Senate declares support for recapitalization of DisCos

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By Ikenna Omeje

The 9th Senate has declared support for the recapitalization of the 11 power Distribution Companies in Nigeria.

The red chamber of the National Assembly said that they would want to see a power sector road map that would be all inclusive, of Generation, Transmission and Distribution, with a holistic picture of how power supply challenges would be resolved once and for all.

The Managing Director/CEO, Transmission Company of Nigeria (TCN), Usman Gur Mohammed, had at a quarterly press conference early in July 2019 in Abuja, while responsponding to a question on the position of TCN that DisCos should be recapitalized said: “On the issue of capitalisation, of course we have written our position to the government. I can tell you that the former Minister of Works, Power and Housing, Babatunde Raji Fashola, knows our position and he had asked the Minister of Finance to look into it. This is a fact. The good news is that if you have seen the press release that was done by the presidency few days ago, which was signed by Femi Adesina, you will clearly see that the government at the highest level is agreeing with us on recapitalisation. In that press release, you will clearly see that the President said that we are working with this system. The owners of DisCos should bring money, resources to fix their DisCos. That’s the recapitalization we are talking about; it’s nothing more. So on that, we are happy that at least government at the highest level, including the President, is actually on the same course with us.”

While declaring its support for the proposal to recapitalise DisCos, the Senate advised that the 40 percent holding of the Federal Government as stipulated in the Power Privatisation Act 2005 may also be more beneficial to the nation if it is sold to foreign investors with technical know-how.

The Senate President, Ahmed Lawan,  who made these known when he received the TCN management team in his office recently at the National Assembly Complex in Abuja, also opined that it is not in the interest of government to be disbursing bailout funds to Discos without commensurate improvement in power supply.

According to him, experts in the field should be given an opportunity to invest in the sector and assured that the Senate would continue to support TCN’s Transmission Rehabilitation and Expansion Programme (TREP) with the objective of rehabilitating, stabilizing, providing necessary flexibility in the transmission grid.

The Senate President however expressed displeasure with the report on Supervisory Control and Data Acquisition (SCADA) contracts awarded three times in the past without success and called for a more stringent process of awarding contracts that would allow only competent firms qualified to execute the project.

On his own part, the Deputy Senate President, Ovie Omo-Agege, who was impressed with the presentation of TCN team led by the MD/CEO TCN, Mr Usman Gur Mohammed, commended the company’s efforts and expressed confidence in the capacity of the TCN team to solve the power quagmire in the country.

For the Senate Majority Leader, Yahaya Abubakar Abdullahi, reducing government bureaucracy in the power sector operations was key. He cited the difficulty in securing the supply of gas to thermal power companies as a major setback to power generation in the country.

Sen. Abdulahi who also agreed with the position of the Senate President on the sale of 40 percent holding of the government in the Discos to experts suggested that the Senate could re-open the power privatisation exercise carried out in 2013 and involve big foreign investors to allow for proper restructuring of the sector.

Earlier in his remarks, Mohammed, who led his team to the National Assembly, presented a report to the leadership of the Senate on TCN’s achievement in the past two and a half years.

These, according to him, include Stabilizing system frequency, executing the Transmission Expansion and Rehabilitation Programme (TREP), secured US$1.57b from Multi-lateral financing agencies for execution of specific transmission projects nationwide, the evacuation of 755 containers containing power equipment from the ports as well as initiated the procurement of a functional SCADA and Spinning Reserve.

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