Tope Adesipo: “Babatunde Fashola Must Reverse Privatization Of The Power Sector”

Much excitement has greeted the announcement of Mr. Babatunde Raji Fashola as the minister of Power,works and housing. Fashola who is a former governor of Lagos,has earned a reputation for being a performer from his time as Governor of that state.whether rightly or wrongly, I dobt doubt his competence but the truth is I’m not one of Fashola’s fans. i don’t usually agree with him I’m one of those who thinks there is so much hype around his works in Lagos which are in sharp contrast with the reality of the state and the average Lagosians. nonetheless, i badly want him to succeed in his new role. Nigeria can not afford not to get electricity right once more. it has been the bane of our development.electricity is central to the development of any Nation and Nigerians, almost six decades after independence still live in perpetual darkness while millions are not even connected at all.
Two years after the privatization of the power sector, Nigerians still depend on  generators for their power needs. so much cheer and excitement came with the privatization in 2013, all that optimism are now starting to is no news that electricity supply has failed to improve since the power sector was privatized. The former Government of Jonathan blamed vandals and insufficient gas to power but that was a spurious excuse. the truth is the cronies they handed over power distribution and generation to are clueless.  The private cronies have shown an obvious lack in capital base, technical knowledge, history/experience and the will to turn around the sector. Virtually all the private companies that bought the power sector borrowed a large chunk of money used in acquiring Power Holding Company of Nigeria (PHCN) subsidiaries in what is seen as one of the biggest scam perpetuated in Nigeria. These sharks first hurriedly registered companies for the purpose of bidding for the distorted and balkanized power sector, got some international energy company to agree as their technical partners and secured loans from the banks.despite the obvious degenerating power supply, the Nigerian electricity regulatory commission (NERC) has continued to increase tariffs.
The history of Nigeria’s electricity crisis itself reflects the history of failure of Leadership in Nigeria. In spite of the enormous wealth that accrued to the country since independence, the country’s electricity supply has not left its colonial height. No new power plant was built by successive administrations (both military and civilian) between 1980 and 2005. Yet several billions of dollars were committed to the power sector in this period. In 2005 when the Obasanjo regime tried to build some new power plants, it was clear that it was to become another conduit pipe for massive looting of public wealth. While over $10 billion was committed to building new power plants, less than 700 MW of electricity have been added to the national grid. The failure and then virtual collapse of NEPA/PHCN allowed the government to claim that nationalisation was the obstacle to providing electricity and that privatization was the answer. while that may be true,it was not only about nationalisation, NEPA failed because it was looted from within and from without. Outside contractors made millions from contracts which often were never implemented while elements within NEPA looted it for themselves. But despite many promises privatization has not improved supply but it has quickly brought price hikes.
The power sector is one sector that is heavily capital intensive and requires planned coordination and synergy amongst the different component (generation, transmission and distribution) of the power sector. According to the International Energy Association (IEA) around $6.1 billion (about N1 trillion) is needed in investment annually for the next ten years to provide electricity for all Nigeria. when you look at how much the investors have invested it is peanuts compare to how much is needed yearly to provide universal access to electricity for all Nigerians. how do you describe a situation where government sustained expenditure in the sector is more than what was pre privatization. The private companies at a time, were finding it difficult to maintain the staffs they met on ground  While generating companies (Gencos) also found it difficult to pay for gas to power the plants and replace obsolete parts of plants at some point.
The stark improvement that we saw shortly after Buhari came in, was as a result of the fear of reversal of the privatization. Now it is becoming clearer to them that Buhari government may not reverse the privatization program which the investors feared Buhari may undertake initially. it is now clear to them that the president is going to continue with it and they have gone back to their old ways. In the past two years of privatization, Nigerians have had to pay stupendous amount of money to the DISCOS in form of fixed charge of N750 by over 25 million households and a regime of crazy/estimated bills that could be as high as N20, 000 monthly for residential consumers. It is clear that with the power privatization, the government handed us over for exploitation and super profit drive of the DISCO’s and GENCOs’ who have no capacity to generate and distribute stable electricity to Nigerians at an affordable price. Why are we using estimated billing? where are the prepaid meters they promised will be supplied?
To solve Nigeria’s electricity problems the new minister must reverse the privatization program for starters . what happened is not privatization it is cronyism. going forward, we must also begin to look at sustainable form of energy generation. the NIPP projects seems to be contributing more power than the legacy Power Holding Company of Nigeria (PHCN) power plants to the national grid today. While the NIPP projects are under the government, the legacy PHCN power plants are the ones that have been sold to the private generation companies (genco’s).
Tope Adesipo
Abeokuta, Ogun State.
Views expressed are solely that of author and does not represent views of nor its associates

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