Fashola demands refund of N16 billion illegal deductions on power by FG

Channels Television  
Updated July 10, 2012

The governor of Lagos State, Mr. Babatunde Fashola on Tuesday called on the Federal Government to refund the N16 billion deducted from its allocation from the Federation Account over its investment in power.

Claiming the nation’s economic capital has been unjustly treated in the on-going privatization exercise, especially, when it comes to privatization of assets. The governor asserted that if the nation must make a success of the privatization exercise in the Power Sector, it must start from Lagos

Mr Fashola made the lamentation about the alleged plight of the state while playing host to the members of the Senate Committee on Privatization which paid him a courtesy visit.

Explaining the genesis of the N16 billion illegal deductions, the governor explained that the state government invested in power plant, yet the power was not dedicated to Lagos, “but they (FG) have deducted about N16billion of our money in spite of court orders.” “Now, we get punished for taking the initiative” he added.

“There is a standing liability to us by the PHCN, the illegal deductions of N16 billion for power that we did not get, for the power that other states used. Now, those are issues of social and economic injustice that must be resolved before we can even have a successful privatization exercise. We are in court and there is arbitration”, the Governor said adding that he has written to the National Assembly to say that those are “red flakes to the successful completion of the exercise.

The governor however warned that as much as the state government supports the privatization exercise, if the money was not refunded, it would constitute clogs to the successful execution of the exercise.

Noting that the debt would be part of the due diligence obstacles for any concessionaire to cross, Governor Fashola warned, “If our money is not paid, clearly there will be issues of financial caution, I can tell you that”, calling on the Committee to persuade the National Assembly to make appropriation to refund the N16 billion to Lagos State.

“”It is no longer a question of who is right and who is wrong. The impact of Power to the National Economy is more than N16 billion”, the Governor said, adding, “Now, if the PHCN workers that went on strike at the onset of Power Reforms were paid, why should we not be paid because we did not go on demonstration; we are being civil”.

Governor Fashola insisted that for the privatization of the Power Sector to be successful, “We must put our best foot forward in Lagos because the Power demand is here, the Power assets is here”, warning that if the Federal Government should put on the attitude of “we can do it without them”, there would be problems ahead.

“Most of the distribution assets are here, we have invested in transformers, feeder pillars, poles, cabling and others. Those are the distribution assets any concessionaire is going to use. We have a transformer manufacturing company in Lagos where we are producing transformers and distributing to communities”, the Governor said pointing out that so far the electricity regulatory company has come to inspect the assets.

Noting that there is a provision in the Constitution that allows states to distribute power in areas not covered by the National Grid, Governor Fashola said such areas were not defined and called on the Committee to take up the task to legislate on such issues so that concessionaires and private investors would know which areas to invest in distribution.

The Governor also called on the Committee to assist to create “Greenfield Power Distribution Companies” saying they would act as backups for the 11 distribution companies carved out of the PHCN.

“It is not enough to say that the 11 distribution companies carved out of the PHCN are the only ones because if you look at the NITEL story, it was the Greenfield telecommunications companies that ultimately baled us out of our problem. So we must have Greenfield distribution companies that carry no baggage.

Federation’s orphan

“We have been given the short end of the stick consistently. Given our contribution to the national economy, there has been no reciprocity. Our assets and our lands have been servicing the nation; these lands were there before they were acquired by the Federal Government for government business and we are saying, if they are no longer serving government business we are supposed to take our land back”, the Governor said.

Describing it as social injustice, Governor Fashola said Lagos State has been “the orphan of the entire Federation”, adding that the Federal Government took the State’s assets and gave nothing in return in spite of the fact that the State contributes  the highest quota to the Gross Domestic Product (GDP) of the country.

Earlier, in his opening remarks, Chairman of the Committee said the Committee was in Lagos to inspect the Egbin Thermal Station in Ikeja and the Eko Business District as part of its oversight functions on the processes for the Privatization of the Power Sector.

According to Senator Obadara, the Committee paid a courtesy call Mr. Fashola with a view to interface with the State Government on areas of mutual interest in the drive towards improvement in the Energy Sector and to appreciate efforts made by the state government in the Independent Power Project scheme.