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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

Mali Sworn In Bah Ndaw as Transition President

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Mali’s interim president, Bah Ndaw, chosen to head a transitional government following a coup last month, was sworn in during ceremonies in the capital Bamako on Friday, AFP journalists witnessed.

A committee appointed by the junta which seized power on August 18, toppling President Ibrahim Boubacar Keita, selected Ndaw, a 70-year-old retired colonel, as interim president.

Ndaw is due to lead a transition government for a maximum of 18 months before organising national elections.

Colonel Assimi Goita, who led the military junta, was also sworn in as interim vice president.

The ceremony on Friday took place in a theatre filled with officials dressed in military fatigues, senior judges, and foreign diplomats.

During the ceremony, Supreme Court Chief Prosecutor Boya Dembele said the challenges facing both men were “enormous”.

“It will truly require a reformulation of the state,” said the judge, dressed in red fur-lined robes.

The swearing-in comes as the fragile Sahel state’s neighbours have leaned on the military junta to appoint civilians as interim president and prime minister.

The 15-nation Economic Community of West African States (ECOWAS) slapped sanctions on the poor country on August 20 to push for a swift return to civilian rule.

A decision by the bloc on whether to ease the measure is possible on Friday, according to former Nigerian president and ECOWAS mediator Goodluck Jonathan.

“We are optimistic that this event will signal the beginning of the return to normalcy in Mali,” he said on Twitter on Thursday night, referring to the swearing in of interim-government leaders.

Last month’s coup followed weeks of mass protests against Keita, spurred by frustrations over a brutal jihadist conflict, perceived corruption and the country’s slumping economy.

Mali has struggled to quell an eight-year-old Islamist insurgency which has claimed thousands of military and civilian lives.

AFP

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Imo State Bans Traffic Agents, Task Forces Over Bribery

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Uzodinma Bans Traffic Agents, Task Forces Over Bribery

The Executive Governor of Imo State, Hope Uzodinma, has restricted all traffic agents and task forces from operating in the state over bribery and extortions.

Declan Emelumba, the state commissioner for Information and Strategy, disclosed this at the Government House in Owerri on Thursday.

Checks revealed that the task force team that operates from Heroes’ Square still demands as much as N27,000 fines from people arrested. A shocking situation that has plunged the limited resources of hardworking Imo people.

However, the information commissioner, who described the task force as “illegal”, said the state government has sanctioned its personnel.

Emelumba said, “The governor has since banned all traffic agents and task forces in line with the desire of the people.”

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FG Puts Nine-year Presidential Jet Up For Sale

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The Federal Government has put up for sale a jet in the presidential fleet, Hawker 4000 aircraft with registration number, 5N-FGX/: RC 066.

The business-size jet which entered into service in December 2011, has capacity for nine passengers and three crew members.

Findings indicate that only 73 Hawker 4000 aircraft were manufactured by Hawker Beechcraft between 2001 and 2013 and they were sold for $22.91m each as of 2012.

The FG in a published advert on Wednesday disclosed that the aircraft with a range of 3,190-nautical mile had flown for 1,768 hours.

It said the aircraft could be inspected at the Presidential Air Fleet’s hangar located at the Nnamdi Azikiwe International Airport, Abuja.

Interested buyers were requested to submit their closed bid to the Chairman, Committee for Sale of Aircraft, Office of the National Security Adviser, care of Special Services Office, Office of the Secretary to the Government of the Federation.

In an advertisement published in some national dailies on Wednesday, prospective buyers were directed to submit a refundable bank draft for $50,000 to the committee with the bid.

It also said that all the bids should be quoted in dollars.

The notice read, “Please note that all bids must be submitted within one week of this publication.

“Background check is required as a pre-qualification for the bid. Prospective bidders who want to inspect the aircraft will be granted access within one week from this advertisement.”

The Presidency had similarly in 2016 put up for sale two presidential aircraft, a Falcon 7X executive jet and Hawker 4000, in line with the directive of the president, Major General Muhammadu Buhari (retd.), that aircraft in the Presidential Air Fleet should be reduced to cut down on waste.

The government also said some aircraft in the fleet would be handed over to the Nigeria Air Force for its operations. It could not be confirmed if this had been done.

According to the Presidency, the PAF has 10 aircraft and they include Boeing Business Jet (Boeing 737-800 or Air Force One), one Gulfstream 550, one Gulfstream V (Gulfstream 500), two Falcons 7X, one Hawker Sidley 4000, two AgustaWestland AW 139 helicopters and two AgustaWestland AW 101 helicopters.

Reports said each of the two Falcon 7X jets were purchased in 2010 for $51.1m, while the Gulfstream 550 costs $53.3m.

The Senior Special Assistant, (Media and Publicity) to the President, Garba Shehu, had yet to respond to inquiries on the number of presidential aircraft sold so far, as of the time of filing this report.

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