2-IN-1 STORY: Power Sector Was Sold To Clueless Investors — Saraki; Nigeria Paid ₦2.7tn For Darkness In 16yrs — Dogara

Senate President Bukola Saraki on Tuesday criticized how the power sector was privatized, saying it was sold to individuals who had no idea about how to run it.

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He said the mistakes of past governments “borne out of ignorance, selfish interests and fraud”, brought Nigeria to this point.

Saraki said this at a workshop on power sector organized by the national assembly in Abuja.

He lamented that the sector, in spite of the enormous resources committed to it for the last 14 years, had remained in a perilous state.

“Today, we are on the verge of a total systemic breakdown and I see this as an opportunity to stop this train from derailing completely,” he said.

“We sold the discos to individuals and parties who had no idea about running a proper power distribution business. Licenses were issues based on cronyism rather than capital adequacy, market experience and capacity to deliver. Agreements were faulty and transaction integrity hardly imperative.

“This is the opportunity for both the legislature and executive to come together to forge a solution to this perennial problem. We cannot afford to waste the opportunity we have now. We owe it to the people who have entrusted us with the privilege of working out solutions to their problems by electing us to our various offices that we are hard on our heels to bring them solutions not complaints.

“We cannot shy away from the fact that inexcusable mistakes have been made in the past that brought us to this point and we must be willing to face up to them and clearly delineate them in order to ensure that we do not return to the mistakes of the past.

“Clearly some of these where innocent mistakes, others were rather the product of selfish interests, some fraudulent, some born out of ignorance and others glaring lack of capacity apparent from day one. All of these combined has brought us to the mess we now have to face up to.”

Emphasizing that the problems in the sector were the country’s own making, the senate president said sacrifice must be made to overcome the challenges.

“Where we are is not an accident. We walked our way into the landmine we are facing with the decisions we made in the past. While privatization is a right policy recipe to pursue in order to put in place a power sector that can galvanize our economy, we forgot that the participation of the private sector is not an end in itself,” he said.

“We neglected that unless this is done, observing transparency, competition, transaction integrity we might end up with a sector worse than the past. The BPE did things that were inexcusable. To imagine that even the sale proceeds of about US$4bn was solely spent towards the payment of pensions and staff. Not one single kobo was expended towards catalyzing the sector back to life.

“GENCOs bought generating units without a clear assurance of source of gas to fire plants and government had no active roadmap for delivery of a gas market infrastructure to make this happen. Yet gas companies and the IOCs were exporting our gas out of our shores to create gas markets elsewhere in Europe and Asia while we languished in darkness as a result of incessant, persistent and erratic power outages. In the face of all these our people continued to be called upon to bear inexplicable bills estimated beyond rationale service value.”

Nigeria Paid ₦2.7tn For Darkness In 16yrs — Dogara

The PUNCH reports that the Speaker of the House of Representatives, Mr. Yakubu Dogara, said on Tuesday that over ₦2.7tn of tax payers’ money spent on the power sector in the last 16 years only bought darkness to Nigerians.

Dogara noted that nothing had changed in the sector other than the fact that it continued to consume money but produced little positive results.

He observed that the privatization of the sector had not fared better, a development Dogara said had put more pressure on both the Federal Government and other stakeholders to think of realistic steps to revamp electricity supply.

Dogara spoke in Abuja at the opening of a stakeholders’ dialogue on the ‘Nigerian Power Challenge: A Legislative Intervention’.

The session, which was facilitated by a power supply stakeholder, Surging Gold Limited, had, in attendance, the President of the Senate, Bukola Saraki; the Minister of Power, Works and Housing, Mr. Babatunde Fashola; and some key investors.

Dogara stated that Nigerians must again begin to ask questions as it would appear that every effort made to rescue the sector produced hiccups

He added, “Perhaps, the most important question is what happened to the ₦2.74tn spent on the sector from 1999 to 2015?

“Why is it that the more we spend on the power sector, the more darkness we attract?

“Why are most of the companies licensed by Nigerian Electricity Regulatory Commission not able to start their projects?”

Saraki pointedly said epileptic power supply in Nigeria was the “failure of governance.”

He stated, “Wherever we go in the world, the failure is on all of us, whether we are in the private sector or those of us in the public sector.”

The Senate President observed that privatization was meant to be a solution, lamenting that generation companies and distribution companies were sold to persons who had no idea about how to run the sector.

Saraki called on all stakeholders to be sincere in finding sustainable solutions to the sector by thinking more of the general interest of Nigerians than selfish interest.

“We must be prepared to put Nigeria first and the government itself must be sincere with every decision that they have to take,” he added.

Fashola told the session that he could not agree less with Saraki and Dogara, but quickly added that there was no going back on privatization.

The minister argued that what was needed to be done was to strengthen privatization by putting the right structures in place to encourage the investors.

For instance, he said GENCOs were battling huge liabilities, which had hindered their ability to pay for gas supplies to generate power.

The minister also made references to court cases slowing down developments in the power sector.

Speaking on the impact of vandalism on the sector, the minister added “almost 3,000 megawatts of power” had been “decommissioned” by vandalism.

On their part, the investors pointed out that the way out was for the government and regulators to support “cost-reflective tariff” and for consumers to pay the power already supplied.

The Chairman of Heirs Holdings, Mr. Tony Elumelu, for instance, said there was no way investors would continue to put in more money when they were owed over N50bn.

Elumelu claimed that the sector was over-regulated and was not given the same leverage the telecommunications sector enjoyed years back to begin their operations smoothly.

He stated, “The tariff has to be cost-reflective for the sector to work, especially we are not taking into account the rate of inflation and the exchange rate.

“The cost of gas is there and so much regulation is stifling the takeoff of privatization. The sector must be allowed to flow freely, like the telecommunications sector did before tariffs began to crash years later.

“With debts of up to ₦50bn, it is unfair to expect that investors will perform miracles. The system must encourage them and we all must be sincere with ourselves.”