FG admits flaws in power sector privatisation

Power transmission grid05 May 2014, Abuja – The Federal Government, yesterday, admitted that the privatisation exercise of the Nigerian power sector was flawed and that it had set up a committee to address the challenges and drawbacks recorded in the exercise.

According to a statement by the Bureau of Public Enterprises, BPE, the committee, called Power Investors’ Committee, will be chaired by the Vice President and Chairman of the National Council on Privatisation, NCP, Namadi Sambo.

Director-General of BPE, Mr. Benjamin Dikki, disclosed this in the statement after an interactive session with members of the House Committee on Privatisation and Commercialisation, the new owners of Power Holding Company of Nigeria, PHCN, successor companies and the BPE during the committee’s oversight visit to some electricity distribution companies across the country.

He said the committee would meet quarterly to review issues and take critical decisions on the power sector.
Dikki, who was represented at the forum by Alhaji Aliyu Maigari, Head, Stakeholders Relations Unit, BPE, said the membership was drawn from the Nigerian Electricity Regulatory Commission, NERC; Nigerian Bulk Electricity Trading Company, NBET; Ministry of Power; Nigerian Gas Company, NGC; BPE and other relevant stakeholders.

DISCOs’ challenges
Also speaking, Mr. John Darlington, Deputy Managing Director, Ibadan Electricity Distribution Company, IEDC, decried the frequent picketing of the company’s premises by former staff of the defunct PHCN.
He called for urgent steps to be taken to check the frequent picketing, saying that it portends grave danger for investors in the power sector.

While noting that the IEDC is the biggest distribution company in the country with 1,073,673 customers, he called on the government to take steps to make the generation and distribution power companies to be financially viable to enable them undertake aggressive investments in power infrastructure.

Darlington said financial viability of the power companies can be achieved through a cost reflective tariff structure that recognises current market situation as well as undertake sustainable investment in the transmission network to deliver generated capacity to distribution companies without constraints.

He also called for vigilance by the distribution companies and the relevant authorities to combat vandalism and electricity theft which rob legitimate customers of power and revenues that will help sustain the market.
Darlington further called for the mediation by the government to delineate asset boundaries between the Transmission Company of Nigeria, TCN, and distribution companies for effective network operation.

He also called for the review of the classification of the core/non core assets of the distribution companies as some of the assets classified as non core assets were essential to the operations of distribution network expansion.

expansion drive
Also, Mr. Oladele Amoda, Managing Director, Eko Electricity Distribution Company, EKEDC, said the company had secured $150 million to expand and improve its network.
He explained that the company planned to invest N42 billion in the next five years for network improvement to reduce aggregate technical, commercial and collection, ATC&C, losses and enhance service delivery.

He noted that as part of its digitalisation programme, customers of the company could pay their bills online and through banks in any part of the country, a feat, he said only the company had been able to achieve.
Amoda called on TCN to address the severe power evacuation capacity limitations in the transmission stations for EKEDC to improve power supply to its customers.

He added that the company was ready to assist in funding of some of the transmission projects that would remove interface bottlenecks.

House c’tte chair’s comments
In her remarks, Khadija Abba Ibrahim, the Chairman of House Committee on Privatisation and Commercialisation, which has been on oversight visit of the defunct PHCN successor companies in the Lagos and Ibadan axis, said the purpose of the visit was to assess the performance of the companies in line with Post Acquisition Plan, PAP, they signed with the government.

She said the committee would pursue laws that would guarantee effective performance of the companies for the benefit of Nigerians.
Abba Ibrahim further urged the Legal Units of the new power companies to collaborate with the two committees of the National Assembly to enact laws to remove inhibitions for their effective performance.



– Vanguard



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