Hope for a new era (I): For genuine power sector reforms

The common aim in all is to reduce government participation, increase private sector share in the generation and distribution of power, vastly improve generation and distribution and provide the base for much needed industrial infrastructure to have a strong foundation. It was also to enable regular, efficient and affordable electricity to the vast majority of […]

The common aim in all is to reduce government participation, increase private sector share in the generation and distribution of power, vastly improve generation and distribution and provide the base for much needed industrial infrastructure to have a strong foundation. It was also to enable regular, efficient and affordable electricity to the vast majority of Nigerians.
Before the sector was ‘privatised’, the level of electricity generation was 5,500mw.  The government’s projection was that by the end of last year, 2014, Nigeria would be generating over 10,000mw. 
However, at the end of last month, April 2015, figures provided by the Federal Ministry of Power showed that the country’s peak generation stood at 3,263.6mw; distribution level was put at 2, 88.72mw gross. Last week, these figures further plummeted to an abysmal 1350mw, and there were suggestion of an imminent nationwide system collapse. 
When it was done in 2013, the signing of transaction and industry agreements was regarded by many as the largest development in the power sector of Nigeria to date, and would lay the framework for substantial investments to be made into the Nigerian power sector to increase generation capacity, and expand the capacity of transmission and distribution networks.
What went wrong? There are several factors, mostly connected with the process of the privatisation programme itself, beside the reports of corruption that attended it.
Although the bidding process for the privatisation programme (unbundling of PHCN) was supposed to be transparent, political interference compromised it. Successful bids were selected therefore not on the basis of competence and track record, but because they presented the highest bids.
Over the years, successive administrations have concentrated their attention, and public funds, in virtually only one source of power, the national grid; this highly capital intensive area is where most of the corruption in the power sector takes place.
Addressing the problems of the sector would require a detailed and comprehensive study of what led to failures of the past; the incoming government can achieve this without getting bogged down in endless probes. These can be handled by public institutions that deal with criminal aspects of malfeasances involving public officers that do not require the say-so or approval of political heads.
Daily Trust recommends that the incoming Buhari administration refocuses attention on hydropower that has been neglected in the past in favour of gas and other fossil fuel sources that have become targets of frequent sabotages by criminal elements in the Niger delta region.  Solving the security and social challenges in the region could provide the environment for more gas-powered stations in many parts of the country to complement hydropower generation. Wind and solar sources are also potential addition to grid capacity when fully tapped.
While officials of the outgoing administration have warned the new government that it would be a mistake to reverse the privatisation programme, workers in the power sector on the other hand urge the Buhari administration not only to roll it back, but to also probe what they alleged was a scam. This administration now has a chance to uncover the reasons for the astonishing failure of successive regimes since 1999 to get rid of the rot in the power sector, despite committing colossal sums of money. Nigerians would desire to know, for instance, why, after spending billions of dollars in the privatisation programme, the generation and distribution companies have produced zero watt of power, but are still being paid millions of dollars, even when they default. This week’s buyback of Yola Disco by the federal government at nearly 39 million dollars is a case in point. Wholesale roll back of the privatisation exercise may not be a viable option. But reappraisal is called for; where breaches occurred that have led to bleeding of the treasury, those responsible should be held to account.