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Tuesday 21 November 2017
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DISCOs panic over fear of power sale reversal

Nigeria Election

 

By Olanrewaju Oyedeji

 

Panic is currently gripping the ranks of distribution companies, DISCOs, operating in Nigeria’s power sector, over the renewed call on the federal government to reverse the sale of the firms they had bought a few years ago.

Even more disturbing for them is the fact that some of such calls are now being accentuated by comments being made by offiicials of government.

One such comment was by the Minister of Power, Works and Housing, Babatunde Raji Fashola who on Tuesday  assented to the long held view that the power sector was illegally privatised.

On their part, labour leaders are demanding for the cancellation of the sale and reversal of 45 percent increase in tariff effected in February.

And in a significant note of departure, Fashola is saying that though the deal was fraudulent in his view, the fact that it had already come into force had already introduced fresh legal issues that might make it impossible to reverse the sale.

Speaking at a Senate public hearing on the electricity tariff Tuesday, the minister said government’s interests were illegitimately sold to some private businesses.

“As a minister, I inherited a power sector where government’s interests have been illegally sold and, therefore, I don’t control how power is distributed.”

On the electricity tariff increase, the minister said that the tariff could not be reversed.

“The DISCOS made it very clear to us that if we did not give them the market reflective tariff it means that government would have to carry the continuing cost that accumulated in the region of about a trillion naira.

“The tariff was increased in 2015 and then reversed because of the electoral significance. But the debts that they created were not reversed and they continued to accrue into this administration.

“We are not insensitive to Nigerians, owing to their challenges. We were looking for the best way to solve what has become an over 60-year problem, since 1950, when TCN was first created. I guess tariffs may initially look excessive but when we count and measure the down times and how much time is lost when there is no sustainable electricity and measure them against the expectation of sustained electricity overtime, perhaps it would seem cheaper.”

Fashola, who admitted that power supply in the country had not significantly improved, said confidence had been restored in the sector.

“Yes, service hasn’t improved but confidence has come into the system. Like you have the Nigerian Communication Commission (NCC) in the telecommunication industry, NERC is for us in the power sector.” In his remarks, Anthony Akah, the acting chairman of NERC, said it was not possible to reverse the tariff.

“The review of the tariff is possible but its reversal is not,” he said.

“The tariff was essential and meant to trigger the necessary investment in the sector. The hike in the tariff was not different from what is happening in other sectors of the economy,” he added.

In his submission, the General Secretary of the National Union of Electricity Employees (NUEE), Comrade Joe Ajaero, said that the privatisation of the power sector was not properly done and must, therefore be reversed.

Also speaking, the representatives of the Trade Union Congress (TUC), Chris Okonkwo, said that the power sector was better off before its privatisation.

He said that the investors in the power sector lacked the technical expertise and finance to turn around the sector.

He said: “Consumers are bearing the brunt of the inefficiencies of the investors. We, at the TUC, are of the opinion that tariff increase was not the solution to the problems of the power sector.”

Among other high profile calls for the reversal of the sale of the Discos, former Vice President Atiku Abubakar had in April last year advised then president-elect Muhammad Buhari (Rtd) to reverse the privatisation exercise of the power sector.

Atiku spoke at the 36th Kaduna International Trade Fair’s Seminar organised by the Kaduna Chamber of Commerce, Mines and Agriculture (KADCCIMA). He said the Obasanjo-led administration sunk billions of dollars into the sector, but failed to address the problem of the power sector.

Worried by the expanding clamour and the relative helplessness of the nation in the face of the problems, the Senate had in February asked NERC to halt the 45 percent increment, following the outcry that trailed it.

The Senate Leader, Ali Ndume (APC-Borno South), recently called for the revisiting of the privatisation process and its possible revocation.

Speaking with reporters Ndume said the Nigeria Electricity Regulatory Commission had no reason to increase the tariff.

The senator said the companies bought the nation’s electricity infrastructure for almost nothing and rather than investing in them, were calling for hike in tariff.

He said: “These people took over these companies for peanuts and they have not invested. I have not seen how they will just come and be charging people indiscriminately like that.

“This is not a competitive market where you say the market forces determine the price. They just want to take advantage of Nigerians. I am against that completely. In fact, I am against the privatisation completely.”

 

 

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