Power Sector Reform: Stakeholders Frown at Injection of N3trn

Paschal Emeka, Abuja

Stakeholders and organized Labour have frowned at an injection of another N3 trillion by the Federal Government into the privatized electricity companies owned by individuals, without a commensurate increase in power generation over the past 10 years.

Stakeholders made their decision known during a public hearing on a bill to amend the Electric Power Sector Reform Act, 2005 to provide the legal and institutional framework for the implementation and coordination of Rural Electrification projects, the establishment of the National Power Training Institute, and Regulatory provisions to strengthen the sector for efficient services delivery and related matters’, organized by the House of Representatives Committee on Power held at National Assembly Complex in Abuja.

Speaking during the event, the Chairman House of Representatives Committee on Power Hon. Aliyu Magaji disagreed with stakeholders against states agitating for power generation and distribution.

He noted that as lawmakers they are in a position to make sure whether or not the action of the Nigerian Governors Forum, NGF is in consonance with the law and constitutional framework.

“They think and feel that there is a constitutional provision that gives them the right to form a regulatory agency,” he explained.

According to the Chairman, “NGF also wants each state to generate and distribute power across the state of the federation”.

Reacting to another question on what his Committee intends to do with the recommendations from NGF, the chairman said, “as a committee, we have received their documents, we shall look at it thoroughly and decide the next steps to take.

He also reacted to power generation and distribution in Lagos State, promising to critically cross-check all the facts as well as the constitutional requirement on the matter to establish whether or not they are right or wrong.

“Our intention as a committee is not to go after anybody but to break the monopoly, adding that the Constitution of the Federal Republic of Nigeria is very clear on power generation and control,” he said.

Consequently, the chairman also used the opportunity to advise Nigerians to be patient with him and his Committee assuring that they are determined to do the needful on power sector Reform in the country for the betterment of all.

Also speaking on the matter, was a General Secretary/CEO
National Union of Electricity Employees, Comrade Joe Ajaero, disclosed that their position on privatization is clear, expressing worries about the proposed amendments, which he observed are critical, based on market forces whether private or public.

He explained that having tried privatization for ten years, we are doing just the amendment of sections of the act and even the review provision in the act which gives provision for the review of the sector after five years and we have written consistently and it has not happened.

“This act, are we obeying it?” If there is provision for review after five years, and Nigerians are groaning, consistently Nigerians are complaining and we say privatization was based on the fact that government doesn’t have any business in it and government is pumping in money to individuals’ business.”

The labor leader further stated that almost three trillion nairas have been pumped into the power sector which wasn’t there when it was owned by the government even as he emphasized that Government has no business in business.

“That is why we came here to say the laws we made by ourselves, we can pause and look at it and move on. Since nobody has to talk about the reversion of privatization, let’s see how it can fit us.”

As we are speaking today, the issue of tariffs is on, if the government is pumping in trillions and Nigerians are being compelled to pay, you can see what is happening, the country is suffering.

If you put N3 trillion in the economy of Nigeria today it will thrive, but it is being pumped into a business owned by individuals. Let’s look at it. What is the cost-benefit analysis of this if we have to take our money, and go and check the records, for about ten years before privatization, the government didn’t put ten percent of that money into the sector but it’s putting it now?

For another ten years no increase in generation, no conscious master plan, and there is no plan in the country that by next year power plant will come into the system. None for the next two years, nor three years for power generation to be constant, at 4,000 megawatts, and demand will continue to increase because more houses will be built, connect on and on.

So, if this is reduced to the public hearing and no action is taken further on how to make the system work, Nigeria is still at the bottom of countries suffering power poverty all over the world.

The normal concept is one million people to one thousand Megawatts, and we have a country of 200 million people with four to five thousand megawatts, but nobody is talking about it.

During the Babangida era, there was a feasibility study on Mambila which had the capability of giving what we are having in this country today and from that period till now nothing has happened. The same thing with Zungeru.

The union doesn’t want to bask in the euphoria of the act/law which does not provide one megawatt to the system. The union doesn’t want to bask in the euphoria of having 19 companies, 19 MDs, and EDs on 4,000 megawatts.

The company that was owned by one ED before will now multiply. The multiplication of 19 successor companies did not add one megawatt. So, what’s the honest sense of sweeping in 200 companies knowing the generation is constant?

Looking at the issue of privatization and the reform act after about 17 years and the issue of NERC and the need to have a board that will be representatives of the people where the people will make input.

The Chairman cannot wake up one morning and increase the tariff without knowing the impact it will have on the people without the workers or the masses representative telling him before the tariff is increased that if you do this, it will affect the masses and create inflammation. And one of the bases at which the tariff is increased is inflation.

So, by the time tariff is increased which creates inflation and you benefit from it, it becomes a vicious circle or a merry-go-round.

He maintained that “there has not been meaningful improvement or contribution by the current investors nine years after privatization and 17 years after the Electric Power Sector Reform Act, 2005 was signed into law.”

While stressing the need to review the entire privatization exercise, the NUEE scribe said: “Our position on privatization is clear, but we are worried whether the amendments are critically based on the market private public where we belong now.

“As we speak now, almost N3 trillion has been pumped into the power sector which wasn’t there when it was owned by the government. So what’s the logic to saying Government has no business in business and the government now has to pump and fund the business of another man? And we need to sit down and see what is working for us.

“That is why we came here to say the laws we made by ourselves, we can pause and look at it and move on. Since nobody has to talk about the reversion of privatization, let’s see how it can fit us.”

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