Tackling the Challenges of Power Sector Reform


Worried by the inability of the new power investors to meet electricity consumers’ expectation after privatisation, the federal government has set up a power investors’ committee to tackle resultant challenges

By Anayo Ezugwu  |  May 19, 2014 @ 01:00 GMT

THE federal government has constituted a power investors’ committee to tackle the challenges and shortcomings in power privatisation. Benjamin Dikki, director general, Bureau of Public Enterprises, BPE, said the committee, which is similar to the Bankers’ Committee in Nigeria, is chaired by Namadi Sambo, Vice-President and chairman, National Council on Privatisation, NCP.

The BPE boss revealed this fact at  an interactive session with members of the House of Representatives Committee on Privatisation and Commercialisation,  power investors and the BPE during the committee’s oversight visit to  Ibadan Electricity Distribution Company, IEDC, on Tuesday, April 29. He said the committee would meet quarterly to review issues and take critical decisions on the privatised power sector.

Dikki said the membership of the committee was drawn from the Nigerian Electricity Regulatory Commission, NERC, the Nigerian Bulk Electricity Trading Company, NBET, the ministry of power, the Nigerian Gas Company, NGC, the BPE and other relevant stakeholders. The DG, in an apparent response to a suggestion by the committee for  immediate constitution of an all-stakeholders’ committee to address the challenges faced in the power sector, said it would amount to a duplication of efforts to set up a similar committee.

Briefing the committee members earlier, John Darlington, deputy managing director, IEDC, said  the distribution company was the biggest in the country with 1,073,673 customers. He called on the government to take steps to make the generation and distribution power companies to be financially viable to enable them undertake aggressive investments in power infrastructure.

The DMD said this could be done through having a tariff structure that is cost reflective and recognises current market situation as well as undertake sustainable investment in the transmission network to deliver generated capacity to distribution companies without constraints. He also called for vigilance by the distribution companies and the relevant authorities “to combat vandalism and electricity theft which rob legitimate customers of power and revenues that will help sustain the market.”

Darlington further called for  mediation by the government to delineate asset boundaries between the Transmission Company of Nigeria, TCN, and distribution companies for effective network operation. While decrying the frequent picketing of the company’s premises by former staff of the defunct Power Holding Company of Nigeria, PHCN, the DMD said urgent steps should be taken to check the development as it “portends grave danger for investors in the power sector.”

He also called for the review of the classification of the core/non-core assets of the distribution companies as some of the assets classified as non-core assets were essential to the operations of distribution network expansion.

At the Eko Electricity Distribution Company, EKEDC, Oladele Amoda, the managing director, said the company had secured $150 million to expand and improve its network. He told the lawmakers that the company planned to invest N42 billion in the next five years for network improvement to reduce aggregate technical, commercial and collection losses and enhance service delivery.

The MD said that as part of its digitalisation programme, customers of the company could pay their bills on-line and through banks in any part of the country, a feat, he said, only the company had been able to achieve. Amoda called on the TCN to address the severe power evacuation capacity limitations in the transmission stations for EKEDC to improve power supply to its customers. He added that the company was ready to assist in funding of some of the transmission projects that would remove interface bottlenecks.

In her remarks, Khadija Bukar Abba-Ibrahim, chairman of the House Committee , said the purpose of the visit was to assess the performance of the companies in line with the post- acquisition plan they signed with the government. She said the Committee would initiate laws that would guarantee effective performance of the companies for the benefit of Nigerians.

Abba-Ibrahim further urged the legal units of the new power investors to collaborate with the two committees of the National Assembly to enact laws to remove inhibitions for  their effective performance.

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