Yemisi Izuora
Electricity distribution companies in the country have asked the federal government to rescind any plan to review the processes that saw to the handing over of 11 successor companies of the Power Holding Company of Nigeria(PHCN) to new investors on November 1,2013.
They argued that the planned review is a distraction, adding that inherent dangers in the exercise outweighs the supposed benefits the government would derive the review of the auction of the assets, which he said was adjudged to be transparent
Oriental News Reports that Minister of State for National Planning, Mrs Zainab Ahmed, recently conveyed the federal government’s intent to review the privatization of the assets due to inherent challenges in the power sector
Ahmed, who also said the privatised power sector will open up for new investment process to enable new investors further in the development of the sector.
“The power sector has been privatised, but I am sure that every Nigerian will testify that the privatisation has not worked out well.What we set to achieve in terms of the development of the power sector has not yet happened.
“We have now come to a point where government, which is a share holder in power sector, and the investors must come together and decide to cede some of their holdings to the fresh investors.The ceding of the holding to the fresh investors will enable them to inject new funds and new expertise to enable us to grow the power sector the way that will serve Nigerians.
But , at a workshop for energy journalists on Thursday,Barrister Sunday Oduntan,Executive Director, Research and Advocacy of the Association of Nigerian Electricity Distributors(ANED), said the cancellation of the privatization would worsen the sector, and portrays to foreign investors that Nigeria does not respect the sanctity of contract.
He added that privatization was not responsible for the stunted growth of the power sector, but the inconsistent regulatory framework, which paved way for liquidity crisis therein.
Oduntan also said it was not true that the privatization of the sector was rigged by the former President Goodluck Jonathan to pave way for his cronies to acquire the power assets.
According to him, the World Bank was involved in the privatization process and it commended the exercise as the most transparent in Nigeria’s history.
He added that it was the transparency that made the privileged class like Alhaji Aliko Dangote and Femi Otedola to lose their bid for the asset
He also faulted condemnation in some quarters that distribution companies have not added value to the nation’s power sector in the last 4years.
According to him,since the acquisition of the assets, the companies have connected new electricity customers and communities, while 612,552 meters were procured and installed hithertho.He said the companies network upgrade is happening rapidly than pre-privatization era, just as improved customer care and employment opportunities have become the order of the day among the power firms in the country.
In his paper,’’Getting To Know The Power Sector and Its Challenges’’, Professor Yemi Oke, also said the planned review of the privatization process is not the best route for Nigeria to ply in its quest to get the power sector right.
He said electricity distribution companies are still challenged by factors like cost reflective tariff and market shortfalls, regulatory flipflop, capital expenditure limitation and policy of eligible customers, which he added negates the spirit of the performance agreement government signed with the power firms
To overcome the challenges, he emphasized the need for federal government to be committed to the sanctity of the privatization contracts/agreements.
He added,’’Government sensitivity to tariff review in the wake of spiral economic indices is understood.Central to achieving a self-sustaining Nigerian Electricity Supply Industry, NESI, is a cost reflective tariff.This can be achieved by either getting the customers to pay or government pays’’.