FG To Boost Power With 4,700 Megawatts In 2014 – Igali

On the background of the privatization of the power sector and the recent handing over of the physical assets to the co-investors, ‘View From The Top’ on Channels Television takes a look at the privatisation journey in Nigeria since the birth of the idea in 1999.

The programme on this edition plays host to the Permanent Secretary, Federal Ministry of Power, Ambassador Godknows Boladei Igali.

The focus is on the Nigerian power sector and the question is what is next after the handing over to investors?

With successive governments having failed to deliver on their promises of providing Nigerians with constant power supply, pessimistic views are still being expressed by many Nigerians on the possibility of a change in fortune.

Igali blamed the situation on the poor maintenance of public infrastructure and budget limitations. While also admitting that government is not the best manger of assets, he stressed that underinvestment in the sector has been the major factor behind the constant failure.

He said: “Government is not formed to manage business. Power sector is a business, and government’s role should be that of providing leadership, direction, regulation and allow the businessmen to do business.”

He credited the latest successful handover to the proactive efforts of President Goodluck Jonathan. According to him, he “energized and reactivated the process” which fast tracked the public competitive bidding processes.

Ambassador Igali also spoke in details about the efforts being made by the Federal Government to sustain the privatisation structure and the infrastructural development plans.

He also encouraged Nigerians to have faith in the system.

I Sympathise With Power Sector Pessimists – Dikki

The Director General of the Bureau of Public Enterprises (BPE), Benjamin Dikki, has expressed confidence that the handover of Nigeria’s power sector to investors will yield desired results, but extended his sympathy to those who do not believe so.

“I sympathise with those who are pessimistic. All I can tell them is: just wait and see what’s going to happen.”

Mr Dikki who was speaking on Sunrise Daily, from our Abuja studio described the handover as “a historic process.”

Making an example of the privatised Telecoms sector, he stated that the progress witnessed in that sector will pave way for Nigerians to appreciate the handover of PHCN to private investors.

“We have to look at what has happened via the reform of the telecom sector for us to appreciate the magnitude of what is happening and what will happen in the power sector,” he said, “once you hand over a sector to the private sector and create an enabling environment, you would see a revolution in that sector.”

“We are looking out for a revolution in the power sector,” he said.

Speaking about the defunct PHCN, Mr Dikki explained that the separation of power generation from power distribution would correct the inconsistencies which marred the former system, that amounted to loss of revenue and power.

The power generating companies will sell to the distribution companies who will in turn sell to the end users.

“This has introduced transparency in the power value chain. Revenues that are expected to be collected will be collected because this is now business” and those who invested, expect to make returns, Mr Dikki stated.

The handover will also unburden the Federal Government of any financial obligations as the private investors are expected to pump in funds in order to meet up with the demand for electricity.

“Government is now being free from the responsibility of financing and budgeting for the 14 companies handed over to private investors.”

He countered arguments that the total privatization of the power sector would pose security issues stating that similar things were said when the telecoms sector was to be privatized.

However, he assured that “government is not going to go out of power immediately” and the “proceeds from the NIPP plant (National Independent Power Project) will be ploughed back into other sources of energy: hydro, renewable energy and solar.”

An independent regulatory agency, Nigerian Electricity regulatory Commission (NERC) which he described as the ‘policeman of the sector’ will ensure that the investors follow the laid down guidelines and tariff structure.

Investors To Take Over Electricity Plants By September

The Federal Government on Wednesday said investors will soon take over for Kaduna Distribution Company and Afam Power Plant after the financial bids for the companies was concluded.

The announcement for the winners of the 11 distribution companies unbundled from the defunct Power Holding Company of Nigeria (PHCN) is expected in a few days.

The Director General of the Bureau for Public Enterprise, Mr. Benjamin Dikki says new owners should be ready to take over by September this year.

Six companies have placed bid for the Kaduna Distribution Company while two for the Afam Power Plant.

The federal government is in the process of breaking up the defunct Power Holding Company of Nigeria into 17 private generation and distribution companies and selling them for about $2.5 billion as part of efforts to increase electricity output over the next seven years.

After the presentation of grounds rules, confirmation of submitted bids and eventual opening of the bids, Northwest Power Limited ranked highest for the Kaduna Distribution Company while Taleveras Group put in a bid of $260 million for the Afam Power Plant.

The result of the preferred bidders is expected in a few days.

The conclusion of negotiations with the preferred bidders is expected to lead to the handover of The Power Holding Company Of Nigeria (PHCN) successor Generation Companies (GENCOS) and Successor Distribution Companies (DISCOS) by the federal government.