Senate committee to investigate the trillions spent on electricity by the FG

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The senate has showed a great interest in the electricity sector in Nigeria. Ahmad Lawan The president of the Senate expressed his displeasure over the power condition faced in the country. He said

“Our committee needs to investigate the trillions spent in the power sector. That is a lot of money. Try and find out what has happened so far. Government needs to look at this whole thing. Maybe government is not doing its own part. We need to find out. There is lack of capital. We feel very bad. There is no electricity and the country is suffering.”

As a result, the lawmakers seeks for a reversal of the privatization of the power sector if fails to deliver.

The Senate also asked the Federal Government to halt it’s planned increase in electricity tariff scheduled to take effect from July 1, 2020 so as not to add to the burden already faced by Nigerians during the COVID-19 pandemic

Lawan, who presided over yesterday’s plenary session said: “We gave power to them (power generation and distribution companies) and they still come to the public to ask for funds. I think it’s time for Nigeria to consider reversing the privatisation of the power sector or they should just cancel the entire privatisation process completely. If we leave it, we may not have power for another ten years”.

“We expected efficiency and something better. The distribution companies have no capacity to supply us power. We shouldn’t continue to give them money. They’re private businesses. We need to review this whole thing. Something is wrong.”

The Guardian reports that the Senate also mandated its committee on power to investigate all Federal Government’s interventions in the power sector since the privatization to date with a view to ascertaining the adequacy of such interventions and their desired impact, and to report back within four weeks.

The committee was charged 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. The Central Bank of

Nigeria (CBN) was urged to allow operators in the power sector access to foreign exchange for the procurement of equipment and materials as it is done in the aviation and oil industries.

The upper legislative chamber urged the Federal Government to consider additional tariff support to cushion the effect of rate shock over a fixed period to allow time required for the Transmission Company of Nigeria (TCN) and the distribution companies to access funds to implement performance improvement investments that will benefit customers especially during the pandemic.

The lawmakers commended the Federal Government “for the proactive initiative to establish the N1.7trillion COVID-19 Crisis Intervention Fund to cater for issues that are critical to the effective management of the pandemic and to stimulate a gradual return to

normal socio-economic activities in the country.”

They urged the Federal Government through the Federal Ministry of Finance to include the power sector in the disbursement of the proposed N500billion COVlD-19 Crisis Intervention Fund in order to ameliorate the financial hazards and operational challenges such as the enumeration of metering of actual consumers and other recent problems caused by the pandemic.

Suswam in his motion said it was alarming that the COVID -19 pandemic had further impacted negatively on the NESI as the Discos reported 50 per cent loss of average monthly revenue collection for the months of March and April.

“If the negative impact of COVID-19 on NESI continues without any emergency financial intervention from the Federal Government, DisCos already facing dwindling revenues in the wake of the pandemic may not be able to meet their remittance obligations to the m

arket as set by the Nigerian Electricity Regulatory Commission (NERC) in December, 2019 Tariff Order. This will also affect the financial obligations of the TCN which is expected to have a cost reflective tariff change of N3.7/kWh to N8.3/kWh by 1st July, 2020,” he declared.

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