Power Firms Lack Sufficient Capital, Says Senate President
President of the Senate, Ahmad Lawan Thursday said the existing power firms do not have sufficient capital required to operate in the market and meet up with Nigerians expectations.
This development, Lawan said has necessitated a review of the privatisation of the power sector so as to get the sector in proper shape
Lawan spoke when members of the executive committee of the Manufacturers Association of Nigeria ((MAN) visited in Abuja, echoing the frustration of Nigerians at the current situation in the power sector.
The Bureau of Public Enterprises (BPE) had during the former President Goodluck Jonathan administration in 2013 undundled the old Power Holding Company of Nigeria (PHCN) INTO 11 sub units and privatised them. But seven years after the exercise, the nation is still in darkness as the firms have failed to live up to expectation.
Despite trillions of Naira loan from the federal government to the operators, the end product is still inadequate while Nigerians had to depend on alternative power source for their daily living.
The Manufacturers Association of Nigeria (MAN) at its last Annual general meeting stated that its members spent about N98 billion on alternative source of power to keep their factories running, thereby eating into their profits, keeping their overheads high and making them uncompetitive with the foreign goods.
“I think the privatisation has not worked. It has failed because the essence of privatisation is to create efficiency,” Lawan told his guests who complained of the adverse effects of the sordid state of electricity supply in the country.
“It appears most of the companies, the DISCOs (Distribution Companies), have no sufficient capital and probably the same thing with the GENCOs (Generation Companies),” Lawan said.
To butress, Lawan’s point, the management of the Niger Delta Power Holding Company (NDPHC) visited the Oke Aro Power substation where it noticed that about 70 megawatts are stranded owing to lack of infrastructure to evacuate power to the needy.
The Senate President acknowledged the efforts of the government which, out of desperation to create a better situation for the privatised sector, gave out so much money to the companies.
“I think the time has come for the government to take a very drastic but necessary decision. If we have privatised the DISCOs and the GENCOs, I think, the private sector, those who have taken them over, should be able to make them work better than they were before.
The Senate president noted that since the operators lack the capacity to perform to expectations. there is the need to revisit this privatisation programme.
“We cannot go on like this. We should look at the larger interest of Nigerians and not of those companies that have taken over the power sector – the DISCOs and the GENCOs.
He promised the executive of the Senate’s support and stressed a review of the privatisation exercise because the companies are not able to provide the power that we thought they could by now,” Lawan said.
The issue of power has remained one of the major challenges of the nation’s economy which has been in comatose largely because of overheads owing to the inadequate power supply.
On the complaint by MAN on the delay encountered in clearing goods at the nation’s seaports, the Senate President expressed his confidence that the federal government committee on Ease of Doing Business chaired by Vice President Yemi Osinbajo would address the issue.
The committee, he said has since its inception done a lot to normalize and restore efficiency at the ports.
He assured the Association of the National Assembly readiness to partner with it for the growth and development of the nation’s economy.
“Feel free to always come to us when there is need for legislative intervention,” he said.
MAN President, Engr. Mansur Ahmed listed insecurity, delebitating power supply and delay in clearing goods as major challenges facing the members of the Association.
The challenges, Ahmed said has resulted into lack of competitiveness by the nation’s manufacturers.
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