VZCZCXRO3858
RR RUEHMA RUEHPA
DE RUEHOS #0489/01 3461503
ZNR UUUUU ZZH
R 111503Z DEC 08
FM AMCONSUL LAGOS
TO RUEHC/SECSTATE WASHDC 0354
INFO RUEHUJA/AMEMBASSY ABUJA 9995
RUEHZK/ECOWAS COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC
RHMCSUU/DEPT OF ENERGY WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC
RULSDMK/DEPT OF TRANSPORTATION WASHDC
RUEAIIA/CIA WASHINGTON DC
RHEFDIA/DIA WASHINGTON DC

UNCLAS SECTION 01 OF 03 LAGOS 000489 
 
SENSITIVE 
SIPDIS 
 
STATE PASS OPIC FOR DERB, ZHAN, MSTUCKART, JEDWARDS 
STATE PASS TDA FOR LFITTS, PMARIN 
STATE PASS USAID FOR NFREEMAN, GBERTOLIN, GWEYNAND, SLAWAETZ 
STATE PASS EXIM FOR JRICHTER, KJACKSON, KJANIK 
DOC FOR 3317/ITA/OA/KBURRESS 
DOC FOR 3310/USFC/OIO/ANESA/DHARRIS 
DOC FOR USPTO-PAUL SALMON 
TREASURY FOR DFIELDS, AIERONIMO, RHALL, DPETERS 
TRANSPORTATION FOR KSAMPLE 
 
E.O. 12958: N/A 
TAGS: EINV EFIN ECON EAID PGOV NI
SUBJECT: NIGERIA: SOUTHEAST, SOUTHSOUTH INFASTRUCTURE PROJECTS MAKE 
PROGRESS 
 
Ref: A) Lagos 399 
B) Lagos 303 
C) Lagos 265 
 
¶1. (SBU) Summary: Abia State's Geometric independent power project 
(IPP), projected to be operational April 2009, has started 
construction on only one substation to date. Akwa Ibom's (AI) IPP, 
scheduled for testing in December 2009, will generate 165 megawatts 
(MWs) of power, 65 of those for distribution within the state.  AI's 
international airport will be operational in December 2009; the 
project coordinator predicts cargo and domestic traffic, now using 
the Calabar airport, will make AI's airport profitable. Tinapa 
business resort, in Cross River, has received Federal Government's 
permission to open, and the associated resort hotel will open in 
December 2008. The five-star Le Meridien in Akwa Ibom and Tinapa in 
Cross Rivers will link by water taxi.  Both Abia and Akwa Ibom are 
working to raise internally generated revenue to offset the drop in 
oil price. EconOff noted significant progress on most projects since 
her most recent trip two months ago. End Summary 
 
¶2. (SBU) A visit to Enugu, Anambra, Abia, Akwa Ibom, and Cross River 
States November 16-20 showed that progress was being made on 
ambitious infrastructure projects in the Southeast and South-south. 
 
 
Geometric's April 2009 Commissioning Unlikely 
--------------------------------------------- 
 
¶3. (SBU) I.M. Ukut, Geometric's Technical Adviser, believes the 
power plant will be operational April 2009. (Note: Geometric is an 
independent power project (IPP) which will service industries in 
Aba, the industrial heart of Abia State, and not connect to the 
national grid. End Note) Of the four power substations Geometric is 
to build, construction has only begun on the one substation on the 
plant site.  Three GE turbines are already on site.  Ikut said 
Geometric had acquired more land for the expansion phase, estimated 
to begin in 2011, which will bring Geometric's total power 
generation up to 300 megawatts (MWs) and supply power to Abia's 
northern region and possibly to Port Harcourt in Rivers State. 
Ndukwe Adindu, Commissioner for Finance, Abia State, said Geometric 
will provide the much needed power for Aba's manufacturing 
industries and some public facilities. (Comment: Given the 
construction progress observed on the ground, it is unlikely that 
Geometric will be operational by April 2009. End Comment) 
 
Akwa Ibom's Road, Airport, IPP Goals Ambitious 
--------------------------------------------- - 
 
¶4. (SBU) Bassey Akpan, Commissioner for Finance, Akwa Ibom (AI), 
said the Akwa Ibom State Government (AISG) is constructing and 
rehabilitating 600 kilometer (km) of road. (Ref A) AISG plans to 
construct 20 km of road in every local government area, and promises 
to have each road connect at least three communities. AISG, like the 
Abia State Government, is also taking on the rehabilitation of 
federal roads. (Note: EconOff observed that, in the two month period 
since her visit to AI, road expansion and construction activities 
had increased significantly. End Note) 
 
¶5. (U) According to Akpan, the 165 MW Ibom Power Project is at 95 
percent completion and will conduct a test run in December 2008. 
The AISG and the Power Holding Company of Nigeria (PHCN) had agreed 
to the state "retaining" 65 MWs of the 165 MWs the plant will 
generate for the national grid. (Note: Akpan told Pol-Econ Chief in 
a subsequent conversation that a clause in the license given by the 
Federal Government (FG) provides for distribution of 65 MWs within 
the state.  Akpan noted, however, that even that allocation cannot 
guarantee a steady supply of power to the state.  Akpan said that 
the Nigerian Gas Company's (NGC) gas line from Port Harcourt 
experiences frequent disruption, resulting NGC says, from an 
insufficient supply of gas. End Note) 
 
¶6. (SBU) The USD 300 million Ibom International Airport will be 
commissioned in March 2009, Akpan projected. (Note: U.S. Dyncorp was 
 
LAGOS 00000489  002 OF 003 
 
 
the original contractor for this project. End Note (Ref C)) However, 
Marco Fenini, Project Coordinator, Akwa Ibom International Airport 
Company (AIIA), said the airport will be operational in September 
2009 barring any delays. The airport hangar will be able to 
accommodate two Boeing 747s, and the runways will span 3.2 km. A 
road linking the airport directly to Uyo, the state's capital, is 
under construction.  Fenini believes that the AISG will be able to 
recover its investment through the airport's international air cargo 
operation. He also said that because 80 percent of air traffic at 
the Calabar Airport, the nearest airport to AI, comes from AI, 
passenger traffic will also buoy the new airport's businesses.  The 
AISG had signed four Memoranda of Understanding (MOUs) with the 
local communities to assure that airport employees are hired 
locally. Currently, there is a 20 to 1 ratio of local to expatriate 
staff. 
 
Tinapa Opens for Businesses 
--------------------------- 
 
¶7. (U) Francis Ekom, Assistant General Manager, Tinapa Business 
Resort Ltd., said the resort had finally obtained approval from the 
FG in early November, and that some shops have already opened for 
business. (Ref B) The two-star, 243-room hotel and remaining shops 
will open in December 2008, and the casino and theater will open in 
January 2009. Retail giants, including Walmart and South 
Africa-based Flamingo and Shoprite, are slated to come to Tinapa. 
(Note: Post has not been able to confirm Walmart's participation. 
End Note) The resort currently employs 6,000 local employees during 
the construction phase of the project, and has the potential of 
hiring up to 12,000 employees once it becomes fully operational. 
The state initially had planned to go to the capital market to raise 
additional funds through an initial public offering (IPO), but had 
shelved this plan given the current global financial crisis. 
 
Akwa Ibom-Cross Rivers Collaborate on Tourism 
--------------------------------------------- 
 
¶8. (SBU) Akwa Ibom and Cross Rivers state governments are looking to 
link the five-star Le Meridien Hotel and Golf Resort (Uyo, Akwa Ibom 
State) with Tinapa (Calabar, Cross Rivers State) through a water 
ferry system.  Akwa Ibom Governor Godswill Akpabio has visited 
Tinapa twice for this purpose, Ekom said.  A successful linkage 
between Uyo and Calabar, a popular tourist destination, will boost 
the tourism industry and scale up the commercial and socio-economic 
dividends, Ekom posited. 
 
Oil Price Dive Spurs IGR 
------------------------ 
 
¶9. (SBU) In light of falling oil prices, states are exploring ways 
to raise their internally generated revenue (IGR) as a way to fund 
development projects. According to Commissioner Adindu of Abia 
State, eighty percent of the state's revenue comes from the FG 
through derivation and allocation, and only 20 percent is internally 
generated. Expecting a decline in the revenue stream from the FG for 
2009, Abia State Government (ASG) plans to raise its IGR to 50 
percent of all revenue through taxation.  ASG is devising new 
taxation enforcement schemes for businesses and the informal sector, 
including mandating business registration and working through trade 
and labor unions. Adindu believes the IGR will rise and make up 
fully 40 percent of Abia's revenue by May 2009.  Commissioner Akpan 
of AISG also noted the need to find alternative revenue sources 
through taxation and by developing the agriculture sector. (Note: He 
told Pol-Econ Chief that the state has little borrowing, but that a 
total of 256 people-oriented projects, including free education at 
all levels, will require substantial revenue. End Note) 
 
¶10. (SBU) Comment: Large-scale infrastructure projects are dotting 
Nigeria's southeast and south-south regions.  While state government 
officials may be overly optimistic about projected completion dates, 
EconOff noted significant progress on most fronts, including roads, 
power projects, airports and tourism facilities since her trip only 
two months ago. End comment. 
 
LAGOS 00000489  003 OF 003 
 
 
 
¶11. (U) This cable has been cleared by Embassy Abuja. 
Blair