Former NERC Chair, Amadi, Electricity Union Condemn Power Privatisation

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Chineme Okafor in Abuja

After serving for five years as the Chairman of the Nigerian Electricity Regulatory Commission (NERC), playing a role part in the power sector privatisation exercise for the federal government, the immediate past chairman of NERC, Dr. Sam Amadi, last night condemned the privatisation of Nigeria’s power sector, saying it was not the solution to the country’s power sector challenges.

Alongside the Secretary-General of the National Union of Electricity Employees (NUEE), Mr. Joe Ajaero, Amadi spoke at the monthly power dialogue of the Nextier Advisory in Abuja.

He specifically said that government’s failure in the power sector could not be cured by adopting privatisation, and that as an idealogy, the privatisation exercise that was concluded in 2013 was structurally wrong.

“You cannot cure government failure by privatising because privatisation is built upon some basic framework for public good. My argument is that there are some certain structural issues that determine whether that proposition would work. Government needs to reform how it does business.
“The idea that we can outsource government by allowing the private sector to come in with skills, good finance, information management, has failed. That is why I say that I’m not against privatisation as an intervention in cases where it is justified, but I’m against it as an ideology, which is what happened between 2010 and 2013,” said Amadi.

He added; “So, perhaps some Discos would have been sold, while others would not have been sold. I argued that this is the most expensive privatisation exercise. We shouldn’t have paid workers. We should have allowed them and deal with them in a corporate sense.”

“But we sold and used the money to pay workers who are still there. My answer is simple, it was ideological because it was based in the assumption that the private sector works,” he explained.

On his part, Ajaero stated that the model of privatisation adopted by the government could not be understood by many, as power distribution companies had failed to even provide meters for electricity consumers.

Ajaero, noted that private sector players who bought the power assets had not delivered on the promises they made since they took the companies four years ago.

According to him: “Somebody said that there is a model for privatisation and I have asked, what model did we use in Nigeria? From which country did we borrow the model? In India, you can go to a store and buy your meter, but is that so here? In fact, in every market, even if you want to buy garri, there is measurement for commodities; you have a cup to measure the garri.

“But you have electricity being generated without following it up with a form of measuring instrument. There are no meters, you generate power and people are charged based on estimation but then we say we’ve arrived with respect to privatisation.”

“Even the Discos, if you give them all the meters, they won’t install them because they want to make profit. People at times use the telecoms sector as an example of where privatisation worked. They should stop comparing what happened in the telecoms industry with the privatisation of the power sector.

“This is because if you don’t have airtime in your phone you can still use it to receive calls, but power is not like that. For the past one month, there are people who haven’t loaded airtime in their phones but they are receiving calls. However, in the case of power, the very moment your credit finishes, I’m telling you that your power supply will be cut,” Ajaero explained.