FG: Revocation of PHCN Sale, Adverse to Investment

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Chineme Okafor in Abuja

The federal government has said calls for cancellation of the privatisation of successor companies created from the unbundling of defunct Power Holding Company of Nigeria (PHCN) were unhealthy to Nigeria’s efforts to woo more investors into the country.

It thus pledged to uphold all contractual obligations entered into by it with investors in the power sector.

The government also disclosed its plans to spend an estimated $150 million on a revised rural electrification programme in the country using 44 tertiary institutions and the small hydro dams in the rural areas as anchors for the programme.

The Minister of Power, Works and Housing, Mr. Babatunde Fashola said these remarks in a statement that was made available in Abuja on Tuesday by his senior special adviser on communications, Mr. Hakeem Bello.

According to the statement, Fashola spoke at the 2016 European Union-Nigeria Business Forum in Lagos, where he disagreed with proposals in the public space calling for the cancellation of the power sector privatisation.

He stressed that investors that put their monies in the sector must have the assurance that government would not flip flop and that contracts that fail have consequences.
“This is only an example of what money can do, and where to inject finance, and where opportunities lie,” he said.

He further stated: “I will like to weigh in on some reports where there are calls allegedly being made for us to “revisit the privatisation”. While I would love to have some more clarification about what is meant by “revisit”, let me be clear that we would probably not be here talking about financing opportunities in power, without privatisation.

“If revisiting means that the operators should allow more investors into the business I am for it but with the caveat that it has to be done withi n the rules of contract, negotiation and possibly arbitration,” he added.

Fashola said with the privatisation of the sector, government’s role was now restricted to policy-making, through the ministry, in areas like energy mix, safety of energy and governance, regulation through the Nigerian Electricity Regulatory Commission(NERC) to license, monitor and sanction the operators as well as setting the tariff and safety through the Nigerian Electricity Management Service Agency (NEMSA) by ensuring quality of installations, certification of equipment and standards and meters, among other responsibilities.

On the revised rural electrification programme, he explained that 37 out of the 44 tertiary institutions audited for the $150 million programme were universities while seven were teaching hospitals.

He noted that government would deploy 37 independent power plants made up of nine gas plants and 28 solar plants with a combined generation capacity of 120 megawatts (MW) to power all the universities.