes.”

Dan Bigaruka, a regional contract management specialist, explains that at this stage, government technically has no option but to  extend the deadline since the works are in advanced stages and denying a deadline extension would only cost both parties.

“If you say they have failed to agree, that would mean that the client and contractor are avoiding responsibility for the missed deadline because it has cost implications such as who pays the bills during the extra-time?” Bigaruka said.

His explanation is close to what the project coordinator, Nsengiyunva, says.

“Of course, they are working under penalty conditions, they missed the deadline so they must go on with the work because the contract terms have penalties in case of failure to meet deadlines,” he said.

Asked whether government will accept to extend the deadline to end of October as requested by the contractor, Nsengiyunva was noncommittal, saying that will depend on what is decided after reviewing the reasons on which the request is based.

“If we extend the deadline, it would mean we waive the penalties,” he said, adding that it seems that is exactly what the government wants to avoid.

Tomorrow, new Infrastructure minister James Musoni is expected to make a field trip to the project site and evaluate the work so far done. The visit is expected to inform the minister whether to grant a deadline extension or not.

According to Nsengiyunva, the contractor, Angelique International, is not well organised and that they have exhibited signs of poor coordination which he believes is the main reason behind the delay of the dam whose commissioning has been repeatedly pushed forward due to unfinished works.

“They have to take orders from New Delhi and that’s not how a contract should run,” the coordinator said.

Apparently, because of this, Angelique International chief in India has been summoned to join the minister on his field trip and if a new deadline is to be set, he must commit to it. 

He’s expected in town today.

However, from sources within the contracting firm, The New Times understands that at least 98 percent of the work is complete. For instance, the 27 kilometres transmission line from the power station to Kilinda sub-station is complete and was successfully tested last week.

The dam’s water reservoir is also undergoing filling process and the ongoing rains are expected to have filled it by the end of this month. 

The dam has two turbines, each 14 megawatt capacity and both will also be ready for commissioning by the end of October.

A 4-centimetre leakage on the tunnel early this year has also repeatedly been fixed; it took a month and possibly also contributed to the missed April deadline.

Background

In July 2008, government awarded a tender to Angelique International Limited to undertake the 28mw hydro-power project at an initial cost of $97.7 million. 

The project would be funded by a $80-million soft loan from the Government of India, while Government of Rwanda would contribute $17.7 million.

In May 2009, the contractor received a letter permitting him to start work and was expected to complete the project within 48 months. 

But real work would start in March 2010, almost a year later because of complications at the site that made it difficult for the contractor to commence executions.

These included settlers around the project who demanded compensation before they vacated, it also emerged that the feasibility study report was inaccurate because it had been conducted almost a decade ago. 

This called for a new mini-study to up-date the old one and it recommended several changes in the design of the dam which needed more time and a larger budget.

Both government and the contractor agreed to extend the deadline by 14 more months which would expire in April. But that deadline too has gone.

The changes in designs expanded the initial budget by an extra $11.1 million. This additional money would be paid by Government of Rwanda. 

The New Times has learnt government will make $5 million payment to the contractor this week and the balance of $6.1 milion will be paid after the commissioning.

There are claims that delayed payments by the client could also have slowed the contractor’s pace which means that government takes a share of blame for the missed deadline.

In March, the project chief engineer, Bosco Mugabo, pledged to the public that “somewhere between early June and late July, the project will be fully completed and start supplying power to the grid.”

The Nyabarongo power station, which will be the country’s largest hydropower installation, is part of the government’s seven-year electrification plan (2011-2017) that aims to increase electricity access to at least 70 per cent by 2017.

Early this year, President Paul Kagame told those charged with meeting that target that ‘I want electricity, quickly, quickly.”

Recent developments have seen the restructuring of the Energy Water and Sanitation Authority to create a specialised firm, Rwanda Energy Group to address that urgency and the appointment of former Local government Minister Musoni to head the Infrastructure Ministry which oversees the country’s energy projects was seen by analysts as aimed at obtaining faster results.

Power and investors

A study conducted by Prof. Ernest Mazimpaka, who holds a doctorate degree in energy and development, on behalf of the Private Sector Federation (PSF), concluded that inadequate power supplies tops the problems nagging local investment.
 
The study found that businesses are losing 6 per cent of sales revenues to electricity cuts and that those without back-up generators; losses can be as high as 20 percent, annually.
 
It’s feared that if Rwanda’s electricity woes are not fully addressed and fast, they could hinder the country’s set targets of 2020 or the second Economic Development and Poverty Reduction Strategy (EDPRS2) goals of growing at 11.5 per cent let alone employment creation targets of 200, 000 off farm jobs per year.
 
Installed electricity generation capacity has increased from 45 MW in 2006 to 110.4 MW by the end of the 2012/2013 financial year but the demand is even higher making this capacity inadequate.
 
An additional 50 megawatts was expected to be added by the end of the 2013/2014 fiscal year but that included the Nyabarongo power station which failed to meet its commissioning deadline in April.
 
By 2017, the target had been to generate 1000MW but it was revised downwards to about 500MW.
 
If Nyabarongo’s 27MW finally come, several diesel generators running Rwanda’s thermal power plants could go silent and save the country a major cost on imported heavy fuels.