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PHCN must not be hijacked by rent seekers – Stakeholders

By Ebele Orakpo
Although many people rejoiced when they heard of the bid by the Federal Government through the Bureau of Public Enterprises (BPE) to privatise the electricity company, Power Holding Company of Nigeria (PHCN), some concerned individuals have, however, called for caution as according to them, once beaten, twice shy.

They believe that Nigeria has been hurt before by certain privatisation exercises the government undertook on their behalf and are of the opinion that if the PHCN privatisation is not handled properly, it may go the way of Ajaokuta Steel Company, thereby taking the nation from frying pan into the fire.

There is therefore the need for BPE and members of the third estate of the realm, the media, to keep their eyes and ears wide open to ensure that there is absolute transparency every step of the way so that those they described as rent seekers would not hijack the process and plunge the nation into greater darkness.

As at the last count, a total of 331 applicants have expressed interest in owning the companies to be created out of the PHCN. A total of 174 of this number are interested in acquiring the four thermal stations (Ughelli; Geregu; Afam Power Plc, comprising Afam I-V power stations, and Sapele Power Plc.) and the two hydro stations (Kainji Power Plc, made up of Kainji Power Plants and Jebba Power Plants; and Shiroro Power Plc.) while 157 are interested in the 11 distribution companies which are as follows: Abuja Electricity Distribution Company Plc; Benin Electricity Distribution Company Plc; Enugu Electricity Distribution Company Plc; Eko Electricity Distribution Company Plc; Ibadan Electricity Distribution Company Plc; Ikeja Electricity Distribution Company Plc; Jos Electricity Distribution Company Plc; Kaduna Electricity Distribution Company Plc; Kano Electricity Distribution Company Plc; Port Harcourt Electricity Distribution Company Plc; and Yola Electricity Distribution Company Plc.

Although the requirements for prospective bidders are clearly spelt out, experience has shown that some unscrupulous elements still find a way round it. For instance, successful bidders are expected to operate, make investments to improve generation capacity as well as distribution network and customer service in line with the FG’s objectives set out in the National Electric Power Policy (NEPP).

These rent seekers, described as economic agents who extract uncompensated value from others without making any contribution to productivity, such as by gaining control of land and other pre-existing natural resources, have no money to invest so what they do is to liaise with some foreign companies and use their name to bid, pretending that the foreign company is the actual bidder.

Once these rent seekers win the bid and buy over the outfit, they sign a memorandum of understanding with the foreign company who would be willing to be contracted to do some jobs for the local company at a very high cost to the nation.
BPE should be able to tell Nigerians who and who are bidding, their partners and their antecedents. If they end up selling to rent seekers, what will happen is this: The power sector as we all know, is capital-intensive and since these people have no money to invest and their so-called foreign partners are not willing to invest a penny in the business, no new power stations would be built, no new transformers would be bought, old ones cannot be replaced so things will keep going down hill.

And because money still rolls in from PHCN customers who pay their electricity bills, people may not notice quickly the decay and then after sometime, they may invite workers from their foreign partners to come and work for them and of course at a very great cost to the nation as each expatriate worker would earn between $30,000 to $40,000 per month as salary, all coming from bills being paid by consumers. Moreover, these so-called expatriates may not be as good as the local PHCN staff.

A time will come when they will begin to get involved in asset stripping, selling off PHCN’s assets just to make money to keep the business running. This will definitely take Nigeria to a worse state than we are in now thereby making us a powerless state as a nation without electric power is powerless and nothing works in such a place.


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Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.