Power Sector Privatisation Not Designed To Succeed — Ajaero

The General Secretary, National Union of Electricity Employees (NUEE), Joe Ajaero, Friday said the privatisation policy of the federal government in the power sector was not designed to succeed, but to fail, stating that six years down the line, no megawatts had been added and no power plant had been built by either the investors or government.

Ajaero, who stated that this in Lagos during the 6th Quadrennial/11th national Delegates Conference with the theme: ‘Conference of Restoration’, said the investors were not ready to build the power plants, but only concerned about increasing tariff.

“We cannot agree to pay for what is not available. If you increase power generation, and distribution that will give you the latitude to say you are increasing tariff. There have been three attempts to increase tariff since after privatisation. If there was no power before now, $16 billion that was spent would have been useful in helping Nigeria achieve 16,000 megawatts at the rate of $1billion per thousand megawatts,” he noted.

The NUEE scribe said Nigeria was one of the countries down the ladder suffering from inadequate power supply , adding that the ideal thing is that “for every one million people, there must be 1,000 megawatts and that is why today South Africa is talking about 45,000 people to 45000 megawatts.”

He further stated that the indices in the country showed that there was less than 4,000 megawatts for about N200 million people and government wants the private sector to put in place certain measures to reposition the sector.

Ajaero added that: “This is the time to speak truth to power; they need to be more transparent and open in whatever that is happening in the power ministry. Nigerians should not expect steady power supply if the power ministers cannot come out to address Nigerians. I am calling on any of the ministers today to come out and tell Nigerians the situation in the power sector.

“The private sector doesn’t have the financial wherewithal to revitalise the sector. I have asked at what return on investment will an investor invest because before you finish a power plant, it will take four years and the investor may not have that patience. You cannot recoup investments on any power plant in less than 15 to 20 years.

There is need for a rethink on how to move the power sector forward, if there is no rethink in the next three or four years, the sector will collapse. If there is no power plant that is being constructed now that will come into the grid, the power sector will collapse and to avoid this, there is need for a review. The Generation Companies (Gencos) and Distribution Companies (Discos) borrowed money from banks to buy these establishments and they are returning the interest on these loans on Nigerians.

“The key focus initially was for foreign direct investments, but that did not work because of privatisation. The problem we are having with this discos is that at the end of the month, the bank they borrowed money from will take the money and they will be none left for payment of salaries or any other investment in the power sector. Government sold 60 per cent of the power sector and gave the investor 100 percent. Since 2003 till date, none of the investors have declared any dividend to government.”

Source: Thisday