Hard facts, on Wednesday, emerged about Nigeria’s epileptic power sector on the floor of the Senate. During a debate on the poor power situation in Nigeria, senators concluded that the sector is in a comatose situation and in dire need of an emergency response.
Senators also claimed that the distribution companies are bankrupt and cannot procure meters. They therefore called for the entire privatisation of the power sector to be revisited.
The submissions were made at a debate on a motion sponsored by Senator Dino Melaye, which revealed how the frustrations in the power sector is further sabotaging efforts at reviving the economy.
Contributing to debate on the matter, Senator Ben Murray-Bruce, who represents former President Goodluck Jonathan, said the manner in which the privatisation was carried out, operators in the power sector are in serious difficulty.
Senator Bruce blamed the administration of Jonathan and claimed that the privatisation exercise was not transparent. He recommended that the Senate should prevail on government to revisit the privatisation.
On his own part, Senator Mustapha Burkar from Katsina State, said Nigeria was sitting on emergency in the power sector, adding that all the measures that had been adopted were not working.
He observed that the value chain is now at its weakest point. Mustapha, who is the vice chairman of the Senate committee on power, said: “The problem we have is the inefficiency within the system which we have actually so far not decided to address. I will give you a small example: Nigeria has an installed capacity of 12,522 Megawatts of power. We have non-available capacity of 5,300. We have non-operational capacity of 3,180; meaning that the The law maker continued: “We have transmission loss of 228, we have distribution loss of 447 Megawatts. At the end of the day, only 3,800 Megawatts reaches the consumer. And we have commercial loss of more than 36 percent.
“So, what is actually being paid for out of the over 3,000 Megawatts is only 1,800 Megawatts. So unless and until we decide to look at these inefficiency within the value chain there is no way we can have better electricity generation, distribution and also billing system in the country. So, I agree that the model they have used for privatisation has not worked. And unless and until this inefficiency looked at, it will not work.
“If we have capacity to generate 4,500 Megawatts but we can only get less than 4,000 that is more than 75 percent of the capacity is not ulltilised. It means that we are sitting on an emergency something has to be done drastically to address this problem. The value chain is weakest at the Discos because they are the ones who collect the money. And you never know how much money is being collected because they have failed to install the metres that are needed. We need millions of metres.”
Bruce in his detailed submission on the problems confronting the power sector declared that: “The problem we have with the power sector is that the generating companies and the distribution companies were privatised a few years ago on the premise that they will charge cost reflective tariffs to make it profitable.
He disclosed that those who privatised the sector did not imagine the naira will be devalued from N160 to N500 to the dollar.
According to Bruce, “Those who invested in the business thought it was like a company where they will make a lot of money. I believe they only had enough money to pay the federal government and make the initial investment; they did not have the capacity to run a power sector company in a modern economy.
“Now, they brought a bill of 1 trilion naira they are not saying the federal government again. They say we owe them a trillion naira. This is a serious problem. The way the privatisation process took place, the difficulties we have. There is no solution in sight. They don’t have the money to buy the meters. They are technically bankrupt. Unless we visit the entire privitastion process. Unless we understand and dissect what went wrong, we will still get estimated billing.”
Bruce added: “We have a catastrophe in our hands, there will be no light in Nigeria under the current structure is reviewed. No hope in sight, unless we revisit the process and try to understand what went wrong and bring in new players with the capacity, the people in place now.”
Melaye had in his motion noted that years after the privatization of the power sector. the Distribution Companies (DISCOs) handling the retailing and marketing of electricity in the Nigerian Electricity Supply Industry have not been able to effectively meter their customers thereby leaving millions of their customers at their mercy through estimates billings.
He lamented that DlSCOs prefer to hound consumers with law-dropping estimated Bills by devising means and ways of smartly retrieving meters from Customers in order to realize targeted profit margin through the imposition of arbitrary billing system usually referred to as “Crazy Bills” by customers:
Melaye said that available and affordable electricity is supposed to be a right and not a privilege as section 24 (2)(b) of the 1999 Constitution of the Federal Republic of Nigeria as amended stipulates that “the security and welfare of the people shall be the primary purpose of Government.”amount that is actually available is just over 4,000 Megawatts out of 12,500.”
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