Privatisation of power sector not working, Senate wants review; PENGASSAN lauds FG on refineries
The Senate also narrowed the problems inherent in the power sector to bankruptcy by benefiting companies in generation (GENCOs) and distribution (DISCOs) as a result of skyrocketed foreign exchange rates, urging the government to take emergency measures to save electricity consumers the final burden of bearing the huge costs through arbitrary and crazy billings.
Senate made these submissions on Wednesday during debate on a motion sponsored by Senator Dino Melaye (APC, Kogi).
During the debate, Senator Ben Murray-Bruce (PDP, Bayelsa) decried the manner in which the privatisation was carried out, saying it was not transparent. He urged the Senate to prevail on government to revisit the privatisation, a position that resonated with many senators.
He argued that those who privatised the sector did not imagine the naira will be devalued from N160 to N500 to the dollar.
He said: “those who invested in the business thought it was like a company where they will make a lot of money. I believe they only had enough money to pay the federal government and make the initial investment; they did not have the capacity to run a power sector company in a modern economy.
“Now, they brought a bill of N1trilion they are not saying the federal government again. They say we owe them a trillion naira. This is a serious problem. The way the privatisation process took place, the difficulties we have.
“There is no solution in sight. They don’t have the money to buy the meters. They are technically bankrupt. Unless we visit the entire privitastion process. Unless we understand and dissect what went wrong, we will still get estimated billing.”
“We have a catastrophe in our hands, there will be no light in Nigeria under the current structure is reviewed. No hope in sight, unless we revisit the process and try to understand what went wrong and bring in new players with the capacity, the people in place now.”
Senator Mustapha Burkar (APC, Katsina), said Nigeria was in dire need of an emergency in the power sector since measures that had been adopted were not working.
Mustapha, who is the vice chairman of the Senate committee on power, said: “The problem we have is the inefficiency within the system which we have actually so far not decided to address. I will give you a small example: Nigeria has an installed capacity of 12,522 Megawatts of power. We have non-available capacity of 5,300. We have non-operational capacity of 3,180; meaning that the amount that is actually available is just over 4,000 Megawatts out of 12,500.”
“We have transmission loss of 228, we have distribution loss of 447 Megawatts. At the end of the day, only 3,800 Megawatts reaches the consumer. And we have commercial loss of more than 36 percent.
“So, what is actually being paid for out of the over 3,000 Megawatts is only 1,800 Megawatts. So unless and until we decide to look at these inefficiency within the value chain there is no way we can have better electricity generation, distribution and also billing system in the country. So, I agree that the model they have used for privatisation has not worked. And unless and until this inefficiency looked at, it will not work.
“If we have capacity to generate 4,500 Megawatts but we can only get less than 4,000 that is more than 75 percent of the capacity is not ulltilised. It means that we are sitting on an emergency something has to be done drastically to address this problem. The value chain is weakest at the Discos because they are the ones who collect the money. And you never know how much money is being collected because they have failed to install the metres that are needed. We need millions of metres.”
In another development, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), has commended the Federal Government for its effort to ensure that the four refineries in the country function at optimal capacity.
The President of the association, Mr Francis Olabode, made the commendation on Wednesday in Yola while addressing the 5th PENGASSAN Kaduna Zonal Terminal Delegates Conference.
“As stakeholders, we support the efforts of the government to ensure that the four state owned refineries work at optimal capacity.
“We also welcome government’s invitation to investors into these refineries.
“We call on the government to carry our association along in its efforts to bring back the refineries on stream.”
Olabode also lauded the efforts of the government to end insurgency in the North- East and curb criminal activities in other parts of the country.
He urged Nigerians to support and cooperate with the government in its efforts to ensure that peace and security prevail in Nigeria.
“Let me reiterate that security is a job for all Nigerians; we need to provide intelligence report on suspected movements or activities to security the agencies.
“On its part, the security agencies should endeavour to mop up fire arms and ammunition in the hands of hoodlums and other miscreants,” Olabode said.