From Fred Itua, Abuja
There are indications that the Senate may prevail on the Federal Government to reverse the privatisation of the power sector. This follows fresh facts that emerged on the floor of the Red Chamber of the legislature yesterday with regard to epileptic power supply across the country.
During a debate on a motion sponsored by Senator Dino Melaye, which revealed how the frustrations in the power sector is further sabotaging efforts at reviving the economy, senators concluded that the sector is in comatose and in dire need of an emergency response.
Senators also declared the distribution companies bankrupt and, therefore, called for the entire privatisation of the power sector to be revisited.
Contributing to debate on the matter, Senator Ben Murray-Bruce faulted the manner with which the privatisation was carried out and noted that operators in the power sector were in serious difficulties.
He blamed the administration of former president Goodluck Jonathan for the privatisation exercise which he alleged was not transparent. He recommended that the Senate should prevail on government to revisit the entire process.
“The problem we have with the power sector is that the generating and distribution companies were privatised a few years ago on the premise that they would charge cost reflective tariffs to make it profitable,” Bruce said.
He disclosed that those who privatised the sector did not imagine the naira would be devalued from N160 to N500 to the dollar.
“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 N1 trillion and they are not saying the federal government again. They say we owe them N1 trillion. This is a serious problem. There is no solution in sight. They don’t have the money to buy the meters. They are technically bankrupt. Unless we revisit the entire privatisation process and dissect what went wrong, we will still get estimated billing.
“We have a catastrophe on our hands; there will be no light in Nigeria unless the current structure is reviewed,” he said.
Senator Mustapha Burkar from Katsina State said Nigeria was sitting on emergency in the power sector and added that the value chain is now at its weakest point.
Mustapha, who is the vice chairman of the Senate committee on power, said: “The problem we have is inefficiency within the system, which we have 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.”
The law maker continued: “We’ve transmission loss of 228, 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.
“What is actually 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 is looked at, it will not work.
“If we have the capacity to generate 4,500 Megawatts, but can only get less than 4,000, that means more than 75 percent of the capacity is not ulltilised. It means we are sitting on an emergency, and something has to be done drastically to address the 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.”
Melaye had, in his motion, noted that years after the privatisation of the power sector, the Distribution Companies (DISCOs) handling the retailing and marketing of electricity in the Nigerian Electricity Supply Industry have not been able to effectively metro their customers, thereby, leaving millions of their customers at their mercy through estimated billings.
He lamented that DlSCOs prefer to hound consumers with law-dropping estimated bills by devising means and ways of smartly retrieving meters from customers in order to realise targeted profit margin through the imposition of arbitrary billing system, usually referred to as “crazy bills” by customers.
Melaye said available and affordable electricity is supposed to be a right and not a privilege as section 24 (2)(b) of the 1999 Constitution of the Federal Republic of Nigeria as amended stipulates that “the security and welfare of the people shall be the primary purpose of government.”
No position was, however, taken by the Senate. Instead, it suspended further work on the motion and urged its committee on power to submit a pending report on the state of power generation in the country.