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Experts speak on how to revamp power sector

By Emeka Anuforo, Abuja
04 December 2016   |   4:35 am
Following Federal Government’s decision not to reverse the privatisation of the power sector, stakeholders are now canvassing a radical shake-up of the sector, to stimulate optimal performance.
Dr. Frank Udemba Jacobs, President of MAN

Dr. Frank Udemba Jacobs, President of MAN

• Canvass Revocation Of Licenses Of Non-Performing Utilities
• Manufacturers, Consumers, Workers Demand Investigation, Public Inquiry Into Privatisation Process
• Remaining 40 Percent Govt Shares In Discos Should Be Sold Immediately ·Workers Write BPE, Demand 10 Per Cent In Utilities

Following Federal Government’s decision not to reverse the privatisation of the power sector, stakeholders are now canvassing a radical shake-up of the sector, to stimulate optimal performance. They also suggested the revocation of the licenses of non-performing utilities as deterrent to others.

Experts, including workers unions believe the Nigerian Electricity Regulatory Commission (NERC) as currently established is too weak to execute that mandate.

They want government to urgently review the Electricity Power Sector Reform Act (2005) and give NERC full independence free from political interference. With a wholly independent NERC, a firm regulation of the sector would be guaranteed and utilities will sit up to their share purchase and performance agreements.

President of the Nigerian Consumers Protection Network, Barrister Kunle Kola Olubiyo, was emphatic that the utilities had failed to deliver post-privatisation.

Olubiyo, who is also the President Network for Energy Reform, urged government to sell off its remaining equities in the electricity sector on the Nigerian Stock Exchange for serious investors to buy.

According to him, “The first step is that government should divest its equity. Let it run strictly as business. The gas operators have a huge indebtedness from the generation companies.  The DISCOs are receiving power from generation companies and they are not paying.  The gas providers are not being paid.

“Government should let go of its equity in the value chain of the power sector. Government, should now move to off-grid rural electrification in a build, own and transfer model in different clusters across the country. The grid system all over the world is not efficient and not easy to manage. We cannot industrialise by putting our entire efforts into a grid system. We need to restore hope. The Change mantra is to drive the system. President alone cannot do it. These are simple policies.”

He spoke of the unwillingness of the Presidency to step on toes through reversal of the privatisation process.

But General Secretary of the national Union of Electricity Employees (NUESS), Joe Ajaero, did not mince words in calling the privatisation a ‘scam’.

“Even the so-called bidding process was a scam. Some of the companies that won the bids emerged on the eve of privatisation. We need to have a holistic review of the process. If it has not worked, what is wrong in cancelling it,” he asked rhetorically.

Meanwhile, electricity workers in the country have petitioned the Bureau for Public Enterprises (BPE) demanding 10 per cent of government’s remaining 40 per cent share in the distribution companies, as part of an agreement reached during privatisation.

Ajaero, who dropped the hint in a phone interview with The Guardian, said:  “In line with the privatisation Act, workers were supposed to be allocated 10 per cent. Our lawyer, Femi Falana, has written the Bureau for Public Enterprises (BPE) to demand this. Three years later, nothing has been allocated to workers.

“Even government that claims to be retaining 40 per cent in the Discos has not received one Naira in dividend since the privatisation ended.  It means that government sold 60 per cent, but in the real sense, handed 100 per cent of the distribution companies to investors. This is now the case of the buyer being the seller.  We have to investigate all these things.”

On his part, President of the Manufacturers Association of Nigeria (MAN), Dr. Frank Udemba Jacobs agrees that the privatisation process should be reviewed to make it more result-oriented.

He disagreed with calls for outright cancellation, premising his views on the possible negative impact on the nation’s investment climate.

The MAN chief was emphatic that the current operators of the sector don’t have the capacity to deliver on their mandate.

He added:  “I strongly think that government should revisit the entire power privatisation because it is obvious that the current operators do not have the capacity to achieve effectively. With less than 5000 megawatts of electricity at the peak in a country with a population of over 182 million people, you can see that there is a huge challenge. To improve supply, there may be need to hasten the introduction of the micro-grid or community-grid system.  Embedded generation has been recommended, as it will increase power generation. More players with requisite capacity should be brought in. Hiking up tariff is not the solution to improving sector liquidity.”

Acting Chairman of the Nigerian Electricity Regulatory Commission (NERC), Dr. Anthony Akah, observed that dissolution of the boards of non-performing utilities was a possibility.

He, however, asked for patience from the public, stressing that the privatisation exercise would need to operate for at least 5 years for desired results to begin to set in.