NERC Says Corruption, Poor Budgeting Bedevilling Power Sector

Chairman, Nigerian Electricity Regulatory Commission (NERC), Sam Amadi, on Tuesday, blamed corruption and poor budgeting as the major impediments to the nation’s electricity sector. Amadi also clarified that “fixed charge has not been removed and cannot be removed by an ‘executive fiat’ unless it goes through a process by the regulator.” He was speaking at the opening of a two-day meeting of NERC and Industry Performance Management Officers of Generation and Transmission Company of Nigeria (TCN).

The meeting was organized by NERC to present a template for effective project management to the electricity industry performance management officers in Abuja.

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Noting that prior to 2010, the sector suffered the problem of modelling, Amadi further observed that the sector had been bedevilled by project management problem from 2010 till date.

The problem is mostly caused by corruption, he said, adding that inefficient budget circle has made it difficult for effective delivery of projects within a target time frame in the sector.

Nigeria would have hit about 9,000 megawatts (mw), if all the Nigerian Independent Power Projects (NIPP) were completed and the capacities of existing electricity generation companies recovered, he said.

“Today, the real problem of this sector is performance management. We have moved from modelling. We have set a fairly good enough model that will allow us to create sustainable electricity.

“The problem is poor project management. It includes corruption, which is the beginning because, if you miss-procure, if you award contracts to those who cannot deliver, there is no magic. So, it is not a NERC problem. It is a problem of delivery.

“If we had delivered all the NIPP projects, recovered all the capacity of existing electricity generation companies, we would have been doing over 8,000mw or 9,000mw today. So, the problem of the electricity sector is, we need to develop the skills, project and deliver.

“Some of them are budget circle, think about the Transmission Company of Nigeria. TCN gives a bill of N50 billion; government appropriates N30 billion and release N10 billion. There is nowhere in the world, where projects can be completed with that kind of budgeting circle. So, what we are trying to do in our own little way, as regulators, is to, in this meeting, put our finger on why are we not executing efficiently and effectively,” he said.

Amadi said the meeting would provide the opportunity to present the performance management officials a template designed by NERC in collaboration with a consultant.

According to him, the template would enable the performance management officers to learn how to deliver on projects in good time.

“This meeting is for us to meet with our stakeholders to show them the template we have designed with consultants to enable them deliver on time and effectively. We want to increase our capacity. There is a possibility of ending this year with over 6,000mw, or close to that,” he said.