Consumers seek power sector privatisation review

June 28, 2019
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Electricity consumers yesterday urged the Federal Government to review the power sector privatisation that led to the handing over of the power assets to private firms.

Responding to excuses of cash crunch by electricity distribution companies (DsCos) as reason for the slow pace of metering customers in the country, the Secretary-General, Network for  Electricity Consumers Advocacy of Nigeria (NECAN), Mr. Uket Ogbonga, said the major reason for the privatisation of the power sector was that the Federal Government had no financial capacity to run it.

He wondered why the DisCos should cite excuse of cash crush, the same reason for which the entities were sold to private investors, who were presumed to have the financial, management and technical capacities.

Ogbonga called on the Federal Government to embark on a total review of the models with which the Bureau of Public Enterprises (BPE) privatised the power sector entities.

He said: “We were told that private investors with the financial, technical and management capacity were to be brought on board. And when they unbundled the defunct PHCN and they were handed over, we are hearing a different story.

Read also: Why electricity metering is low – DisCos

“And the story is that we don’t have the resources, that they (DisCos) cannot meter customers because they don’t have the financial capacity to do that.

“So that is why we are rooting for a total review of all the models that were used for the privatisation exercise. You can’t tell me I can’t do this business because of this problem and bring in somebody that has the capacity and he is coming to tell us I can’t do it.”

In an audience in an audience participatory programme of Radio Nigeria in Abuja,  the General Manager, Corporate Communication, Abuja Electricity Distribution Company (AEDC),  Mr. Oyebode Fadipe said metering is aligned with the issue of liquidity in the sector. He said where there is issue of paucity of cash, it limits the firm’s capital expenditure.

Fadipe noted that the Federal Government has pegged a limit which the DisCos can spend its revenue.

Besides, he said the DisCos have not been allowed to thrive with a cost reflective tariff.

Fadipe said: “The issue of metering is tied to the issue of liquidity. Where there is no sufficient funds for investment in the sector, there is no way you can expect everything will go on smoothly.

“For instance, the fundamental part of the challenges that the DisCos and indeed the power sector experiences is that there is a limit to your capital expenditure. You have a ceiling on your budget. You are not allowed to spend beyond a particular revenue level. Then how do you want to provide all the things that you want?

“That is also with prejudice to the fact that you don’t even have a cost reflective tariff that is supposed to help you have the cash to enable you purchase most of these things.”

He however revealed that in its bid to intensify efforts at metering the customers in its franchise area, the AEDC recently purchased a single vehicle for N114 million.

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