May 30, 2024

Controversy trails FG’s gas-powered vehicle initiative

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Emeka Ejere

– It negates auto policy, creates dependency, capital flight – experts worry

Ahead of the launch of about 2,700 CNG-powered buses and tricycles by the Federal Government, stakeholders in the petroleum, transport and automotive industries are in heated debate over the aptness or otherwise of the policy.

While some are of the view that the initiative aimed at promoting the use of Compressed Natural Gas-powered vehicles nationwide will face a major challenge of inadequate CNG stations in the country, others have warned of the inherent dangers associated with converting Internal Combustion Engines (ICE) to compressed natural gas, beside creating more dependency on importation and capital flight.

Yet, there are others, who are wondering why the choice of the semi knock down (SKD) assembly, which, according to them, is almost like importing the vehicles fully built and “coupling” them locally, instead of getting the local manufactures to build them.

CNG can be used in place of petrol, diesel, and liquefied petroleum gas. It is used in traditional petrol/internal combustion engine automobiles or specifically manufactured vehicles.

In October 2023, about five months after the removal of the petrol subsidy, President Bola Tinubu launched the Presidential CNG Initiative to deliver cheaper, safer and more climate-friendly energy. The CNG Initiative was designed to deliver compressed natural gas, especially for mass transit.

The Federal Government earmarked N100bn (part of the N500bn palliative budget) to purchase 5500 CNG vehicles (buses and tricycles), 100 Electric buses and over 20,000 CNG conversion kits, with plans to develop CNG refilling stations and electric charging stations nationwide. Government had said the initiative would ease the burden of the increased pump price on the masses.

Last week, the Presidency, while announcing its readiness to launch about 2,700 CNG-powered buses and tricycles before May 29, when President Tinubu turns one year in office, added that it was set to deliver 100 conversion workshops and 60 refuelling sites spread across 18 states before the end of 2024.

The Special Adviser to the President on Information and Strategy, Mr. Bayo Onanuga, in a statement he signed titled ‘Presidential CNG initiative set for rollout.’ Said: “From the end of May, Nigeria will take some baby steps to join such nations that already have large fleets of CNG vehicles.

“All is now ready for delivery of the first set of critical assets for deployment and launch of the CNG initiative ahead of the first anniversary of the Tinubu administration on May 29.

“About 2,500 of the tricycles will be ready before May 29, 2024…working towards delivering 200 units before the first anniversary of the Tinubu administration,” said the Presidency.

Onanuga also announced the creation of a new plant on the Lagos-Ibadan Expressway that will assemble the tricycles while Brilliant EV will assemble electric vehicles when it receives the Semi Knocked Down (SKD) components.

The Presidency explained further, “The SKD parts manufactured by the Chinese company LUOJIA in partnership with its local partner to support the consortium of local suppliers of CNG tricycles are set for shipment to Nigeria and expected to arrive early in May.’’

Undermining new auto policy

However, stakeholders in the Nigerian automotive industry see the choice of the SKD assembly instead of getting the local manufacturers to build vehicles, as going against the spirit of the new Nigerian Automotive Industry Development Plan (NAIDP-2023).

Some of the key players and stakeholders have been wondering the criteria adopted by the PCNGI committee in selecting the auto plants that benefited from the huge patronage, and why the SKD option, which will have little or no impact on the local industry, was chosen.

With the exception of Brilliant, which it has been confirmed is not a member of the Nigerian Automotive Manufacturers Association of Nigeria (NAMA), the rest of the beneficiaries are known in the industry.

Managing Director of D.V.C Ltd, Dr. David Obi, said it was unfortunate that years after vehicle plants like PAN Nigeria, Kaduna; ANAMMCO, Enugu; Volkswagen in Lagos; and lately, Innoson Vehicle Manufacturing Company Ltd (IVM) in Nnewi, took giant steps in CKD mode of auto manufacturing, Nigeria is still fixated on SKD, which has little or no local value addition.

“Are we moving forward or going backwards?”, Obi, a one-time chairman of ALCMAN, the umbrella body of automotive local content manufacturers in Nigeria, queried.

“If we did not do it before, it would have been understandable. But, these companies did CKD production years ago and I supplied chemicals and sealants to some of them. So, why are we going back to SKD?”

Obi, who also, until recently, was the chairman of the auto group of the Manufacturers Association of Nigeria (MAN), argued against the production of the 6000 units scheduled for delivery this year and the total of one million for production between now and 2027, based on SKD.

According to him, “coupling” vehicles on SKD basis, is also an irony considering that the NAIDP-2023 for which an inter-agency and inter-ministerial committee was inaugurated early this month by the Industry of Trade & Investment Minister, Dr. Nkiruka Uzoka-Anite, is promoting “the transition of SKD to CKD type of automotive manufacturing over the next 10 years.”

Similarly, reacting through a press statement, the Head of Communications at Innoson Vehicles, Mr. Cornel Osigwe, said that at various times Innoson Vehicles has shown and demonstrated the capacity of producing CNG-powered vehicles. The Nnewi plant commenced the manufacture of CNG buses long before the politics of oil subsidy removal started, and wondered “why we were totally excluded from the entire process.”

Osigwe appealed to the committee to explain to Nigerians if there were preferred bidders and why the auto plants with high installed capacities to manufacture buses on CKD bases, were not given equal bidding opportunities.

The press release further stated, “We at Innoson have been manufacturing various models of CNG buses for over two years now. We made history by becoming the first, and so far the only, manufacturer of CNG/LNG-powered vehicles in Nigeria, for which we have earned many recognitions, including awards from The Sun Publishing, Silverbird and the Nigeria Auto Journalists Association (NAJA), all in 2023.

“Moreover, the presentation of the Quality Management Certificate and the MANCAP Certificate by the Standards Organisation of Nigeria (SON) to Innoson in 2023 is a confirmation of our adherence to high international quality standards in the manufacture of our range of vehicles.”

Dangerous venture

Dr. Olugbenga Faleye, chairman & CEO of SAGLEV INC, an electric vehicle company, warned about the dangers inherent in converting Internal Combustion Engines (ICE) to compressed natural gas.

Faleye, in a statement made available to the press, disclosed that it is in fact dangerous to run a diesel or petrol engine converted to CNG.

“And let me point some things out. It is actually dangerous to run a diesel or petrol engine converted to CNG. The engine will run at such a high temperature. The lubricants need to be different.

“And the life of the engine will be cut short. That is one area that people have completely ignored. So, it’s not necessarily the best idea to start running CNG on an engine that was designed to run on petrol or diesel” he stated.

Faleye urged Nigeria not to make the same mistake made by China several years ago while attempting to make the transition from ICE to LPG-powered vehicles.

“I want to draw your attention to a report released probably two or three years ago of how the historians went back and revealed how the Chinese actually tried to use gas, natural gas and LPG to power their systems. It completely failed and they pivoted to electricity.

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