A Review of the Nigerian Energy Industry

Enugu Disco: Final decision expected this week

Atedo Peterside
Atedo Peterside

09 September 2013, Lagos – As tempers rise over the controversial sale of the Enugu Distribution Company, indications emerged at the weekend that the Federal Government may have bowed to pressures to clear the way for a meeting of the Technical Committee of the National Council on Privatisation, NCP, to take a final decision to resolve the impasse.

Checks showed that a crucial meeting of the Technical Committee of the National Council on Privatisation, NCP, has been fixed for Tuesday where the fate of Interstate Electrics, the winner of the bid will be decided amid fears in some quarters that the company, which failed to make the mandatory payment of $490 million at the close of the deadline on August 23, may not be able to muster enough resources to run the distribution company.

When contacted on Friday, the technical committee chairman, Mr. Atedo Peterside, confirmed the meeting but declined to talk further on the matter, saying it would be unfair to preempt the outcome of the crucial meeting.

In his response, Peterside said: “A meeting of the Technical Committee of the National Council on Privatisation has been convened for Tuesday morning. I am the Chairman of that Committee. It would be inappropriate for me to second-guess the outcome of a meeting, which has not even held.”

Although the outcome of the meeting is expected to be ratified by the NCP, sources said the Presidency wants the matter resolved as urgently as possible.

A newspaper report had quoted Peterside as blaming the leadership of the Bureau of Public Enterprises, BPE, for frustrating attempts by his committee to evaluate the controversial sale of the Enugu Distribution Company.
Interstate Electrics, the winner of the bid for the company, failed to make the mandatory payment of $490 million at the close of the deadline on August 23. However, the failure of BPE to invite the reserve bidder to take over the slot had incurred the anger of stakeholders in the region.

A source disclosed that the Presidency had to step in so as to give credibility to the privatisation programme by directing the BPE to make it possible for technical committee of NCP to meet on the matter without further delay.
Peterside was said to have been under pressure from the 23-member strong technical committee to call an urgent meeting.

He was quoted as saying that his committee was unable to meet as the BPE failed to release funds to pay for hotel bills and sitting allowances of the committee members, a development viewed as a veto of all the efforts to convene a meeting of the Technical Committee.

He was quoted as saying, “As you are all aware, the Technical Committee serves as an advisory/due process watchdog over the BPE and we are accountable to the NCP. Accordingly, I find the DG’s surreptitious attempt to keep us in the dark objectionable in the extreme.”

Following the passing of the deadline and the failure of Interstate to pay up, governors of the South Eastern states were said to have started mounting pressure on the presidency to intervene by calling the reserve bidder to purchase the power asset, but so far, the BPE appears bent on following a determined course, which has now called to question the integrity of the power privatisation programme.
Farmers’ Dilemma
The beauty of democracy played out in Abuja at last week’s Nigerian Economic Summit where government and private sector operators deliberated on how to make agricultural sector the nation’s cash cow as against the present reality where all attention is focused on oil revenue. As expected, the summit provided an ample opportunity for the organisers and participants to touch on economic issues especially in relations to the agric sector.

It was also a platform for government officials to score the incumbent administration high on some of its policies, among which was its fertiliser distribution.

However, the tide changed with Governor Rauf Aregbesola of Osun State faulting the sweeping success story of the agric ministry especially on fertiliser distribution. He insisted that quite a number of farmers in the state do not have access to fertiliser. Similar criticism was made by First Bank Managing Director, Bisi Onasanya who cautioned stakeholders from deceiving the public with the impression that the anticipated miracle in the agricult sector had come. According to them, Nigerian farmers are still grappling with a chain of problems chiefs among which are poor financing and  infrastructural deficiencies, among others.

Embargo on SEC’s Budget
From all indications, the embargo placed on the budget of the Securities and Exchange Commission, SEC, as a punitive measure by the national assembly has failed to bring the commission to its knees. The controversial clampdown on the apex regulatory agency in the nation’s capital market manifested in the equally controversial budget for 2013 where the federal lawmakers refused to pass the financial document unless the Director-general of SEC, Aruma oteh was thrown out.

Of course, President Goodluck Jonathan did not bulge as far as the threat was concerned although efforts were made to make the national assembly to shift ground. Today, the commission is still carrying out its function despite the National Assembly’s high handedness and the question on people’s lips is where is SEC getting its financial support from?

If the explanation is that the commission has suddenly reinvented its revenue generation drive in view of the stalemate over its 2013 budget, then the lesson is that other government’s parastatals should learn from SEC’s experience and stop the ungodly dependence on handouts from the Federal  Government.
Private Refinery is Here
Finally, Nigeria is in the  process of  experiencing private sector participation in oil refinery  with the signing of a multi-billion dollar deal between Alhaji Dangote and a consortium of banks. The refinery would be the largest in Africa, turning Nigeria into a petroleum exporter.

For a country ranked as  Africa’s biggest oil producer, but which lacks refining capacity and has to import most of its fuel,the coming on board of the Dangote group is expected to encourage other investors to put their money in private refinery in Nigeria.  However, one hopes that the issue of oil subsidy which has severally been cited as a discouragement to prospective investors in refinery has been put into consideration.
The argument was that when crude oil are bought at international market price, it won’t be profitable to determine prices for the product under the present subsidy arrangement.

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