Speaker of the House of Representatives, Hon. Yakubu Dogara, yesterday urged the Federal Government to review the privatization of power companies in the country. He said the privatisation of the sector has not yielded the desired results.
Dogara made the call while declaring open the investigative hearing on the need to halt the plan to raise a federal governmentsecured bond of N309 billion to finance the shortfall in the Nigerian Electricity market.
Represented by the minority whip, Hon. Yakubu Barde, the speaker noted that the whole essence of Federal Government embarking on privatisation of the defunct Power Holding Company of Nigeria (PHCN) and electric power sector reform programme was to bring about efficiency in the industry.
According to Dogara, “Unfortunately, since the unbundling of PHCN and transfer of the businesses to the privately-operated successor companies on November 1, 2013, we have not had a good report from the electricity market.”
He stressed that the statistics showed an abysmal situation of things, adding that if the trend continued, there may be need to do a fundamental re-thinking of the privatisation process. “Duration of uninterrupted supply is average of six to eight hours per day. Metering of customers is dismal. Crazy estimated bills are used to exploit consumers. Generation capacity has not improved; yet, tariffs were increased in February 2016,” he said. He noted that in spite of all these, there were reports that the cumulative market shortfall had risen to over N700 billion as of date.
“This trend escalates at the rate of about N25.6 billion monthly from Nigerian Bulk Electricity Trading Company Plc (NBET) in August 2016 electricity market payment report. “Our concerns in the House of Representatives are, which should come first, stopping the bleeding of the market revenue by putting controls in place or raising a bond to cover the incessant shortfall? “Why is this bond secured by the Federal Government in a privatised market operated by private entities?
What is the performance of the N213 billion Stabilization Facility availed the operators by the Central Bank of Nigeria (CBN) in March 2015? “What is the role of the Nigerian Electricity Regulatory Commission (NERC) in this process? Who will bear the cost of the facility, consumers or the operators?
How would this impact the electricity tariff? “My expectation is that all these issues would be brought to the fore at this investigative hearing and Nigerians will be well enlightened on what is going on in our electricity market.”
Earlier, the Minister of Power, Works and Housing, Mr. Babatunde Fashola, said that the quest to resolve the payment gap in Nigeria Electricity Supply Industry (NESI) that threatened the long term sustainment and development of the NESI led to the work NBET had done before the stop order from the House. The minister, represented by Mr. Louis Edozien, permanent secretary of the Power Ministry, said that the bond, combined with promissory note, will greatly help the sector to provide funding, thus resolve significant proportion of the current liquidity challenge in the sector.
Chairman of the committee, Hon. Dan Asuquo, said that the committee recognised that it was in an effort to stem the tide that the Federal Ministry of Power and NBET came up with the concept of raising the Federal Government secured bond.
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