Review of DisCos’ ownership




The recent setting up of an adhoc committee to review the ownership structure of Power Distribution Companies (DisCos) by the National Economic Council (NEC) is the right foot forward at resolving the nation’s seemingly intractable electricity distribution crisis. NEC’s deft move is indeed a welcome development, coming on the heels of the senate’s mandate to its committee on power to investigate the activities of power generating and distribution companies to unravel the cause of unsteady power supply in Nigeria.

Briefing journalists at the end of NEC’s meeting presided over by its Chairman, Vice President Yemi Osinbajo, at the Presidential Villa, Abuja penultimate Thursday, Imo State Governor, Emeka Ihedioha, said the panel has a mandate to review the companies’ ownership status. Ihedioha stated that “NEC resolved to constitute an ad hoc committee, including Kaduna Governor Nasiru El-Rufai, as well as governors representing the six geo-political zones, to do the review.

El-Rufai once served as Director-General of the Bureau of Public Enterprises (BPE) and the six governors are on the Board of the Niger Delta Power Holding Company (NDPHC). The Imo governor said that representatives of the National Council of Privitisation (NCP) and the BPE would serve on the committee.

On what gave rise to the discussion on the NDPHC, the governor said an issue came up in terms of ownership between the federal and state governments. He said: “It was important for us to deal with all concerns and establish factually what the true situation is. Whether it is a joint or partnership ownership structure between the federal and state governments, or whether the federal government has divested its shares”.

The senate had earlier mandated its committee on power to investigate the activities of power generating and distribution companies to unravel the cause of unsteady power supply in Nigeria. The investigating committee has four weeks within which to submit its report to the senate for consideration.

The decision by the upper chamber to probe power generation, transmission and distribution in the country was reached sequel to a motion considered during plenary penultimate Tuesday. Sen.Chukwuka Utazi (PDP, Enugu North) who sponsored the motion said Nigeria, with a population of 200 million and an annual growth rate of 2.6 per cent per annum, is the seventh most populous nation on earth.

According to Utazi, the power generating or installed capacity of Nigeria in relation to its population and Gross Domestic Product cannot place the country to compete favourably in terms of development with other nations. He, therefore, called on the federal government to find solutions to the power deficits faced by the country.

Citing Indonesia and Philippines as examples, the lawmaker noted that both countries with a population of 267 million and 107 million, respectively, have installed power capacity of 60,000 MW and generating capacity of 42,465 MW as well as installed capacity of 20,055 MW and generating capacity of 16,271ME.

The lawmaker while expressing optimism that Nigeria can set a realisable target of generating capacity of 100,000 MW in the next ten years, said same can be achieved through a mix of energy sources like natural gas, hydro, coal, wind and renewable energy. He added that the various zones in the country are naturally positioned to take advantage of the various energy mix and renewables, particularly solar energy.

Underscoring the motive behind the privatisation of the power sector in 2013, Utazi stressed that the objective in privatising power distribution assets was not to achieve the highest financial bids. According to him, it is rather to get capable companies that can achieve the lowest Average Technical, Commercial and Collection losses within five years.

Bala Ibn Na’Allah (APC, Kebbi) alleged that some highly placed persons were sabotaging efforts by the federal government to fix the power problems in the country. He said: “Some people have sworn that nothing works in the power sector and had done everything possible to frustrate efforts by the government to improve power generation and distribution. There is need to break their stronghold on electricity generation and distribution.”

Accordingly, the senate urged the federal government to upgrade the transmission infrastructure of Nigeria’s power grid for more efficient transmission of power. While advocating 100,000 megawatts installed capacity to match size of Nigeria’s economy and population, it urged the federal government to break-up the power distribution companies into smaller, more manageable distribution companies for optimal performance.

The lawmakers also urged the federal government to devise power generation models that are embedded for economic and industrial clusters, hinging around regional grids that are semi-autonomous but interconnected to the national grid.

It is unfortunate that despite failing to meet their contractual obligations since taking over national electricity distribution assets over five years ago the DisCos have neither shown any capacity to meet Nigeria’s power demand nor been remorseful for its dismal performance. This disdain for the wellbeing of the citizenry as well as the nation’s development should be viewed as economic sabotage and visited with appropriate sanction.

We, therefore, commend both the senate and NEC for their patriotic gestures and advise that the reports of these investigative panels should be treated with dispatch and not be allowed to end up in the cooler like many others before them.

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