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The ministry of power says that senators’ poor opinion of the privatisation of the power sector by the immediate past administration is not in line with reality
| By Anayo Ezugwu | Aug 31, 2015 @ 01:00 GMT |
THE ministry of power has faulted the assessment of the power sector by the Nigerian Senate, saying that their opinion about the electricity industry was not in line with reality. Godknows Igali, permanent secretary, ministry of power, said the senators recent claims that privatisation exercise had failed to live up to expectations was due to misconceptions which they needed clarifications on
According to him, the ministry is in consultation with the leadership of the Senate, and hopes to clarify extant issues in the electricity privatisation exercise under the administration of former President Goodluck Jonathan. Igali said the meeting with the senators is to bring them to fore with developments in the market driven power sector.
“We are discussing with the Senate. There are areas of misunderstanding and when things are not too clear, you dialogue and try to explain. We are closely with the Discos and we assure Nigerians that on the short term and not long term, power supply will be reliable,” he said.
The Senate had on Tuesday, August 11, constituted an ad-hoc Committee to carry out a holistic investigation into the management of funds appropriated to the power sector from 1999 to date. According to Bukola Saraki, Senate President, inadequate power supply in the country was a cause for concern as it had affected economic growth. He stressed that besides corruption, lack of power supply had plunged the country into further hardship.
“We thought that with the Power Reform Act and unbundling of the Power Holding Company of Nigeria (PHCN), we will begin to witness an improvement with regard to power supply, but unfortunately it is not so. The ad-hoc committee we will set up should look at the activities of the DISCOs and what is preventing Nigerians from benefitting from the unbundling of the PHCN,” he said,
Also, the Senate urged President Muhammadu Buhari to, as a matter of urgency, ask the Transmission Company of Nigeria, TCN, to reconnect Maiduguri, the Borno State capital to the national grid.
The Senate which also condemned the inability of TCN to provide continuous and uninterrupted power supply to all parts of the country, however, expressed concern that Nigeria with a population of more than 150 million produces only 4, 600 megawatts, while South Africa with a population of about 45 million people produces more than 40,000 megawatts.
Announcing the 13-man ad-hoc committee, Senator Saraki urged members of the committee to consider their reputation and integrity and come up with a report that would be acceptable to Nigerians. He lamented that a lot of money had been spent on the sector with no results, while Nigeria was still faced with the challenge of power supply.
According to available reports, Nigerian government has spent $29.635 billion (N6.52 trillion) on power with little or nothing to show for it in the last 16 years. While the administration of former President Olusegun Obasanjo reportedly spent $16 billion (N3.52 trillion), his successor, late President Umaru Musa Yar’Adua, expended $5.375 billion (N1.183trillion), while immediate past President Goodluck Jonathan’s administration spent $8.26 billion (N1.817 trillion).
Irked by the poor power situation, late President Yar’Adua, on assuming power in 2007 said the government under President Obasanjo wasted $10 billion on the National Independent Power Project, NIPP with little or nothing to show for it. This made him to subject the funding arrangements for NIPP to intensive legal, political and financial scrutiny, resulting in over two-year interruption in funding for the projects.
After a protracted and intensive debate on the way forward, however, the National Economic Council (NEC) under Yar’Adua agreed later in 2008 to set aside an additional $5.375billion from the ECOA as a Power Emergency Fund to complete NIPP subject to the approvals of all the state legislative houses.
At the time of the suspension, $2.8 billion was already invested in NIPP, including $1.78 billion in funded letters of credits which allowed some of the projects to continue despite the funding interruption with contracted commitments totalling $7.385 billion. Former President Jonathan had on February 21, disclosed that the federal government had invested more than $8.26 billion in the power sector through the NIPP in the bid to boost the electricity generation capacity in the country by over 4, 700MW.
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