Nebo: How FG Saved PHCN Privatisation from Powerful Deep-rooted Interests
Chineme Okafor in Abuja
A former minister of power, Prof. Chinedu Nebo, has provided details of how the 2013 privatisation of the successor generation and distribution companies created from the unbundling of defunct Power Holding Company of Nigeria (PHCN) was almost scuttled by deep-rooted and powerful interests in both government and outside of it.
Nebo, said yesterday at a monthly power dialogue organised by Nextier Advisory in Abuja, that for the federal governmentâ€™s responsible management of the power privatisation exercise, these powerful interests whom he said had the potential to even undermine a power minister, would have derailed the privatisation.
He spoke alongside two of his predecessors in the ministry, Dr. Lanre Babalola, and Prof. Barth Nnaji. While Babalola served under Pesident Musa Yarâ€™Adua, both Nnaji and Nebo served under Dr. Goodluck Jonathan, but Nebo completed the privatisation which Nnaji started.
In the runoff to the privatisation, Nnaji, was accused of attempting to influence the procession to the advantage of a bidding consortium which a company he once had connections with was part of. He subsequently denied the allegations and resigned from office to safeguard the transparency of the process.
But speaking on lessons he learnt from the exercise, Nebo, explained that getting it across the finishing line in 2013 required a huge managerial skills which the government showed.
â€œPrivatisation was necessary despite the challenges and problems encountered. Some have argued a piecemeal privatisation process or partial privatisation, meaning, privatising the generation assets first, followed by the distribution assets, or a staggered privatisation of both generation and distributions. I strongly believe that the privatisation of both the generation and distribution was in the best interest of the government and the public,â€ Nebo said.
He further stated: â€œSpecial interests which are mostly hidden and selfish are very ripe and strong, managing them responsibly and intelligently requires a special skill. They are very strong, deeply rooted and connected, and powerful even to overrule and undermine the powers and authority of the Honourable Minister.â€
â€œTo succeed in government, you need a check and balance system; an accountability partner that checkmates your actions and activities. Civil society and donor organisations are invaluable in this regard and proved very resourceful to me,â€ he added.
Nnaji, in his remarks at the meeting stated that a lot of progress had been made by Nigeria in its power sector since it decided to privatise the generation and distribution segments, but urged the government to now muster some political will to address the sectorâ€™s current challenges.
He said transmission constraint, credit-worthiness of distribution companies, over-leveraged power assets, lack of cost reflective tariff that quickly reflects currency adjustments and other market shifts, as well as insensitivity of government agencies to private sector investor issues, were some of the current troubles of the sector.
â€œApart from general concerns about the Nigerian economic environment, there are specific issues which the government should work to address. Government needs to work on supporting private-sector investment in power by riding on the gains made from EPSRA of 2005 and the Power Sector Reform Roadmap to continue to develop and fine-tune enabling policies, and ensure enforcement of the policies and laws governing the sector,â€ he stated.
According to him,: â€œMustering of strong political will to address the sectorial challenges, stable and transparent policies, respect of contracts and agreements,â€ were also necessary to move the sector forward.
On his part, Babalola, stated that the current causes of power failure in the country were rooted more in economics than in governance, adding that despite the current erratic power supply, the country had also made some progress in its implementation of the power sector reform.