Just let there be light!

At a ceremony in Abuja, President Goodluck Jonathan presented the documents to the new owners of six power generation companies [gencos] and nine power distribution companies [discos], all of them spin-offs from the old Power Holding Company of Nigeria [PHCN]. All 15 companies had completed payment of their winning bids.Among those that received the certificates […]

At a ceremony in Abuja, President Goodluck Jonathan presented the documents to the new owners of six power generation companies [gencos] and nine power distribution companies [discos], all of them spin-offs from the old Power Holding Company of Nigeria [PHCN]. All 15 companies had completed payment of their winning bids.
Among those that received the certificates were Mainstream Energy led by Colonel Sani Bello, which took over Kainji and Jebba hydropower stations; Femi Otedola’s Amperion Power which took over Geregu power station, and Tony Elumelu’s Transcorp/Woodrock Consortium which took over Ughelli power station. Among the new discos owners are West Power and Gas [Eko disco], NEDC/KEPCO [Ikeja], 4Power Consortium [Port Harcourt], Vigeo Consortium [Benin], Aura Energy [Jos], Kann Consortium [Abuja], Integrated Energy [Ibadan and Yola] and Sahelian Power [Kano].
In the wake of the ownership transfers,  there were complaints that the firms had been sold for only $2.5 billion [N404 billion], even though government spent more than $20 billion [N3.2 trillion] in the last 14 years alone to give them a boost. An inquiry conducted by a House of Representatives committee in 2008-9 found that the Olusegun Obasanjo administration spent close to $16 billion on its power sector intervention programme, “without commensurate results,” as late President Umaru Yar’adua described it at the time. Not long afterwards, the Yar’adua/Jonathan administrations committed another $5 billion to the sector, most of it drawn from the Excess Crude Account. While the Obasanjo regime dipped its hands into this account owned by the three tiers of government without the consent of the state and local governments, the Yar’adua regime did obtain their consent on the grounds that the power projects were a national asset.
Despite all the huge investments in addition to regular budgetary provisions, Nigeria’s power supply situation remained at far below demand and epileptic at best. Nigeria generates less than 6,000 megawatts of power according to the latest government claims, although a worrying rider was added, to the effect that some of this cannot be evacuated from the power stations due to low transmission capacity. This is one-tenth of the power generated by South Africa for a population only a third of Nigeria’s, hence the need for a serious national soul-searching. The outcome was the current power sector reform programme which culminated in last weeks’ handing over ceremony.
At this crucial time, a national belly-aching campaign about the value of investment in the power firms as against the money recouped from their sale is totally unhelpful would be fruitless. It is clear now that the money said to have been spent on the sector mostly went missing, and the anti-corruption agencies must not relent to bring to book all the people that had a hand in those massive losses. The only way to look now is ahead, not back. What Nigerians’ hope is that the privatization of the gencos and discos, as well as the management leasing out of the Transmission Company of Nigeria [TCN] to a private Canadian firm, would do for the power sector the magic that private firms did to the telecommunications sector.
There is however some reason to worry, because apart from the obvious success of the telecoms sector [which was not a case of privatization but of ending state monopoly and allowing private investors to come in], other cases of privatized state firms since 2000 has not recorded similar success. Instead, in several cases, the new owners stripped the firms of choice properties and allowed them to founder on their main businesses. This must not be allowed to happen with the privatized power firms. The most important gain from this exercise would be not so much the money gained from the sale but the expected benefits to be obtained if the new owners maintained them well, invested heavily in them and helped to end the country’s critical power supply deficit. That alone would give the Nigerian economy a tremendous boost and all Nigerians will be the better for it. Hence the need not to dwell too much on lost monies, although the culprits for this should brought to book. The main issue now is there should be ‘light’.