Years of mulling over the privatisation of the power sector dating back to the administration of Chief Olusegun Obasanjo formally ended on Friday with the Federal Government’s handover of the physical assets of extinct Power Holding Company of Nigeria (PHCN) to their new owners.
Speaking on the handover, Minister of Power, Professor Chinedu Nebo revealed that the Federal Government recorded a liability of up to N1 trillion in the sector, and as such, the “government has no business doing business.”
According to Nebo, the debt of the government and PHCN’s assets have now been transferred to the Nigeria Electricity Liability Management Company (NELMCO).
“Government has no business doing business,” he said. “Because government was doing business, NELMCO now has between N600bn to N1trillion debt that needs to be settled. So some of these assets you are thinking will be stripped will not be stripped; they have been submitted to NELMCO.”
He also revealed that the Nigeria Electricity Regulatory Commission (NERC) will soon announce rules for the interim operation of the firms prior to the activation of the Electricity Transition Market, although the new owners realise they have to stick with current electricity rules in the interim.
“For today’s event, we must hand over physically five generation companies and 10 distribution companies to the new owners,” Nebo said.
“The handover automatically gives the new owners authority to take over and manage the companies in line with already established rules and guidelines by the Bureau of Public Enterprises (BPE) and Nigerian Electricity Regulatory Commission (NERC).
“After the announcement and activation of the interim market rules by NERC, the regulator will very shortly announce to us what the interim rules for the market should be. Next is the declaration of the Electricity Transition Market by the minister and this will be made on advice by NERC.
“Once NERC says all the conditions have been met, NERC will advise the minister to declare the transition electricity market, post handover recovery in line with agreed business and investment plans of all the new owners, and then post handover monitoring by all relevant bodies: Federal Ministry of Power, BPE and NERC.”
Vice-President, Alhaji Namadi Sambo — represented by Minister of Trade, Olusegun Aganga — who supervised the handover of 11 power distribution and five generation companies created out of PHCN to the private owners assured that the involvement of the private sector would spur higher generation capacities through the provision of more cost-efficient power stations and improved electricity distribution in the areas of billings and collection, transmission networks.
“This handover is the culmination of 14 years of painstaking efforts by the National Council on Privatization (NCP), the Bureau of Public enterprises, the Federal Ministry of Power and other key stakeholders to reform and liberalise Nigeria’s electricity industry,” Sambo said.
“No government around the world has the capacity and resources to build the power sector that is sustainable for its citizen; this [knowledge] led to the reforms and privatisation programme, which would allow more Nigerians to have access to power while our industries would make their products more competitive because of adequate power supply.”
Chairman of West Gate Power and Gas — one of the new owners — Mr. Charles Momoh thanked the Federal Government for the move, describing it as a statement of confidence in the private sector worthy of emulation. Momoh assured that his company would invest in matrices, changing of the systems, transformers, staff training and ultimately maintain standards in the interest of consumers.
Reacting to the handover, Zonal Coordinator, North-East and Central Executive Council of PHCN, Mr Musa Ayiga advised disengaged PHCN workers to invest their severance allowances wisely and urged those who would be re-engaged by the new companies to work hard, as the business-as-usual era is over.
“Do not worry for losing the PHCN job,” he said in Gombe. “Just take it as an act of God and bear with the situation. Nothing will happen to you but you should know how to play your game.”
Electricity consumers across the country expressed the hope that the transfer would lead to improved electricity supply as well as billing for exact electricity consumption.
“I hope electricity supply would improve,” Tunde Oladeji, an Osun State-based teacher said. “Based on past experiences, I initially doubted the successful conclusion of the privatisation of the energy sector. Now that it has been done, I am looking forward to paying for the quantity and quality of power I consume.”
