Privatisation in power sector has failed – Senate

Privatisation of the power sector in Nigeria has failed, the Senate declared on Wednesday.

To this end, the upper legislative chamber called for review of the privatisation of the power sector in the country on the grounds that Distribution Companies (DISCOS) are bankrupt and cannot procure metres for customers.

These were the submissions of senators at a debate on a motion sponsored by Dino Melaye (APC, Kogi West) which opened up how the frustrations in the power sector have further sabotaged efforts at reviving the economy.

Contributing to the debate, Chairman Senate Committee on Privatisation, Ben Bruce (PDP, Bayelsa State) faulted the manner in which privatisation of the power sector was carried out.

He asked the Senate to prevail on government to revisit the privatisation process.

“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.

“They also allude that the Federal Government will subsidise it. 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. We have a catastrophe in our hands, there will be no light in Nigeria under the current structure is revisited,” he said.

On his own part, Vice Chairman, Senate Committee on Power, Mustapha Burkar, (APC, Katsina State) called for state of emergency in the power sector because all the measures that had been adopted were not working.

He observed that distribution companies are the weakest point in the value chain, adding that the model adopted for the privatisation has failed.

“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 amount that is actually available is just over 4,000 Megawatts out of 12,500.

“We have transmission loss of 228, we have distribution loss of 447 Megawatts. At the end of the day, only 3,800 Megawatts reach the consumer. And we have commercial loss of more than 36 percent.

Melaye had in his motion noted that years after the privatisation of the power sector, the Distribution Companies 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 estimated billings.

He lamented that DlSCOs prefer to hound consumers with estimated bills by devising means and ways of smartly retrieving meters from customers in order to realise targeted profit margin through the imposition of arbitrary billing system usually referred to as ‘Crazy Bills’ by customers.


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