THE immediate past Minister of power, Dr Lanre Babalola recently shocked newsmen in Lagos when he declared that not every one wants constant supply of electricity in the country.
Babalola who was speaking just few days away from the dissolution of the federal executive council stated that it is easy to take a distant view of the sector and conclude that everybody would surely need electricity supply, but when he got into the system he discovered that there are people hell bent on ensuring that Nigerians don’t get improve power supply.
Further investigations however revealed that there are groups of people who appear to be benefiting from the horrible situation in the power sector. Since the military era there have been power installations across the country which receives maintenance allowances running into billions of naira without a single maintenance carried out on them, a situation which is said to have reduced but still exists in the system.
A close government source who spoke on the condition of anonymity told Sweet crude afterwards that the minister who did not comment further on the issue was apparently referring to a cabal, seemingly highly placed and which is benefiting immensely from the current state of the power sector. “Some of these people get constant government contracts to refurbish and overhaul a completely dead power plant which can not be revived, and of all the power plants starts working and there is constant supply who gives them contracts to repair what? He asked.
There have been instances in the past where people get paid a hundred percent to do supply of materials and they would fail to supply. Nothing is on record to have happened to these people and that has gone a long way to encourage others.
These people, mind you are the same highly placed people in leadership positions today, either them or their protÃ©gÃ©”.
The former minister who spoke at a breakfast meeting with energy correspondents in Lagos also used the occasion to call for the reformation and general overhaul of the Power Holding Company of Nigeria (PHCN) as it is the only panacea to the myriads of problems bedeviling the entire sector.
According to him the country must do reforms if it must attract investors for the improvement of the power sector. “The focus of government this year should be to drive the reform as that is the only way we can drive the reforms of the power sector. The reforms on its own should be aimed at making the distribution company’s run effectively on their own. The second leg of the reforms is to privatise some of these entities”
Dr. Babalola who was visibly pained that the efforts of government in the power sector has not translated to steady and increased power supply to Nigerians further opined that part of the reason the reform is essential is the staff strength of the power utility company which is currently put at 50,000, a figure which is said to be highly unnecessary and an avoidable waste of very scarce resources. He stated further that the company generates about N8 billion monthly and staff salaries and overhead costs claims about 90 percent of that sum, a situation which he said is unacceptable if the power sector or the PHCN must resolve its problems.
The former minister who took newsmen through the nitty gritty of the power sector from the gas gathering systems of the oil production fields to the thermal power stations across the country also noted that as a back up strategy the federal government is also considering the use of condensate for the purpose of power generation as the country’s over reliance on gas is being constantly sabotaged by people who feel they have issues to resolve with the government.
Ho also noted that no gas pipeline gets attacked due to its volatility which is of high pressure but when the oil or condensate line is attacked or vandalised and the flow of oil has stopped there is no way for the gas to also flow as this is a by product that comes with oil production.
On the Central bank’s N500 billion intervention fund in the sector, Babalola said that the establishment of a technical team was necessary because investment in power must take cognisance of the transmission, distribution and fuel supply if we are to avoid building white elephants or plants that will only work part of the time.
“We need to adopt a holistic approach on this issue by addressing all variables in a technical manner and the viability of such projects in the identified area””.
He said the visit was to commend the effort of the CBN and also present issues on power project development in practical perspective and more importantly; the Ministry of power’s readiness to play a pivotal role based on the series of studies and feasibilities on projects where the private sector players can be effectively engaged.
According to him not only is significant funding required in generation but also in transmission, distribution and fuel supply to effectively produce and deliver power to Nigerians for domestic and economic use.
The Minister who was accompanied on the visit by the Minister of State, Arc. Nuhu Wya and top officials of the Ministry and Power Holding Company of Nigeria (PHCN) told the CBN team that there was the need to avoid the mistake of the past in citing and executing power projects where all the variables required for functional and viable projects are not properly considered before rushing into their development.
The Minister specifically stated that in addition to providing debt finance, CBN could further facilitate private sector investment and participation by playing a prominent role in the provision of guarantees and securitization, which are critical for ensuring long-term sustainability of power plants. He further stressed that this is the type of structure used worldwide to promote private sector in the development of power projects. Even in Africa, Ghana, Cote d’Ivoire and Algeria have used this structure to good effect.
The former Minister however lamented that the condensate evacuation tussle between the Nigerian National Petroleum Corporation (NNPC) and Shell is still ongoing and really needs to be resolved for there to be increased power supply nationwide.