…investigates GENCOS’, DISCOS’, transmission coys’ role
Senate President, Ahmad Lawan, on Monday, directed the Senate Committee on Power to probe the 2013 agreement signed between the Federal Government and the electricity generation, distribution and transmission companies on the privatisation of the country’s power sector.
Lawan also challenged the Senate Committee to investigate what has become of the N1.8trillion Share Purchase Agreement between the Federal Government and the electricity generation, distribution and transmission companies.
The Senate President, who spoke on Monday at the public hearing on “Power Sector Recovery Plan and the impact of COVID-19 Pandemic,” said that the overall expectation of the Nigerian government and the citizens was that the power sector, after privatisation, would be far better, but that expectation had yet to be fulfilled.
The Power Holding Company of Nigeria was in 2013 unbundled to pave way for the emergence of six Generating Companies, 11 Distribution Companies and one Transmission Companies of Nigeria. Both the GENCOS and DISCOs are fully privatised outfits.
He said, “When you have privatisation, you have the Share Purchase Agreement. This investigation should look at what has happened.
“What are the responsibilities and obligations of the Federal government in the Share Purchase Agreement? What is BPE (Bureau of Public Enterprises) supposed to do?
“And equally and very important, what are the successful investors, who are given 11 DISCOs and Six GENCOs supposed to do and within which time framework?
“Government should not be giving free money. N1.8 trillion has been given to DISCOs, maybe in their books. The actual money might have been given to the GENCOs.
“N1.8 trillion is a huge amount of money. Is it part of the Share Purchase Agreement that we should be giving this kind of money or what are we supposed to do as a government? What is our obligation?
“Government cannot afford to just spend money that you hardly understand why it is given and I will advise the Executive here, next time, if there will be any next time, to give such money, bring it to the National Assembly for approval.
“We want to be very critical of how funds are given to privatized enterprises. We expect that by now, our level of generation, transmission and distribution would have been far better.”
Lawan also stated that Nigeria could not be competitive until there was regular power supply to drive the nation’s economy, adding that the country would remain a dumping ground if the power sector failed to provide the required regular power supply.
He, however, said he would rather call for a review of the privatisation deal and not an outright cancellation of the deal.
He said, “While I will not call for an outright reversal of the privatisation that was done in 2013, I believe the time has come for us to review it.
“If those who are in charge now don’t have the financial muzzle, please let’s admit that we should look for partners who will come in with more funds.
“If the government cannot fulfil its obligations because it holds 40 percent, let it divest so that we don’t hold this sector unnecessarily stagnant.
“The purpose of privatisation, just to remind us, is not for the government to wash away its hand, to run away from responsibilities. It’s an admission by the government that, first, it doesn’t have the resources required to move this sector forward.”
Lawan said that Nigeria could not have made any serious, meaningful and sustainable progress without power.
The Senate President said, “For us in the National Assembly, particularly in the Senate, we have been very concerned. I believe that we all understand how Nigeria has remained undeveloped, especially when we are talking about manufacturing, empowering our artisans, the vulcanisers, the barbers. Nigeria cannot be competitive.
“Last year, we signed the Africa Continental Free Trade Agreement. How can Nigeria take advantage of that agreement without power because we cannot produce anything in a competitive environment here? So, Nigeria will be a dumping ground.”