THE National Conference Committee on Energy has recommended a review of the privatization process carried out by the Federal Government in the electricity sector.
The committee, chaired by former Governor of Oyo State, Chief Rasheed Ladoja, said the Electric Power Sector Reforms Act 2005, should be amended.
In its report, which was tabled for debate, yesterday, the committee decried what it called the “decay in the power sector starting from the mid-1980s” when it noted, “government decided to embark on power sector reforms.”
“This gave birth to National Electric Power Policy in 2002, the policy document which in turn led to the Electric Power Sector Reforms Act 2005 and the eventual privatization of the unbundled successor companies of NEPA,” it added.
The committee’s report also noted that: “The current installed generation capacity is said to be 9,920MW with available generation at 6,000MW. Technical losses is reported to be at 12 per cent. However, the peak generation standing at 3,962MW as at April 28, 2014 is disappointingly below the reported available generation of 6,000MW.”
“The post-privatization situation has so far not improved the power sector situation in the country. It has only magnified the cash flow deficit, poor gas supply and bigger ATC and C losses. The sector is consequently heading towards a major crisis.
“It is the observation of the committee that government’s efforts to implement the NEPP and enforce EPSR 2005 have been challenging and results disappointing.
“The committee also believes that the entire process will not provide the rapid development of the electricity industry at the required rate that can take Nigeria into the league of developed nations. Consequently, the policy and Act need to be carefully reviewed. Certain provisions of the Act need to be amended, to address challenges presently affecting the performance of the sector.”
Contributing to the debate, Chief Ajibola Ogunshola suggested that state government should be made to play certain roles in the management of the power sector.
Ogunsola faulted the committee’s recommendation which he said, excluded states in the electricity management.
His words: “There is no mention of the state governments at all in this report. Shouldn’t the state governments have a role? For example, rural electrification seems to me like what should be a state government affair but we seem to want to leave everything to the Federal Government.
“For over 40 years, we have left the management of the power sector in the hands of the Federal Government. These people who have been brought in have been there for just less than one and half years. So I think we should give them a chance. Billions of dollars and naira were spent by the Federal Government on electricity projects in this country. What came out of it? So we should distinguish between the concepts of privatization itself and whether some of the assets were sold to the wrong people.
“If the assets have been sold to wrong people who could not deliver then that should be reviewed but that should not detract from the concept of privatization as the way forward for our electricity industry,” he added.