By Abubakar Y Ojima, Abuja
A consumer advocate forum, Nigeria Consumer Protection Network, NPCN, has warned against plans by the Bureau of Public Enterprises, BPE, to sell five (5) Niger Delta Power Holding Company, NDPHC-managed National Integrated Power Project plants, describing the move as ill-timed, counter-productive, and a national risk.
This as the Special House of Representatives Joint Committees are to meet and commence a special parliament inquiry into the privatisation plan.
In a statement made available to TheEXPLAINER in Abuja, President of NCPN and member, Presidential Ad-hoc Committee on Review of Electricity Tariff in Nigeria (August, 2020), Kunle Kola Olubiyo, noted with concern that hastening to sell the assets at this point is in national interest coming at a time the current President Muhammadu Buhari’s administration is already coming to an end.
BPE had recently pre-qualified 16 firms for the privatisation of the five NIPP plants in the country.
According to NCPN, it has seen records of the firms bidding for the Geregu, Omotosho, Olorunsogo, Calabar and Benin-Ihovbor NIPP plants and some of them “have hardly any experience in the business of power generation”.
It argued that the NDPHC’s NIPP plants have always been infrastructure backbone of generation providing electric power while guaranteeing national energy security.
“For instance, during the peak period of the COVID-19 pandemic when the private investors of other electricity generation companies (GenCos) ramped down electricity generation due to low revenue turnover, the NIPPs being public assets, provided Nigeria ensuring to a large extent energy security and socio-economic stability as it had to ramp up power supply to avoid economic and administrative shut-down in the country.
“The private firms in the power sector so far have not fared better than the NDPHC GenCos which have their gas obligations being met, gas pipeline assets, and have contributed to both transmission and distribution networks nationwide.
“Very recently, the gas producers have allegedly made claims of a legacy debt of about $1 billion. These legacy gas debts were accumulated over a long period of time and it means that any time they stop supplying gas to the GenCos, Nigeria could be plunged into darkness if the NIPP GenCos are sold off and the entire power sector upstream is left at the whims and caprices of wholly private sector investors,” Olubiyo argued, urging BPE and any designated agency of government to think of how to optimise the NIPP/NDPHC GenCos so that Nigerians can at best benefit from the power sector intervention.
NCPN also noted that the NIPP interventions being implemented across the power sector value chain by NDPHC requires that the Nigerian Electricity Regulatory Commission (NERC) would have evaluated them and determined their real value, which according to it has not been done for the post-privatisation period of over nine years.
“Without this evaluation to determine the Capital Expenditure (CAPEX) in the NIPP power sector intervention projects, NDPHC has been continually short-changed of revolving funds that should be re-invested into other power interventions in line with Nigeria’s energy access for all targets of 2030,” it said.
NCPN expressed the fear that selling off the five NIPP plants may not even guarantee their optimal performance as the new investors would have to begin a fresh journey of having some levels of Power Purchase Agreements (PPAs) and Vesting Contracts with the Nigerian Bulk Electricity Trading PLC (NBET).
It therefore advised that the move be suspended until the time is ripe.
