FG probes extension of DisCos’ licenses

…says privatisation not the right way to go

 

The Minister of Power, Adebayo Adelabu, on Wednesday said privatisation was not the right way to go for the country, rather commercialisation would have been better.

The minister, who stated this during an interactive session with journalists in Abuja, also said the government has opened investigations into the legality of the extension of the licences of the distribution, stressing that the copy of the licence with the ministry of power was expected to expire this December.

Adelabu disclosed that an increase in electricity tariff is not immediately on the cards as the political situation of the country demands that there must be improvement in the quality of power supply.

He decried that over 90 per cent of the electricity being generated in the country, which he put between 50-90 megawatts, comes from diesel and premium motor spirit generators.

Recall that on November 1, 2013, the Federal Government through the Bureau of Public Enterprises privatised the power sector for a whopping $2.5 billion. Since the privatisation, everything has been going south as the nation’s electricity grid, which was projected to hit 40,000 megawatts in 2020 with an investment of $3.5 billion yearly, remained at an average of 4,000MW as of yesterday.

Going by previous plan, the 17 licences sold to the generation and distribution were supposed to have been revoked or renewed on that first of this month, only for the Nigerian Electricity Regulatory Commission (NERC) to disclose that the licences were extended by five years.

Adelabu said the current government and the present management of NERC did not do the extension, as he added that the legality is currently being questioned and the process under investigation.

Notwithstanding, Adelabu said the government would review the performance agreement signed with the sector, stressing that a new agreement is sacrosanct given the poor performance of the sector.

“I don’t think privatisation was the right way to go. I have said it before and I will maintain my stand. Countries know the importance of electricity to the growth and the best thing would have been commercialisation,” Adelabu said.

He said the Federal Government would prioritise off-grid solutions while trying to resolve the challenges with the transmission of electricity.

Noting that Zungeru and a number of other hydro power plants would be added to the grid in the coming weeks, Adelabu disclosed that the Federal Government is looking at prioritizing small hydro power plants that can be easily dispatched without necessarily going through the grid.

Adelabu who also stressed the need for collection efficiency to improve in the sector disclosed that a roadmap to the solution of the sector should be collective and collaborative.