Energy

Commitment to sanctity of privatization contract must be total – Stakeholders

By Folake Ogunleye

Stakeholders in the Nigerian power sector have called for the federal government’s commitment to the sanctity of the privatization contracts.

According to them, this is then government can hold the investors accountable to their obligations

Speaking at recent Electricity Policy Education Workshop for Energy Correspondents, they said central to achieving a self sustaining Nigerian electricity supply industry, is a cost reflective tariff which they said can be achieved by either getting customers to pay or the government pays.

They note that steady electricity supply is crucial to industrial development of any country, especially Nigeria that is planning to become one of the best economies in the world by 2020.

In their opinions, steady power supply will also reduce cost of manufacturing and other domestic services.

According to them, uninterrupted power supply will guarantee investments, employments for teeming unemployed graduates and reduce poverty level, among other developments.

Stressing the importance of steady power supply to development, most Nigerians believe that the provision of stable power supply is the most important dividend of democracy any administration can accomplish.

Perceptive observers also recall that past administrations, since independence, have spent a lot of money on power projects without much result.

They note that the Federal Government spent more than three billion dollars between 1999 and 2007 on National Integrated Power Project.

According to them, the privatised electricity firms may have been freed of the state bureaucracy that previously hamstrung their operations, but these utilities still encounter a myriad of structural problems that continue to hamper growth in the power sector.

These include shortage of gas supply for thermal plants, high levels of unpaid electricity bills and the country’s outdated and poorly maintained transmission network, which the government still owns but put under private management in 2012. Indeed, the transmission network cannot handle much more load than current peak electricity production.

 Unsurprisingly, many of the new power operators have struggled to make progress, especially as they have had to contend with ageing facilities requiring substantial amounts of investments to upgrade and expand.

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