Fashola Requested To Account For Post-Privatisation Spending On The Power Sector

Babatunde Fashola, SAN, Minister of Power, Works and Housing has been sent a Freedom of Information request from Socio-Economic Rights and Accountability Project (SERAP) asking him to use his good offices and leadership position to urgently provide information on specific details of spending on the privatisation of the electricity sector and the exact amount of post-privatisation spending to date, and to explain if such spending came from budgetary allocations or other sources.

The organization is also seeking “information on the status of implementation of the 25-year national energy development plan, and whether the Code of Ethics of the privatization process which bars staff of the Bureau of Public Enterprises (BPE) and members of the National Council on Privatization (NCP) from buying shares in companies being privatized were deliberately flouted.”

In the letter dated 7 May, 2018 and signed by SERAP’s Executive Director, Adetokunbo Mumuni, the organization said, “Since the privatisation of the power sector, the government has continued to use public resources to subsidize private entities. The Goodluck Jonathan government reportedly spent over N400 billion on the power sector while the present government spent over N500 billion on the sector despite privatisation. It is unclear if this spending is drawn from budgetary allocations and if these are loans to generation companies (GENCOS), Distribution companies (DISCOS) and Transmission Company of Nigeria.”

The organization said, “Assuming the funds are given as loans, SERAP would like to know whether appropriate guarantees have been provided to secure such loans, and whether such loans provide value for money for Nigerian tax-payers. Publishing details of spending on privatization of the power sector and post-privatization spending on GENCOS and DISCOS would serve the public interest and provide insights relevant to the public debate on combating corruption in the power sector as well as help to improve citizens’ access to regular and uninterrupted electricity supply.”

According to the organization, “If the requested information is not provided to us within 14 days of the receipt and/or publication of this letter, the Registered Trustees of SERAP shall take all appropriate legal actions under the Freedom of Information Act to compel you to comply with our request.”

The organization expressed concern that “the privatization of the sector and unbundling of the Power Holding Company of Nigeria (PHCN) into different generation, distribution and transmission as well as post-privatization spending and the identities of those who bought GENCOS and DISCOS have remained shrouded in secrecy.”

The letter read in part: “The privatization of power assets has already caused major crises, ranging from illiquidity, load rejection, metering, corrupt practices, lack of gas to power the stations, disinterestedness of investors, lack of injection of fresh capital after acquisition of financing, tariff interest, consumer apathy, foreign exchange hostilities, and sundry issues.”

“Most of the companies that won the bids had no prior experience in the power sector and little or no capacity at all to manage the sector. The privatization of PHCN would appear to have yielded the country total darkness. SERAP is concerned that gains of privatization have been lost through alleged corruption, manipulation of rules and disregard to extant laws and lack of transparency in the exercise.

“The goals of privatization have been marred by the sale of the sector to preferred bidders that could not pay the bid value on the sale, instead the PBE encouraged the deferment of payment and restructuring of payment terms in contravention of bidding rules to the disadvantage of other bidders. Most of the acquiring companies only managed to put together acquisition finances without potent capacity to source or attract post-acquisition funding to upgrade the generation and distribution infrastructure.

“Government has had to further intervene by way of funds ejection, guarantees and assurances despite privatizing those assets. Nigerians are also entitled to the right to truth derived from the obligations of the government to carry out an investigation of allegations of corruption committed within its jurisdiction; to identify, prosecute and punish those responsible; and to ensure that victims have the simple and prompt recourse for protection against violation of fundamental rights, as well as to ensure transparency in public administration.

“SERAP believes that the right to truth allows Nigerians to gain access to information essential to the fight against corruption and in turn development of democratic institutions as well as provides a form of reparation to victims of grand corruption in the country. International human rights and anticorruption standards impose limits or conditions on the way a given process of privatisation is carried out. In fact, the UN Committee on Economic, Social and Cultural Rights in its General Comment 3 has implied that privatisation process should not be detrimental to the effective realization of all human rights.

“By Section 1 (1) of the Freedom of Information (FOI) Act 2011, SERAP is entitled as of right to request for or gain access to information, including information on post-privatization spending by the Federal Government and accounts of spending by the private entities such as GENCOS and DISCOS. By Section 4 (a) of the FOI Act when a person makes a request for information from a public official, institution or agency, the public official, institution or urgency to whom the application is directed is under a binding legal obligation to provide the applicant with the information requested for, except as otherwise provided by the Act, within 7 days after the application is received.

“By Sections 2(3)(d)(V) & (4) of the FOI Act, there is a binding legal duty to ensure that documents containing information relating to the spending on privatization of the power sector and post privatization spending on GENCOS and DISCOS are widely disseminated and made readily available to members of the public through various means. The information being requested does not come within the purview of the types of information exempted from disclosure by the provisions of the FOI Act.

“The information requested for, apart from not being exempted from disclosure under the FOI Act, bothers on an issue of national interest, public concern, interest of human rights, social justice, good governance, transparency and accountability.”

Osinbajo Launches Plan To Boost Agriculture And Power Sector

Vice President Yemi Osinbajo on Tuesday In Abuja, launched the Economic and Growth Recovery Plan (ERGP) Focus Laboratories on power, agriculture and manufacturing to fast-track economic growth.

Osinbajo disclosed that the newly inaugurated Focus Labs would further boost economic growth and ensure that Nigeria continued its journey of building a competitive economy.

“The labs will operate by bringing together all private and public sector officials to achieve the ERGP’s objective of reaching seven per cent economic growth by 2020.

“The Focus Labs are being conducted in three selected areas to accelerate investment and job creation.

“These specific areas are agriculture and transport, manufacturing and processing and finally power and gas sector,” he said.

Osinbajo explained that the laboratory groups were meant to bring private/public sector participants and potential investors together to think through the implementation of the specific areas of focus.

“We believe that working together as a group, we will be able to achieve these specific objectives that have been set out for us,” Osinbajo said.

Sen. Udo Udoma, Minister of Budget and National Planning, said the government was far from achieving the targets captured in the ERGP.

He said government planned to improve power generation and its operational capacity to 10 Gigawatts by 2020, but two years to the deadline, it had only succeeded in generating four Gigawatts.

Udoma said the Focus Laboratories would eliminate the bottlenecks that hinder private sector investment in the agriculture, manufacturing and power sector.

He said this was important because 245.1 billion dollars was required to implement the ERGP, out of which 195.98 billion dollars was expected from private sector and 49.15 billion dollars from the public sector.

Udoma said the three main objectives of the initiative were to create new investment opportunities for critical projects, job creation and resolution of complex inter-agency problems that inhibited private sector investment.

The highlight of the event was the inauguration of the Central Steering Committee which comprised all ministers, permanent secretaries of Ministries of Budget and National Planning as well as representatives of the Vice-President’s office.

He also inaugurated the Core Working Groups for Agriculture and Transport, manufacturing and processing as well as Power and Gas Supply, headed by their respective ministers.

 

Residents Berate IBEDC Over Blackout

Residents of Communities affected by the blackout in Olorunda and Osogbo Local Government Council Areas of the State of Osun have berated the management of Ibadan Electricity Distribution Company for paralysing commercial activities in their areas. It would be recalled that some communities in the affected local governments including Testing ground, Orita Sabo, Aderin, Oluode, Ayetoro, part of Owode, Iludun, Oke Odo, Kola-Balogun and Atelewo have been without electricity supply since the 5th day of September 2017 a situation that made living difficult for them.

 

According to a resident, Mrs Sadiat Idowu “since the electricity has been faulty, I cannot express how tough life has been for me, because I am mostly surviving on selling cold drinks like water, soft drinks and since the blackout issue over a month now, it has been very difficult to make ends meet”. Another resident who pleaded anonymity also condemned IBEDC, saying it has caused his business a lot of damage being the owner of a frozen store at Oluode market.

 

“I cannot quantify the amount of loss I have incurred since the blackout even with the fact that I operate on generator daily, I still record a lot of damaged product. The situation is just very pathetic for many of us who own businesses in the affected communities”, the source added. A technician affected by the situation, Mr Sunday Oni also stated that the blackout has rendered his business redundant and has made life difficult for his family as he has been unable to fend for them for three weeks.

 

Another resident also said, “It is very unpleasant and difficult for me to live without electricity because I cannot be sleeping in darkness and as a result of this, I cannot estimate what I have spent on petrol everyday”. The Baale of Aderin community, Alfa Waheed Salam charged the management of IBEDC to as a matter of urgency come to the aid of the affected communities by speeding up work on the replacement of the damaged conductors, with a view to making life more conducive for the masses.

 

He added that the lack of electricity on the transmission lines has been leading to stealing of cables in some areas which would eventually lead to other expenses if power is eventually restored to the areas. The various residents of the affected communities also pleaded with the appropriate authorities to implore IBDEC management not to abandon the communities in perpetual darkness for the sake of security of lives and properties in the respective communities.

Discos Remain Our Biggest Challenge In Power Sector – Osinbanjo

The Nigeria Vice President Yemi Osinbajo has announced that electricity distribution companies (DisCos) have become a major problem for the nation in the power sector.

Osinbanjo gave the assurance that the present administration was addressing their menace using various initiatives including Independent Metering Directive, which would make it possible for consumers to be metered by private firms and the willing-seller-willing-buyer policy or Eligible Customer directive.

Those metering firms will then be paid from the bills collected from such meters by the DisCos while the new Eligible Customer directive, would enable the Electricity Generation Companies (GenCos) to sell electricity directly to certain categories of consumers without passing through DisCos, thus eliminating the huddles into which Discos have constituted themselves.

Speaking at the commencement of 2017 Nigeria Economic Summit in Abuja, Osinbajo agonised that although Nigeria has the capacity for about 7,000 megawatts of electricity, the Discos have made it impossible to transmit that volume to starved consumers.

“There is a renewed confidence in the sector and we have already seen significant investment for a variety of reasons including shortage of gas, limitations in the retransmission capacity, financing constraints, power supply was in the region of 3,000 mw.

“We tackled these issues, although there is still some inadequacies in power supply. We moved up to 7,000mw in generation terms. We are at the moment dealing with constraints in distribution with two notable policy interventions: The NERC in August issued eligible customer directives and will this month issue a directive on independent metering.

“The Eligible Customer regime will allow willing seller in the arrangement for sale of power, while the Independent Metering Directives allow independent entities from registered Power Distribution companies to sell and install meters to customers and pay as collections are made from metered customers.

“This will break the distribution gridlock. I have a good cause to believe that we will not just archive our 10,000mw projections envisaged in the power reform plan but also be able to deliver the 10,000mw.”

He noted that government also crafted several policy actions to ensure Nigerians consume what they produce and produce what they consume as much as possible.

Osinbajo said the Single-window policy would be on stream within months and that as such the concerns about delays at the nation’s ports would be effectively addressed.

“Government’s annual budgetary expenditure of N7 trillion, it is only a small part of what is multi-trillion naira economy.

“The private sector is clearly a bigger contributor to the economy and it follows that the private sector must be enabled and encouraged to play a decisive role if our development efforts are to succeed.

“The economy has returned on a continuous slide over a period of one year. Now we know we exited recession in the second quarter of 2017 with modest GDP growth of 0.55 percent, while inflation has continuously declined from a peak of 18.6 percent in January 2017 to 16 percent today.

“Last year, there were concerns about exchange rate and deteriorating exchange rate, but today the situation has been stabilised, that exchange rate has risen to over $32 billion and end users have increased access to foreign exchange partly due to export earnings, remittances as well as dedicated transparent window for investors and exporters, NIFEX.

Also speaking at a panel discussion, Chairman of Heirs Holdings, Mr Tony Elumelu, advised the government to review the privatisation of DisCos with a view to recovering controlling shares.

This way, federal government will then be able to sell such controlling shares to new investors with requisite technical expertise and financial muscle to efficiently run the companies.

Fashola Refuses To Call Off Privatization Of Power Sector

The Minister of Power, Works and Housing Babatunde Fashola has said he will not back down from the privatisation of the power sector.

Fashola emphasised that he would rather insist on follow-up of the on-going reform in the maximum benefit of Nigerians.

In Fashola’s address During the executive session at the third edition of National Council on Power (NACOP), said: “Let me set the context by once again reminding all of us that the power sector has been privatised and is largely in the hands of the private sector.

“Therefore, the work that needs to be done is largely the responsibility of the private sector.

“Our role as governmental institutions at Federal and state levels is to implement the laws, enunciate policies and take actions that help the private sector play its part effectively.

“Our roles in this regard are well set out in the Electric Power Sector Reform Act 2005 pursuant to which the privatisation of the power sector took place. That law, which I urge everybody to read, clearly sets out my role as minister, which is to administer the law in Section 100.

“As we are all aware, there have been comments about how effective privatisation has been in the power sector and some people have called for its cancellation, which I disagree with.”

He added: “However, I agree that there are problems, I understand that four years post-privatisation is a transition period, and some more work needs to be done before the expected benefits of privatisation come to fruition.

“That is why we developed the Power Sector Recovery Programme (PSRP), which are a set of policies, programmes and actions aimed at solving generation, transmission, distribution, liquidity, metering, estimated billing, energy theft, safety and other challenges.

“While we are beginning to see results of increased generation up to 7001MW on September 12, 2017, Transmission up to 6,700 MW and Distribution 4,600, it is not yet enough.”

The challenged states and local governments to be ready to play their own role in ensuring the power sector reforms succeed in the interest and growth of the country.

Fashola said the largest beneficiaries of the power sector reforms were Nigerians.

The minister said: “Among some of the reform actions contained in the Power Sector Recovery Programme being undertaken at Federal Government level, there are other areas of reform, where progress will be defined by what happens at the state and local government and this is one of the reasons why we chose to discuss this theme at this council, where all the states are represented.

“For example, out of the estimated MDA debts of about N90 billion claimed by the DisCos, only about N27billion has been verified as debts owed by the Federal Government. There are invoices which show that other parts of the debt are attributable to service points at states and local governments.

“I will urge first that states and local governments insist that their buildings are metered so that they can budget for and pay for the energy they use. It will turn out to be cheaper than diesel-generated power. It will also help reduce the loss of income by DisCos.”

Fashola Dispels Talks Of Nationwide Power Shutdown

The Minister of Power, Works and Housing, Mr. Babatunde Fashola, has faulted the recent statement by the Managing Director and Chief Executive Officer, Egbin Power Plc, Mr. Dallas Peavey Jr, that the country’s power woes may worsen in the days.
Peavey Jr had said the nation may experience total blackout due to liquidity and gas supply issues, threatening that owners of the plant might be forced to consider shutting it down if the challenges remained unresolved.

However, Fashola described the statement as “inflammatory and insensitive to Nigeria’s national security.”

The minister made this known at the opening ceremony of the Power Nigeria Agenda 2016, yesterday in Lagos.

Dispelling the remarks, Fashola said: “The statement is inflammatory and it was insensitive to our national security.”

Speaking further, he said: “If the commentator was not introspective, he would mention that the debts were not incurred by this administration, and that debt and settlement are continuous events in the power value chain, bills are served, claims are made, they are verified and settled.

“Also, he would have spoken about approval and payment that have been made this year. It is a continuous verification for claims and settlement of debts.

“All of the debts that are owed and legitimately contracted, verified will be paid. There is a clear policy decision in that area, but it requires all operators, those who claim and those who have to pay to operate in a transparent manner. We will not pay debt that are not properly verified and accounted for.”

He, however, refuted claims that the grid was very fragile and cannot support 1300MW not to talk of 5000MW.

He said the grid currently had the capacity to support 5300MW which is expanding on a daily basis.

“We are synchronizing with the Generating Companies and the Distribution Companies (DISCOs) in order to ensure the service end that connects both, which is the Transmission Company of Nigeria is able to respond adequately on demand.

“These are some of the serious issues that we take up at our monthly power meeting. Our next meeting will hold in Sokoto,” the Minister said.

Just recently, the minister ordered electricity Distribution companies (Discos) to stop customers from buying transformers.

FG Signs Deal On Electricity Facilities Upgrade With Japan

The Federal Government yesterday sealed a pact of $11m (N2.17bn) with the Japanese Government for an emergency improvement of electricity supply facilities in Abuja.

The project to be implemented by the Japanese International Cooperation Agency and the Ministry of Power is aimed at procuring and installing power capacitor banks at the existing two sub-stations in Abuja and neighboring Nasarawa state.

This, according to the agreement, would decrease the transmission loss and assist in stabilizing power supply to approximately 7,000 households within the Federal Capital Territory.

The Minister of Budget and National Planning, Senator Udo Udoma, signed the pact on behalf of the Federal Government while the Ambassador of Japan to Nigeria Sadanobu Kusaoke, signed on behalf of his country.

Speaking at the event, Udoma said the pact marks the process for effective implementation of the electricity supply facilities grant project by the Japanese government.

He noted that the project has been designed to support Nigeria in promoting social-economic and infrastructural development.

FG Targets 7,000 MW One Year After Budget Passage

The Federal Government says it will optimise 7,000 megawatts installed power generation capacity and provide facilities required to transmit and distribute it in one year.

This is contained in a Ministry of Budget and National Planning document titled: “Strategic implementation plan for the 2016 budget of change”.

According to the document, government will distribute the capacity through privatisation and concessioning under its priority strategies in power, rail and roads sectors.

The statement said it would include tariff of all costs of transmission, generation and gas at new price and that DISCO cost required operating, maintaining and upgrading distribution network.

It said: “The government will complete the Kaduna-Abuja and the Ajaokuta-Warri rail lines scheduled for 2016; revise the National Rail Master plan and finalise negotiations for Lagos-Kano and Lagos-Calabar rail projects.”

It seeks to ensure delivery of 2,192 kilometres of federal roads across 31 projects scheduled for 2016 (through public works and other interventions) and explore Private Public Partnership options for completing other projects.

It would resolve all issues on gas pricing, tariff and payment assurance, and also conclude road map on gas development.

Other major strategies in the implementation plan include the areas of policy, security, governance, diversification of the economy, oil and gas reforms.

It stated that under the oil and gas plan, government had set deadlines to achieve self-sufficiency and net export of a certain number of agricultural produce and items.

The document listed tomatoes, vegetable oil, cashew nuts, ground nuts, cassava, poultry, fish and livestock as the items.

It would revitalise and expand agro-allied processing, increase manufacturing capacity through operationalisation of industrial parks, free and export processing zones.

The document added that government had developed and adopted a road map to stimulate investment into the solid minerals sector.

It also developed and adopted a road map to stimulate investment in tourism and entertainment sectors.

Strikes In Power Sector Cost FG N7.7bn Between 2014-2016

Mr Babatunde Fashola, the Minister of Power, Works, and Housing, has stated that the Federal Government lost N7.7 billion from 2014 to 2016 due to strikes by government workers.

This is contained in a statement signed by the Minister on Thursday, made available to the News Agency of Nigeria (NAN) in Abuja.

According to the statement, the Federal Government, from April 28 to May 2014, lost N576 million due to the strike by Benin Electricity Distribution Company staff union.

It stated that government on June 11, 2014 lost N66 million due to NLC strike that resulted to the sealing-off of Port Harcourt Electricity Distribution Company office over sack of 134 workers inherited from PHCN.

It stated that government also lost N144 million due to strike by NLC from Feb. 8 to 10, 2015 in Benin DISCO.

It added that from May 7 to 9, 2015, the strike by Nigerian Union of Electricity Employees (NUEE) led to government losing N65 million.

It also listed other losses incurred by the Federal Government due to incessant strikes in the energy sector, to include the strike by Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) on May 22, 2015 which cost the government N2 billion.

The statement urged the workers to unite with their employers and see themselves as part of the government.

It added that the employees could not have become union members if first they were not employed by the government.

It added that government could not improve the welfare of its workers if it continued to loose much of its revenues to strikes. (NAN)

UNILAG Shut Over Poor Water And Power Supply

The management of the University of Lagos, yesterday, ordered the immediate closure of the institution, ‎following students’ protests over epileptic power supply and poor water supply.

The school in a circular said the closure was also due to the difficulties faced by the “large number of students” living off campus to attend classes as a result of the lingering fuel crisis.

“Senate noted that the problem of poor municipal service is a national issue that the governments at both state and federal level are addressing,” the circular stated.

The university management said it was suspending all academic activities on campus to forestall further breakdown of law and order.

It also ordered the students to vacate their halls of residence on or before 10am on Friday, April 8, 2016.

“A decision to re-open for normal academic activities will be made as soon as municipal services improve.

“All members of the University community are enjoined to go about their normal activities as adequate security measures have been put in place,” the circular added.

TCN Explains Thursday’s Power Collapse

The Transmission Company of Nigeria, TCN, yesterday, explained that the nationwide total system collapse experienced at 12:35pm on Thursday, was caused by the tripping of Osogbo/Ihovbor and Ihovbor/Benin 330kV transmission lines, which resulted in loss of 201MW generation from Ihovbor power station.

The Management of System Operation/Market Operation (SO/MO) of the TCN, in a statement yesterday explained further that the generation and load imbalance that ensued, defined by sudden decline in system frequency, culminated in the Collapse.

According to TCN, “Total grid generation at collapse inception was 3,196.0MW. The low generation at the time was due to shortage of gas supply to generators.

“The transmission grid is characteristically susceptible to system collapses when generation is below 3,500MW and the available spinning reserve capacity is low.

“TCN is working assiduously to consolidate the gains recorded in system stability, which is evident from the substantial reduction of system collapses from 22 in 2013 to 9 in 2014 followed by 6 in 2015.

“A substantial number of these collapses are attributable to low system generation due to gas supply issues which impacts stability.

TCN recalled that “The improvement in system stability is also evidenced by the fact that TCN has been able to wheel maximum energy of 109,372MWH on 2nd February, 2016 while the peak power transferred on the same day was 5, 074 MW.

“The System Operator, TCN regrets the inconvenience caused by the collapse.”