Labour wants govt to enforce privatisation agreement with Gencos, Discos


The Senior Staff Association of Electricity and Allied Companies, SSAEAC, has called on the Federal Government to enforce the agreement it reached with the private companies that took over the defunct Power Holding Company of Nigeria, PHCN, assets during the privatisation exercise in the power sector, to ensure improved electricity supply in the country.

The association, which decried the poor performance of the power sector three years after privatisation, maintained that the government should not ask electricity investors to shape up as expressed by Minister of Works, Power and Housing, Mr Babatunde Fashola, but should rather ensure that it implemented what was stipulated in the contract for the sale of the power sector.

“We think it is time to reappraise the content of the agreement that handed over the Power Holding Company of Nigeria (PHCN) to the private sector and its implementation.

“It is time to hold those who bought the power sector down for what they had signed that they will do. We want to know if they are doing well or not,” President of SSAEAC, Mr. Chris Okonkwo, said.

Okonkwo criticised government’s plans to get N309 billion fund from the bond market to “finance shortfall” in the electricity market since it had already sold it to private investors.

He said, “Issuance of a bond will amount to spoon-feeding the operators for their inefficiency. The bond will be and at a cost to Nigerians as the risk of default will affect the Government Sovereign Guarantee and lead to an energy crisis in future.’’

The union leader said that among the challenges that have affected the growth of power supply was the inability of the power distribution companies or Discos to collect revenue for the energy generated and transmitted by the generation companies or Gencos.

“Critical to the survival of this sector is revenue collection. There is a deficiency in revenue collection. These companies collect revenue of 30 per cent as against 60 to 70 per cent before privatisation and this is the money the sector needs to operate with.

“Where you produce something and the money for it is not recovered through the market, that product will go extinct. That is what may happen,” he said.

Okonkwo said that another challenge was because the country operated a grid system which remained the best option for cheap power.

“The grid system is where generators very big volume are integrated and connected into cadre and energy is exchanged throughout the interconnected grid.

“Where the money for the energy is generated and put on the grid cannot come back for the Gencos to plough back into production of electricity for the transmission to recover the cost of transmitting and delivering electrify to the Disco’s, then we run the risk for the whole system collapsing.

“That is why we need to raise alarm again that the Discos have no time to be asked to perform again. What should be done is access them and act on what they have attained so far, positive or negative,” he said.