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Senate Says Power Privatisation Has Failed, Mulls Review

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  • Senate Says Power Privatisation Has Failed, Mulls Review

Senators on Wednesday strongly criticised the privatisation of the power sector, saying the model adopted in the transfer of the assets from the Federal Government to private operators had failed.

The Senate, therefore, called for a review of the privatisation process to maximise the capacity of the sector.

The lawmakers, while speaking on a motion by Senator Dino Melaye titled: ‘Discos, electricity consumers and the burden of overbilling’, lamented the failure of the power sector even after it had been privatised.

Seconding the motion, Senator Bukar Mustapha stated that the problem with the sector was inefficiency.

He said, “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 5,300MW; we have non-operational capacity of 3,180MW; meaning that the amount that is actually available is just over 4,000MW out of 12,500MW.

“We have transmission loss of 228MW and we have distribution loss of 447MW. At the end of the day, only 3,800MW reaches the consumer, and we have commercial loss of more than 36 per cent. So, what is actually being paid for out of the over 3,000MW is only 1,800MW.

“So, unless and until we decide to look at this inefficiency within the value chain, there is no way we can have better electricity generation, distribution and also billing system in the country. So, I agree that the model they have used for the privatisation has not worked. And unless and until this inefficiency is looked at, it will not work.”

The senator further stated that if the sector had the capacity to generate 12,500MW but it could only deliver 4,000MW, it meant that more than 75 per cent of the capacity had not been utilised.

Mustapha added, “It means that we are sitting on an emergency situation and something has to be done drastically to address this problem.

“The value chain is weakest at the distribution companies’ level, because they are the ones who collect the money and you will never know how much money is being collected, because they have failed to install the meters that are needed. We need millions of meters.”

He recalled that some lawmakers visited a meter testing facility on Monday “because each meter has to be tested, but there is no capacity to test the millions of meters in Nigeria.”

According to him, the Discos are supposed to provide the meters but lack the funds and technical capacity to provide the devices, adding, “So, it means we have to revisit this as urgently as possible.”

Senator Ben Murray-Bruce said the power generation and distribution companies were privatised on the premise that they would charge cost-reflective tariffs and make the business profitable.

Murray-Bruce said, “Those who privatised the sector did not imagine that the naira will be devalued from N160 to N500 (to a dollar). Those who invested in the business thought it was like a company where they would 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.

“This is a serious problem. The way the privatisation process took place and 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 revisit the entire privatisation process and unless we understand and dissect what went wrong, we will still get estimated billings.”

“We have a catastrophe in our hands. There will be no light in Nigeria under the current structure. No hope in sight unless we revisit the process and try to understand what went wrong and bring in new players with the requisite capacity.”

In the motion, Melaye said the Senate was worried by the astronomical rise in the electricity bills across the country.

He added that years after the privatisation of the power sector, the Discos, which were retailing and marketing electricity, “have not been able to effectively meter their customers, thereby leaving millions of their customers at their mercy through estimated billing.”

Melaye further said, “The Senate notes also that with the privatisation of the power sector, many Nigerians hoped that things would get better, especially with regards to the improvement of power supply and the quality of services to be rendered.

“The customers had expected, upon the takeover by the new owners, that metering would be one of the issues that would be urgently addressed to restore confidence in the industry, as this is the only way to determine actual consumption. Instead, the Discos came with astronomical monthly increase in the name of cost-reflective tariffs.

“The Senate is saddened that the Discos prefer to hound consumers with jaw-dropping estimated bills by devising means and ways of smartly retrieving meters from customers in order to realise targeted profit margins through the imposition of arbitrary billing system usually referred to as ‘crazy bills’ by customers.”

But before the prayers of the motion were considered, the Chairman, Senate Committee on Power, Steel Development and Metallurgy, Senator Enyinnaya Abaribe, said the panel was already working on the issues in the power sector.

He urged the Senate to suspend debate on the motion pending the presentation of his committee’s report.

The Deputy President of the Senate, Senator Ike Ekweremadu, who presided over the plenary, ruled that the motion be stepped down pending the outcome of the probe by the Abaribe-led panel.

“It makes better sense that we consider the report and be free to make our comment based on the recommendations by the committee,” he said.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Government

Lagos- Ibadan Rail Project Delayed Due To Technical Issues- Amaechi

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The Minister of Transportation, Hon. Rotimi Amaechi, yesterday attributed the delay in inaugurating the Lagos-Ibadan rail project to infrastructural and technical issues within the seaport in Apapa.

This, according to him, would be resolved at a meeting involving all stakeholders and experts to proffer solutions to the problem.

Amaechi, during an inspection tour of the project within the seaport axis yesterday in Lagos, said he could not say exactly when the project would now be launched.

He said: “This project is very technical. If I have given you a timeline, how would I have found a solution to the customs building, so we are working hard to find these solutions; it is only after when the engineers have come up with proper solutions and time-based solutions that I can speak on time. Now I cannot speak on time until when that happens.

“You know, you can actually commission this project without that because it is not just one track, there are several tracks; that is one of the tracks we are going to fix. I am not an engineer, am just a policymaker; I am the head of the ministry.”

Amaechi, however, expressed the determination of the government to complete the project despite the challenges.

“All I am doing is to make sure that out of the three tracks one or two can get to the quays so that we can commission, pending when the other ones are completed as a result of challenges we are meeting inside the seaport. It means this is the difficulty we are having and we want to face them. The fact that we have not gone to other places means other places are functioning. But this one we have this crisis and we have to find a solution to it.

“We are going to have a meeting now, and in that meeting, everybody will be there both the experts and once we make a decision, then we can convey it to the public. We have about three tracks coming into here, is only one that we are having problems with.”

Managing Director of the Nigerian Railway Corporation (NRC), Mr. Fridet Okhiria, expressed the need to have the rail fully operational at the seaside of the port.

”The essence of the rail is to move freight, passengers and to provide service and we have to get to the port meaningfully, not just getting to the port. We have to get to the seaside so that the ship can load directly to reduce multiple handling of goods and by doing so it will reduce the cost of the movement because presently we now get ourselves in multiple handling.

“You have to pay for a truck to take it to the railway head that is why the minister is insisting that we must get to the seaside and which is the best way to go for Nigeria. We should earn more revenue and reduce cost and the goods will get to the market and eliminate double handling of goods,” he said.

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INEC Plans Expansion Of Polling Units For 2023 General Election

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Ahead of 2023 general elections, the Independent National Electoral Commission (INEC) has promised to make polling units accessible to the electorate to remove voter apathy during elections.

INEC Resident Electoral Commissioner (REC) in Kwara, Malam Garba Attahiru-Madami, made this known on Monday in Ilorin while declaring open two-day training on “Implementation of expansion of voters’ access to polling units”.

The News Agency of Nigeria (NAN) reports that the training was for Electoral Officers (EOs) and Assistant Electoral Officers (AEOs) in charge of Administration, Operations and Cluster Registration areas drawn from the 16 local government areas of Kwara.

He noted that many eligible voters refused to vote on election day because of the distance of polling units to their residences.

The REC told the participants that the training was very important to INEC, just as election was important, adding that without polling unit, there would be no election.

“Election start from polling unit, if there is no polling unit, there would be no election and collation, that is how important polling unit is,” he added.

He therefore charged the participants to take the training very serious as the outcome of the training would offer opportunity on what they would do on the field.

“I don’t need to re-emphasise why access to polling unit is very important. We already know that this exercise was carried out in 1996 and it was to serve 50 million voters.

“In 2019 election, we have greater voters of 84 million; you can see that the polling units now are grossly inadequate.

“By the time general election will take place in 2023, our projection is to have over 120 million voters.

“The number of polling units we have now cannot serve the 120 million voters, so the training is very important,” he said.

According to the REC, one of the reasons for voter apathy is because the polling unit was not accessible to them.

He said that some polling units have over 1,000 to 5,000 voters that were spread to polling points.

“So, we want to see how we can convert some of these voting points to polling units to meet the need of the people on election day.

“In some communities with communal clash, having their own polling unit would solve such conflict, because you will see a villager that will say, I will not go to that village to vote,” he added.

He said the idea of expansion of polling units was to remove voter apathy and reduce distance from home to the polling unit. (NAN)

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African Union Holds Global Conference to Accelerate African Vaccine Development and Manufacturing Capacity

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African leaders assembled at a global meeting to discuss the status of local pharmaceutical manufacturing on the continent, underscored the need to increase local production of vaccines and therapeutics to achieve greater public-health security.

“The production of vaccines and access to vaccines is an absolute priority,” Cyril Ramaphosa, President of South Africa, said Monday in opening remarks at the start of the two-day virtual meeting, convened by the African Union.

The meeting was attended by several African heads of state, health, finance and trade ministers from across the continent, as well as officials from global financial institutions, foundations, pharmaceutical manufacturers, business leaders, and the general public. The African Development Bank was represented by Solomon Quaynor, Vice President Private Sector, Infrastructure and Industrialization.

Although Africa consumes approximately one-quarter of global vaccines by volume, it manufactures less than 1% of its routine vaccines, with almost no outbreak vaccine manufacturing in place. The region lags behind in procuring vaccines amid a global scramble for the medicines among wealthier nations. Thus far, only around 2% of the world’s vaccination against Covid-19 has taken place in Africa.

The need for a new public health order in Africa, which promotes domestic vaccine manufacturing, epidemic preparedness and upgraded healthcare systems to meet the needs of the world’s fastest-growing population, was the conference’s main objective.

The African Union and the Africa CDC said they would continue to work with all stakeholders to identify implementable actions, financing needs and timelines to competitively produce vaccines in Africa.

Quaynor noted that the current undertaking would require immense investment. “Vaccine manufacturing, because of its complexity, is not really an entrepreneurial drive but actually an institutional drive,” he added.

The African Development Bank is working with global and African stakeholders, to articulate a 2030 vision for Africa’s Pharmaceutical Industry in response to several calls received from African Heads of State, who have expressed a strong political will. This vision aligns with its “industrialize Africa” priority strategy.

The vision will build on previous efforts to produce a continental plan of action to boost local African pharmaceutical manufacturing capacity, such as the Pharmaceutical Manufacturing Plan for Africa adopted in Abuja in January 2005 and the Pharmaceutical Manufacturing Plan for Africa (PMPA), prepared by the African Union Commission and the United Nations in 2012, to assist local manufacturers with pharmaceutical production.

Quaynor said Africa could count on the African Development Bank’s support to secure Africa’s health defense system. “Leveraging on our comparative advantages, we will both provide upstream support to governments on the enabling environment, as well as provide financing to private sector and PPPs both indirectly through some of our private equity investee funds and directly through lending, and credit and risk guarantees. We will also use the Africa Investment Forum to bring in all relevant stakeholders and partner DFIs into bankable opportunities…”

The 2030 vision for Africa’s pharmaceutical industry would also work with pharmaceutical industry associations in Africa to create capacity development links between universities and industry in Africa, and work with African scientists in the diaspora, Quaynor said in remarks made on behalf of African Development Bank President Akinwumi A. Adesina.

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