Power Privatisation – Can Nigerians see the big picture?

By  Engnr . Y.S. Adamu

I wrote an article on the power privatization in the early days of this administration – Power Privatisation- Can Nigerians see the big picture? This article is a follow up to that one and is intended to confirm to Nigerians that finally the whole picture has emerged but unfortunately a CONFUSED one for that matter. The statement by the super minister in charge of the super ministry of power, works as housing carried out by all the major newspapers on 1stjune 2016 where the minister was quoted as saying that the power companies were sold illegally and as the same time the government cannot do anything about it. I read the story several times over to see if it was a gaffe, misquotation or a plain admission of mistake and failure or all of them. Whatever it is, I feel the super minister has goofed and that the denial of his statement within 24 hours is unfortunate. Earlier in his tenure the same minister said government would review the sale on case by case basis. These two conflicting and contradictory statements have created the confusing I am talking about and which I would like the minister to clear.

It appears that when things go wrong, our officials do not like to accept their failures and mistakes and would dodge and refuse to blame themselves.

I have several questions to ask the super minister to answer because we the people have the right to know exactly what happened. It is increasingly becoming obvious that power privatization is looking like a case of a battle between some powerful interests and their cronies in which the Nigerian people are the victims. My questions are:

  • As a lawyer and a SAN, an Ex-governor and now a minister did he in anyway whatsoever read and understood the provisions in the sale purchase agreements of these companies?
  • Has the Hon minister sought for clarification and advice from the legal department of the Bureau of Public Enterprise (BPE)?
  • Has the Hon Minister bothered to read the interview of the immediate past Executive Chairman of the Nigerian Electricity Regulatory Commission (NERC)- Mr. Amadi who said much earlier the PMB can reverse the sales of these companies.
  • Has the Hon Minister forgotten that the FGN is still the largest shareholder in these companies (40%). The other members of the consortium if seen from their individual holdings are minorities?
  • What about National interest? 170 million Nigerians are suffering and the economy of the country is at a critical tipping point.

Whatever the way the super minister thinks and other officials with similar views about the power privatization, the exercise is a fraud, flawed, crony stealing of public assets from beginning to the end and the minister is sounding like he is a beneficiary and the one who is protecting these so called new owners of the privatized companies.

Playing Political Ping-Pong with a Vital and Strategic National Infrastructure.

Let me say that I have not seen any country in the world that is GAMBLING with its most vital National Infrastructures like Nigeria. All pioneer National Infrastructures from telecoms, railways, airways etc have been destroyed in the name of privatisation.The country no longer has any heritage infrastructure that one can show. The sad story is that all the Billions spent from colonial days to today have gone down the drain. The only remaining infrastructure power is on the road- to- ruins and is the subject of this paper.

It is on record that since early 1990’s this country has been going through hell in the energy sector – unsteady fuel supply, power outage and general energy crunch and chronic shortage with their attendance huge consequences on the economic and social well being of Nigerians. The importation of generators has become a big business while pollution with its environment degradation continues Nigerians spend billions that would otherwise be used for other economic activity on fueling the generators and servicing them as well as buying Chinese lamps to light their homes. With all these, no serious attempts have been made to solve the problems-Billions of USD have been spent  on ‘’ Ghost-like projects’’ which have not added value to the infrastructure yet the contractors went home smiling while the ordinary Nigerians continue to scream and grumble with no any hope of getting relief and succor.

Adding fuel to the fire

With all the numerous and compounded problems various committees reports ( Lukman,s report, the 21 Billion USD power report) are set up and their findings  swept under the  carpet. A ‘’ reform’’ was introduced, adopted and implemented without addressing the numerous problems of the power system. The key thrusts of the reform is privatization and the main aim and objectives was to buy or sell the companies to corrupt officials through their cronies .Whatever the good side of the reform (if any) this reform  is sending the power sector into its grave. If care is not taken the power industry in Nigeria is heading to collapse.

The Ministry of Power itself has been going through butchering and unfair treatment from the past successive governments. It is almost the only ministry that has been merged with other ministries like petroleum and now with works and housing. I am not critising the administration of PMB for this but because I am not privy to the reasons given by the technocrats to do so. Whatever the reasons and the justifications for this  I wish to appeal to him to have a second thought about the present arrangement creating a super ministry with huge and many super problems would not take us anywhere rather it would confound the problems and would worsen an already bad situation further.

My appeal is that the power ministry deserves to be accorded respect by being a ministry on its own right. It is strategic importance to the economy of the country. The entire programmes for this administration resolve around the power industry. A mistake is made is not impossible to correct.

Wrong reasons and comparisons are being used to convince the government to press ahead with privatization of public asset. The example used and wrongly is the privatization of telecommunications. Let me say here that there was never privatization of telecommunication. NITEL which was supposed to be privatized ended liquidated .What happened in the telecom is liberation and opening the market for new operators to come in. the truth of the matter telecom was not privatized. I can proudly say I am in the thick of the NITEL privatization right from the start to the end of it.

The result of the liberalization allowed investors and operators to come into the country. These investors came, bided for licenses, paid for it. They built their infrastructure from the scratch and continued to build and improve on it, bringing new services and improving customer choice and care. These telecoms companies are being run and managed by top class managers of the 1st tier grade in telecom management. The telecoms were and are still making impact on their customers.

The power privatization is dubious, flawed and fraudulent. The new investors have not brought any investments and some of them acquired the companies without paying. There is no significant improvement in the technical and commercial situation of the companies. The new owner’s main preoccupation is in the finances of the companies. The customer’s woes, fury, agony, frustration continue while the new owners are reaping what they did not sow. There is no competition. While in telecom, there is a regulator who is using his regulatory stick even if not efficient to solve some customer complaints e.g. stopping unsolicited sms and other network problems, in the power sector, the regulator could not do his duties efficiently. Billing is still a problem. The system is characterized by outages; no alternative source (no competition at all) customers are forced to pay for what they did not consume. The Nigerians customers are held hostage by these new owners. There is virtually no corporate governance in these privatized companies. These companies are being managed by people who have no idea of what power business is. This is a recipe for disaster

States government and some senators are still buying and deploying transformers in a supposedly private enterprise. Just last week I was advert by the Kaduna state government to procure transformers. Does any state government buy a base station for any of the GSM operators?

CBN Intervention Fund –Bail Out or what?

The mother of all scandals in the power privatization is the CBN intervention fund for the privatized power companies. This intervention fund is more than the purported prize of the 60% stake. The question is does it make any sense for a private investor to get an intervention fund from CBN and what is it for. Despite this intervention fund there has not been any appreciable improvement since the new owners took over. The question is where does all the money go to? And did the CBN monitor how the money was spent? And how would the CBN recover this money?

I would continue raising questions and issues about the new owners handling these companies that would reveal the many factors that the government cannot ignore but justify the urgent need for review. Review would include but not limited to government takeover but investigating the whole process that led to choosing the winners, verification of the payments, forensic audit of the finances of the companies from take over date to date etc. Any new owner found to violate the Sale Purchase Agreement is held accountable and punished. Anyone who commits acts of illegality and fraud is charged.

This article was to be out few months ago and some many things have happened in between that made me to conclude the article, namely the advice of the Emir of Kano Sanusi Lamido Sanusi that the government do something about the Discos, reports that the Discos are broke etc. Apart from HRH SLS the overwhelming Nigerians that the privatisation is meant to benefit want this exercise reversed. My advice to the government and based on the fact that this government has put the need of the people above anything to do what is required by reviewing this power issue. The country is shortchanged and the industry is on life support. Doing nothing is not an option and that this government should not be seen to kill the power industry by refusing to rescue and salvage it. The Hope and Change mantra should without delay be focus on the power industry.

Finally a word of caution to the government about the whole privatisation exercise. It appears that the government is bent on the privatization exercise at all cost and we as people never learn lessons since we started and we are always in a hurry to do things that are sold to us by Europe and America but we do not do them right as they do in their countries. We must do our things properly if we are to move forward. We have been calling for investors to come but any serious investor that looks what the way we do our things will not come. I ask the government to have somber assessments of the exercise by addressing the corruption and other related lapses and correct them. Otherwise we shall continue destroying all of our infrastructures. The privatization agency needs total overhauling.

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