Fashola Denies Saying PHCN Privatisation was Illegitimate

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By Chineme Okafor in Abuja

The Minister of Power, Works and Housing, Mr. Babatunde Fashola, yesterday said it was untrue he described the 2013 privatisation process for successor generation and distribution companies of defunct Power Holding Company of Nigeria (PHCN) as been illegal, saying the newspaper report which attributed it to him was not factual.
Fashola said in an emailed statement from his senior aide on communications, Mr. Hakeem Bello, in Abuja that he did not make such remarks at a Senate public hearing on electricity tariff.
The minister in the statement distanced himself from the alleged pronouncement.
He said in the presentations he made before the Senate Committee, he never used the word ‘illegally’ to refer to the privatisation of the PHCN by the federal government.
Fashola said rather, a verified playback of a video recording of the session showed he said: “…As  minister, I inherited a power sector where government interests had been legally sold…”
The minister’s clarification of what he said at the session with the Senate has however coincided with reactions from operators of electricity generation companies (Gencos) and distribution companies (Discos) on the report, with some of them expressing their willingness to give up their assets and claim compensation from the government if it decides to reverse the transaction.
According to the statement, Fashola is tracing how the country got to this point in her power sector, referred to the privatisation law made in 2005.
He was quoted as saying: “The people of this country through their parliamentarians made a verdict in 2005 when you passed that law that things must change, the law was passed in 2005 and the process was completed in 2013, I wasn’t here, some of you were here, if the process is bad, where was the oversight?”
He also reportedly said to the Senate: “I will commend to this committee the report of the House of Representatives that investigated the matter. I will also commend to you sirs, some of the reports that have been made by the Senate committee on privatisation. The basic reason for the passage of the power sector reforms bill that was passed in 2005 is that we all know that the government was not doing its business well.”
Fashola, it said defended the reform law when he reportedly said the Senate: “These decisions were taken before any of us was here. If it was working why change it, who were the people that were employed to make it work, it was our employers in the TUC and other unions, and if they complain that the dam was not working and the power plant was not working, that was why they were hired.”
According to the statement, Fashola further described the power sector reform law as a great law.
He had also said in response to a question on when results from PHCN privatisation will become palpable to Nigerians that: “Let us reflect back to a sector that we have privatised like this before, were the results this outstanding three years after we passed the GSM reforms? As we speak today some people can still not afford the GSM; some are going to buy tomorrow.
“When the GSM kicked off, they did not kick off in Abuja, they opened first in Kano, Lagos, Port Harcourt and Aba, that were commercially viable, those were tariffs being set for those who could pay for it.”
He also said three years was hardly enough to expect any significant results from the power privatisation exercise, adding: “But I have been here for a year and less and I think that this system can work , India has done what we are doing, China has done what we are doing, Mexico has done what we are doing, Brazil has done what we are doing and South Africa, they went through all of these hiccups and I think we should inform ourselves before we jump to some conclusions really. If we cancel this privatisation, what do we go back to, what are our choices.”
The minister also debunked the allegation that the Discos were yet to make a significant investment in the sector.
According to him: “I come from a view that you don’t sanction a people unless you have given them all the tools to work. Governments, ministries, departments and agencies are owing these people, there are also debts; tariffs were set on assumed level of power supply, government has not delivered on that power supply, so the fundamental assumption of performance are also not there.”
“Government cannot deliver on that power partly because the fuel for that power is being punctured; it’s like leaking the fuel of your own generators, we cannot insist on performance. We have no moral right to sanction them if we have not kept our side of the bargain.
“But we are insisting on performance, we have asked them to submit their audited accounts for the last three years, some have done so while others have not done so, we have started a ranking system, ranking safety, ranking performance, ranking collection to create competition as a basis for sanctioning performance, so that the rules of the game are clear from the beginning,” he added.
Meanwhile some of the power operators told the paper anonymously that if the government decides to reverse the privatisation exercise, they are unlikely to contest it in court but will quickly ask that their investments plus interest be paid to them immediately.
They explained that in as much as they believed the minister may not have made such remarks about the exercise, they were largely not disturbed by the prospects of a reversal as the agreement they signed with the government was tight enough to guarantee them cash back on their investments plus premium.
“Fashola is not known for such political statements. That’s a man that’s mechanical about his job, and so I don’t believe he said such.
“But if it is true he did and government decides to reverse the sale, we will gladly alert our banks to expect payments from the government on such and this is plus our compensation. I am so sure a lot of us would gladly throw in the towel because it is indeed a huge task keeping up with the challenges we put up with in the sector,” said one of the Disco operators