Lawan seeks reversal of power sector privatisation

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By Sanni Onogu, Abuja


SENATE President Ahmad Lawan on Tuesday called on the Federal Government to review or reverse the privatisation of the nation’s power sector.

He warned that, if the sector was left in the hands of the Generating Companies (GenCos) and the Distribution Companies(DisCos) in the next 10 years, Nigeria should forget about electricity.

Lawan made the call while contributing to a motion on the “Power Sector Recovery Plan and the Impact of COVID-19 Pandemic.”

Immediately after the debate on the motion sponsored by Senator Gabriel Suswam, the Senate called on the Federal Government to suspend the planned electricity tariff increase scheduled to take effect July, 2020.

It also mandated its Committee on Power to investigate all Federal Government interventions in the power sector since the privatisation of the sector.

Lawan, in hs contribution to the debate, said: “We gave them our common patrimony and they still come back as DisCos and GenCos to look for money from the public.

“The time has come to review and probably reverse this privatisation, if we leave them for the next 10 years there would be no power in Nigeria.

“Like I said before this motion was taken, the privatisation has so far not been successful.

“We expected efficiency and effectiveness in power supplies but probably on both sides, maybe the purchase agreements were not adhered to on both sides.

“What is obvious is that the DisCos particularly have no capacity at the moment to supply us power.

“The GenCos have challenges too. It is not good that we give them money for what we sold to them. These are businesses.

“If there are areas we must intervene as a government, it must be seriously justified.

“The way it is, I think there is need to review this privatisation to see what has happened. Something is certainly not right.

“In the event that this thing does not work properly, there will be need for the government to look into it.”

Senator Suswam had, in his lead debate, said that the Senate was aware that at the outbreak of COVID-19 , “the Federal Government, through the Federal Ministry of Finance, intimated the leadership of the National Assembly of plans to establish a N1.7 trillion COVID-19 crisis intervention fund to be utilised to upgrade healthcare facilities across the country, stimulate agriculture, solid materials, power sector and also execute social intervention programmes that will benefit the masses.”

He noted that while the appropriate Executive bill that would articulate the actual use of the fund is yet to be presented to the Senate for consideration, “the devastating impact of the pandemic on the power sector has made the Senate to draw the attention of the Federal Government to the need to include the sector in the disbursement of the proposed fund.”

Suswam, a former Benue State governor, said that this was in view of “the vital role of stable electricity supply to current efforts towards jumpstarting the economy which is till groaning under the impact of the pandemic.”

He added: “Stable and uninterrupted power supply is also a critical factor in the management of COVID-19 patients as well as in the implementation of the proposed upgrade of healthcare facilities across the country after the pandemic.

“Aware that prior to the outbreak of the COVID-19 pandemic, the Nigerian Electricity Supply Industry (NESI) was already facing teething operational constraints including the absence of cost-reflective tariffs, inadequate enumeration and metering of consumers, limited access to funds for investment, poor revenue generation and high levels of aggregate technical, commercial and collection (ATC&C) losses.

“Generation Companies (GenCos) were owed 72 per cent of their revenue in 2019 while the Distribution Electricity Companies (DisCos) reported average ATC&C losses of about 41 per cent in the same year.

“All these constraints prevented NESI from performing optimally across the power value chain.

“Alarmed that the COVID-19 pandemic has further impacted negatively on NESI as the DisCos reported a 50% loss of their average monthly revenue collection for the months of March and April 2020 respectively even as the Federal Government continues to harp on the need for a stable electricity supply.”

Other senators that contributed to the debate were Francis Fadahunsi, Abubakar Kyari, Aliyu Sabi Abdullahi and Uche Ekwunife.

Fadahunsi, who lamented that even though the Federal Government spent huge sums of money between 2006 till date, total power generation has not exceeded 6,000 Megawatts .

“I am not comfortable with the term cost effective tariff when no one has been able to say how much is spent in producing a Megawatt so as to determine how much to charge. Everything is based on assumptions and something must be done about it,”Kyari said.

While Abdullahi claimed that “ data being used to take decisions in the sector are incorrect,”

Ekwunife noted that “there is no difference between NEPA and DisCos as power is hardly available in the rural areas.”

After the contributions, the Senate resolved to “commend the Federal Government for the initiative to establish the N1.7 trillion COVID-19 Crisis Intervention Fund to cater for issues that are critical to effective management of the pandemic and to stimulate gradual return to normal socio-economic activities in the country.

It urged the Federal Government to include the Nigerian Electric Power Sector in the disbursement of the proposed N500 billion COVID-19 Crisis Intervention Fund.

The Senate said: “This is in order to ameliorate the financial hazards and operational challenges such as the enumeration of metering of actual consumers and recent problem arising from the pandemic.

“The Federal Government is advised to suspend the planned tariff increase which is scheduled to take effect from 1st of July, 2020 bearing in mind the increased hardship resulting from the COVID-19 Pandemic.

“We mandate the Committee on Power to investigate all Federal Government interventions in the power sector since the privatization of the sector to date with a view to ascertaining the adequacy of such interventions and other desired impact, and to report back within four weeks.

“The Senate Committee on Power is to investigate all market participants in the power value chain and ascertain the level of corporate governance compliance in the Nigerian Electricity Supply Industry (NESI) and to report back within four weeks.

“We urge the Central Bank of Nigeria to allow operators in the power sector access to foreign exchange for procurement and materials like what is done in the aviation and oil industry.

“We also call on the Federal Government to consider additional tariff support to cushion the effect of rate shock over a fixed period to allow time required for TCN (Transmission Company of Nigeria) and DisCos to access funds and implement performance improvements investments that will support increased tariffs to certain classes of customers especially during the pandemic.”





Culled from The Nation



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