As Namadi Sambo, the Vice President and Chairman, National Council on Privatization (NCP), began Thursday, to formally hand over the physical assets of all 14 PHCN successor-companies to their new owners, it certainly is no comforting news that the winners of the first wave of the privatization of power plants and transmission lines are threatening to challenge the entire process. With the raging controversy over reductions in the amount Nigerians will pay for the electricity generated by the stations, it is obvious that the exercise has been so thoroughly compromised by officials in the relevant agencies, through a regime of monumental corruption which further reinforces the unedifying record of privatization in the power sector that has become a uniquely Nigerian disgrace.
The grouse is that although the last 75% of sums outstanding for the purchase of power stations was paid to the government in September, the Nigerian Electricity Regulatory Commission and the Bureau of Public Enterprises (BPE) recently sent a document entitled “Interim Arrangement” to the five winners. The document provided that, the profitability projections the companies made before they bid for the five plants in early 2013 were now pretty well worthless. Little surprise the document has provoked controversy and anger with the winners accusing the Nigerian government of bad faith; warning of dire consequences with regards to their legal options. Honestly, the government should not precipitate that eventuality through such clearly tendentious back-pedaling on agreements on electricity price compacts which it freely signed with the new owners; some of who are barons of the regime, while others are no strangers to the corridors of power.
The affected generation companies are: Shiroro (600 MW) now controlled by the North South Power Co Ltd backed by former president Ibrahim Babangida; Ughelli (972 MW) won by Transcorp Ughelli Power Plc. owned by Tony Elumelu; Geregu (414 MW) to be operated by BSG Resources and China’s State Grid Corporation, in association with Amperion Power Distribution; allegedly a subsidiary of Forte Oil Plc. whose leading stakeholder is Zenon chairman, Femi Otedola. Also affected is Kainji, with the Kainji and Jebba dams (nominal capacity of 1,300 MW) won by a consortium comprising Mainstream Energy Solutions headed by former colonel Mohammed Sani Bello and Tunde Afolabi (Amni Petroleum) as well as Rtd General and PDP senator, Tunde Ogbeha. The BPE said the Sapele Generation Company (1,000 MW) would not be involved in the hand-over exercise since the NCP has directed its legal committee to undertake a comprehensive legal review of its status following the failure of the preferred bidders – CMEC and Eurafric Energy (owned by Anthony Onoh) and Igho Sanomi (Talveras) – to complete payment.
Although it is too early to predict whether or not the new owners would break the jinx of epileptic power supply in Nigeria, it is, of course, trite to say that the cost of a lack of constant power supply is unquantifiable. The failure by government to honor agreements signed with these new owners, jeopardizes the ability of the affected investors to make the badly needed investments in the power sector, undermines their hard-earned good standing with creditor banks and unduly increases the impact of epileptic power supply on the people. These new owners are well-meaning Nigerians with a stake in the economy, not some fly-by-night briefcase contractors. It is therefore myopic and self-destructive for administration officials to try to short-change them with thread-bare arguments and fixations about protecting consumers from exorbitant prices, which for years has been the lot of helpless Nigerians; who have been forced to pay more for darkness.
As a matter of fact, while it is the immediate duty of government to ensure Nigerians are not ripped through unfair charges, Nigerians are prepared to pay for quality service if it is rendered and fairly priced. Government should therefore not orchestrate seesaw electricity prices through a disguised rent-seeking strategy of arm-twisting investors in the name of keeping electricity prices low. Some time ago, the Minister of Power, Chinedu Nebo, reportedly said that 120 million Nigerians are currently without electricity. This means 75% of Nigerians have no access to a most basic necessity of modern life. It is a very sad commentary on Nigeria that on this day and in this age, 160 million citizens have to live and work on no more than 4,000 megawatts of generated electricity, a large percentage of which is even lost in the process of transmission.
In August 2010, President Goodluck Jonathan initiated a road map for reform of the power sector. The plan projected that 5,379MW would be generated by December 2011. Prof. Barth Nnaji even went further to say at his Senate confirmation screening as Minister of Power that he expected an increase from about 3000MW in July 2011 to 15,000MW by 2014, subject to adequate funding. Till this day, the story remains the same: miserably inadequate power generation, inefficient transmission, and equally inefficient distribution that everyone attributes to poor funding. But it is evidentially established that year in year out, tons of money in just about every major currency has been allocated to (although not necessarily spent on) the power sector.
So much has been said, so much has been spent, and so much has been promised by successive administrations with little to show for it in the sector. The excuses from government for the dismal performance can sometimes be as unpardonably hare-brained as they are laughable. When power failure is not attributed to a shortage of gas to thermal stations, it is, as claimed many years ago, some snake holed up within the Kainji dam turbine which caused a nationwide power failure. Minister Nebo took the ridicule beyond absurdity when he blamed the power outage in Bayelsa State on “a huge tree [that] fell on the transmission tower and shattered it up to the foundation.” Elsewhere, it was rainstorm that brought down transmission towers, or hoodlums vandalizing power equipment or system collapse, or a “cascade trip”- whatever that means. Underlying all these excuses is what any right thinking person will discern as contempt for the people that government is supposed to serve. Contempt for the public is obvious because, even as power supply remains persistently erratic, tariffs have consistently increased.
It certainly requires no magic to give Nigerians constant power supply. Only the political will to do so; a commitment, and judicious application of required funds, a transparent, fair, and dependable regulatory framework, not excuses for non-performance, unfulfilled promises, and hardball tactics to shake down investors. In his inaugural address on May 29, 2011, Jonathan promised that transformation would be achieved in all critical sectors; that power sector reform was at the heart of his administration’s industrialization strategy and that he would continue to fight for electricity to be available to all citizens. At that time, power generation was about 3,500 MW. Two years on, and billions of naira voted for it, this miserable figure has increased by no more than an even more miserable 1,000 MW. It would take a miracle to achieve the transformation of a country so under-powered; it remains anybody’s guess just how the much-touted Vision 20-2020 would be achieved in the next seven years.
