By Chineme Okafor in Abuja
The Bureau of Public Enterprise (BPE) yesterday responded to a call on the federal government to reverse the power sector privatisation by the President of Dangote Group, Alhaji Aliko Dangote, saying it was too early to condemn the process as a failure.
The agency which was responsible for the power sector privatisation in 2013, also disclosed that the federal government will soon divest its 40 per cent stakes in the power firms to allow other private investors buy into the power assets.
Speaking when he kicked off the roll out of large power users’ (LPU) meters which the Abuja Electricity Distribution Company (AEDC) procured for deployment to its about 4000 maximum demand customers, the acting Director General of BPE, Dr. Vincent Akpotaire said Dangote’s call for a reversal of the privatisation exercise was unnecessary.
Akpotaire said the agreement signed with the investors upon their acquisition of the power assets allowed that they take at least five years to invest in and stabilise their networks. He explained that based on that, Dangote’s claim of the exercise’s failure was not factual.
He spoke to reporters shortly after he commissioned one of the LPU meters at the Abuja Archives and History Bureau.
“My take is that we need to evaluate statements before we make them. That is the point I think we should put across to Nigerians. We have put only about three years since the handover of the power sector to private investors.
“Before that, the power sector had existed for well over 50 years and in those 50 years, hardly much was achieved due to several factors and the decision to privatise was a well thought-out decision,” Akpotaire said.
He further stated: “In three years, the measurement of their performance is based on a five year index which is under their agreements and that measurement is not dependent only on the activities of the private investors alone but also on the tariff structure.
“You are all aware of controversies the tariff has thrown up and because of that, there is now a scale back in reviewing of the tariffs, one segment of the review has just been lost and for every review not done, there is a gap in the funding.”
He explained: “In terms of rating, our approach is not to determine what should be the pass mark but to consider whether the issues of reduction of losses has been met, as of today we are just starting the issues and I am confident that in the next few years, most of the results as to performance will be better checked.”
Akpotaire explained that he expected thoughts and expressions from business leaders like Dangote on the sector to be more of proffering solutions to its challenges and not stoking up pressure.
“What I expect is solution finding and not reversal of the privatisation. Best practices demands that this is the way to go. Even in countries as small as neighbouring Ghana, they have made attempt to privatise different sectors of their power sector.
“The concept is not the problem but the management of the outcome. We need our leaders to speak to the solution and not the problems,” he noted.
Speaking on the government’s plans for its 40 per cent shares in the power firms, Akpotaire said: “What we believe is that the 40 per cent held by the government is not for keeps, parts of it will go to state governments that made investments in NEPA in the past, as soon as the valuation process is done by NERC and approval gotten from the Chairman of the NCP, the vice president, the process to offload those components to the states will commence and then what is left will ultimately end up in the private sector.”
“The intention is for these companies to stabilise to a point where their equities will become attractive to other private investors and it will be sold in the stock market where several Nigerians will buy into the sector,” he added.
Meanwhile, AEDC said it invested $1.8 million to procure and install the modern smart meters for 4,000 large users of electricity in its franchise areas of Abuja, Nasarawa, Kogi and Niger.
Its Managing Director, Ernest Mupwaya said the meters were meant for consumers like government ministries, agencies and departments, military and police barracks, as well as consumers with huge power consumptions.
He said they were smart meters that had sidestepped the possibilities of human interface, adding that they are fitted with intelligence components to curtail instances of breeches and bypass.
Mupwaya also disclosed that the Disco was already working to accelerate its small power users’ metering project having placed an order for 30,000 meters while the process of signing off for another 50,000 of such meters had commenced.