Senate, Reps disagree over full privatization of power sector

NASS postpones resumption by one week
United Bank for Africa

On whether or not to fully privatise the power sector, which has remained in the front burner of public discussion in the industry recently, the Senate and House of Representatives seem to have pitched their tents on opposite directions.

NEWSVERGE reports that the Chairman of Dangote Group, Aliko Dangote, had earlier this month said that operators of electricity the Distribution Companies (DisCos), have failed at providing adequate electricity to Nigerians as promised during privatisation, calling on the federal government to de-privatise the sector.

As a result of Dangote’s request, the various operators in the power sector, have at various times, kicked against de-privatisation being a solution to power problem in the country.

Last week, the Chairman Senate Committee on privatization, Senator Ben Murray Bruce, warned against calls for the reversal of the power privatization in the country.

According to Bruce, instead of de-privatisation, concerted efforts should be made by all stakeholders to address the crisis in the sector.

He said reversing the power privatization would paint Nigeria as an unserious country which does not respect the sanctity of contractual agreements, thus scaring away potential investors.

However at a sitting on Thursday, the House of Representatives called for full privatisation of the sector.

To this end, the House stressed the need to remove the middleman role played by Nigerian Bulk Electricity Trading (NBET) company, which was set up to engage in the purchase and resale of electric power and ancillary services from independent power producers and from the successor generation companies.

The resolution was passed following the adoption of the motion tilted: ‘Need to avert imminent total blackout in Nigeria,’ sponsored by Abiodun Adeogun (APC-Osun), who expressed concern over the N400 billion owed gas manufacturers, power generation and distribution companies (GENCOs and DISCOs) respectively.

The law makers, also emphaised the need to enhance the responsibility of Nigerian Electricity Regulatory Commission (NERC) for effective service delivery in the country.

Adeogun observed that the imminent threat of blackout is due to the huge debts owed power generation and distribution companies by the Armed Forces, government ministries, departments and agencies, may lead to distortion of production, generation and distribution corridors.

According to him, the umbrella Association of gas producers (Nigeria Gas Association) had during its 10th International Conference and exhibition held between 31st to 4th October 2016, warned of the likelihood of blackout in Nigeria before the end of 31st December 2016 for “non-payment for gas supplied for power generation and that it may attenuate their will to continue to supply gas for power.

“If the debts owed gas producers, GENCOs and DISCOs are not paid, most of the power generation cannot go beyond 2016.

“The House is also concerned that the inability of the DISCOs to pay NBET which is the bulk purchase of energy generated has hampered the ability to pay the GENCOs and who in turn is unable to pay manufacturers.

“The House is worried that blackout in Nigeria will further cripple the economy, worsen the security situation particularly in the North-East and lead to closure of all energy propelled sectors,” Adeogun noted.

To this end, the House mandated its Committee on Power to promptly interface with gas producers, GENCOs, NBET and DISCOs with a view to find out the dislocation on the gas to power attributed to debt profile of the stakeholders in the energy sector.