There are strong indications that the 8th Senate may review privatization of power sector that was conducted three years ago.
The Chairman, Senate Committee on Privatization, Senator Ben Murray-Bruce, gave the hint while expressing concerns why there has not been significant improvement in power sector performance three years after privatization.
Addressing stakeholders during a visit to the management of Eko Distribution Company, Senator Murray-Bruce stated that “there is problem in Nigeria power sector. People are questioning the privatization of the power sector, they said it was badly put together. We are going about these (privatized) companies to identify if they are badly put together; to identify their challenges and to find out why some companies are doing well while others are not.”
He argued that Nigeria was generating 3000MW before privatization while the same 3000MW is currently being generated.
“It is surprising that we are generating same power output as before, yet the power firms are being owed N900billion. The management of Egbin said it is being paid 16 per cent of what it sold. We need to understand what the problem really is. Should we cancel privatization of the sector? This is because they are private companies and they must make profit without any regulatory hiccups.
“We need to explain to the Senate our findings and what exactly privatization means to Nigerians. We need practical solutions to these problems which we can sell to the Senate for approval,” he said.
In his remarks, the Chairman of Eko Distribution Company, Mr. Charles Momoh, stated that “we need legislation that will allow the discos to carry out their functions effectively. I want to appeal to the Senate to assist the discos in achieving their set goals towards the privatization process.
“The Purchase Agreement was faulty from day one. Federal Government promised discos 5700MW on daily basis but it was wrong assumption because we never achieved that. In other countries, loans and grants were given to private sector and we urged the Senate to work towards it in order to drive the private sector initiatives.”
The Managing Director of Eko Distribution Company, Engr. Oladele Amoda, posited that “although his company received N4.8billion from the Central Bank of Nigeria (CBN), it is not enough to meet the needed capital expenditure of the company.”
He explained further that the facility from CBN was a loan which attracts 10 per cent per annum but not a grant as wrongly reported by some media outfits.
It would be recalled that the Federal Government privatized the power sector on the 1st November, 2013, with the hope that Nigeria will record significant improvement in the sector in the short term.
Many discos have blamed the inefficiency in the sector on non-reflective power tariffs, commercial losses as a result non payment of debt by government agencies and Nigerians.
