The Senate Committee Chairman on Privatization, Senator Ben Murray Bruce has cautioned against calls for the reversal of the power privatization in the country but that instead, concerted efforts should be made by all stakeholders to address the crisis in the sector. According to him, reversing the power privatization would paint Nigeria as an unserious country which does not respect the sanctity of contractual agreements, thus scaring away potential investors.
The Chairman stated this when he led other members of the Committee to the Ikeja and Eko Distribution companies as well as the Egbin Generation company in Lagos as part of the Committee’s on-going oversight visits to privatized companies in the country, noted that the “power sector is very crucial to the economic well-being of the country”.
Mr. Murray Bruce said the on-going oversight visits had proved him wrong on his initial assumption that the privatization process was wrong, adding that with the benefit of hindsight, “I have seen that the crisis in the sector is the necessary outcome of the privatization”. The Committee members expressed concern at the liquidity crisis in the sector and wondered why generating companies were not being paid for the power they generate to the extent of being owed huge sums in billions of naira.
Members also decried power losses occasioned by vandalism, power theft and other criminal acts by unscrupulous elements and promised that as a first step, the Senate Committee would liaise with its House counterparts to propose a bill to deal with these vices as a matter of urgent national importance.
Earlier in his briefing to the Committee Members, the Acting Director General of the Bureau of Public Enterprises (BPE), Dr. Vincent Akpotaire, said that the privatization process was widely acclaimed globally as the best largest and most transparent transaction ever in the power sector. He said the inherent post privatization crises and the macro issues have nothing to do with the transaction process and that the solution lies with “managing the outcome of the privatization”, which requires some level of investments.
The BPE boss reiterated his call on the investors to look for long term funds to help finance their Capex (Capital Expenditure) to enable them meet what they committed to in the Share Purchase Agreement (SPA) which is to reduce their collection and commercial losses. The Acting DG while calling for the aggressive capitalization of the Nigerian Electricity Bulk Trader (NBET) urged it to come up with more ingenious ways like approaching the Bond market for funding.