BPE prepares coal mines for sale to complement power sector privatisation

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coalAs a complement to the ongoing privatisation of the power sector, the Bureau of Public Enterprises (BPE) has initiated the process of selling the seven coal blocks currently being managed by the Nigerian Coal Corporation (NCC).

The seven blocks are the outstanding from the concession of the coal mines carried out in 2007.

When the sale is completed, electricity generated from the several coal blocks will complement output from the power sector, which reform is nearing completion.

Nigeria, according to a 1990 study commissioned by the power ministry, has ample coal reserves of 639 million tons.

In a work plan released by the bureau, the first of the coal blocks to be sold is the Ogwashi-Azagba. The sale process, according to a source, is already at advanced stage.

Others to be sold at a later date are the Ezimo, Inyi, Okpara, Amansiodo, and Onyeama coal mines. These five are to be privatised when the Federal Government finalises the report on the coal blocks being carried out by the power and the mines and steel development ministries.

However, the Onwukpa coal block, which is currently under litigation, will be exempted from the privatisation until the various issues are settled.

The BPE is also about to dispose the non-core assets of the NCC, including the residential houses, commercial properties and vacant land. The residential houses would be offered to former staff members of the Corporation who are in occupation, while other properties would be sold to the general public.

The Federal Government efforts at making the coal sector as a major contributor to the nation’s electricity requirements began in 1984, when Japanese Support Institute submitted a comprehensive report on coal power. A copy, which is still in the power ministry, reveals that coal deposits in Nigeria can do over 3000mw.

The report was updated during late President Umaru Yar’Adua’s administration, causing a budgetary appropriation of N8.5 billion in 2010 and another N3.9 billion in the 2011 budget.

The fund, which was committed into quantifying the country’s coal reserves, enabled the engagement of foreign consultants using geophysical methods to evaluate coal deposits in Enugu and Gombe states.

In the course of the work, eight coal blocks were selected, including five in Enugu – Eyama, Okpara, Eyin, Eziegbo, and Amansiodo, otherwise called Enugu axis lot one.

The second lot comprises the three others in Kogi, Benue, and Gombe from which the government is to build three coal fired power plants for electricity. Each of the plants is expected to produce 1000 megawatts.

 

Information from Business Day was used in this report.