Senate favours divestment of FG’s 40% stake in Discos

Members of the Nigerian Senate have declared their support for the proposal to recapitalise the 11 electricity distribution companies (Discos).

They also advised that the 40 per cent shares held by the federal government in the Discos be divested from and sold to investors with technical competence.

A statement from the Ministry of Power quoted the parliamentarians to have disclosed this, stating that it would be more beneficial to Nigeria and the power sector.

It disclosed that the Senate President, Ahmad Lawan, made this known when he received a management team of the Transmission Company of Nigeria (TCN) which was led to his office by its Managing Director, Mr. Usman Mohammed.

Lawan, during the visit, also stated that it was not in the interest of the government to continually disburse bailout funds to the power Discos without commensurate improvement in electricity supply.

He said experts in the field should be given an opportunity to invest in the sector and assured that the Senate would continue to support the TCN in its execution of the Transmission Rehabilitation and Expansion Programme (TREP) which is planned to rehabilitate, stabilise and provide the necessary flexibility in the country’s transmission grid.

Despite his assurance of support for TCN’s TREP, Lawan, however expressed displeasure with the report on its contracting for a Supervisory Control and Data Acquisition (SCADA) which had reportedly happened three times unsuccessfully in the past.

He thus called for a more stringent process of awarding contracts that would allow only competent firms qualified to execute the project.

Similarly, the Deputy Senate President, Ovie Omo-Agege, said he was impressed with the presentation of the TCN team, and expressed confidence in their capacity to solve the country’s power supply challenges.

In the same vein, the Senate Majority Leader, Yahaya Abdullahi, said reducing government’s bureaucracy in the power sector operations was key to getting past its challenges. He cited the difficulty in securing the supply of gas to thermal power generation companies (Gencos) as a major setback to power generation in the country.

Abdulahi, agreed with the position of Lawan, on the sale of the 40 per cent holding of the government in the Discos to experts, and suggested that the Senate could re-open the power privatisation exercise carried out in 2013 and involve big foreign investors to allow for proper restructuring of the sector.

Mohammed, had earlier presented a report on the operations of the TCN in the last two and half years to the leadership of the Senate, and explained that stabilising the country’s transmission system frequency, executing the TREP, securing $1.57 billion from multi-lateral financing agencies for execution of specific transmission projects nationwide, and evacuation of 755 containers containing power equipment from the ports as well as initiated the procurement of a functional SCADA and spinning reserve, were parts of the successes of his team within the period.

The immediate past Minister of Power, Works and Housing, Mr. Babatunde Fashola, recently said the Nigerian Electricity Regulatory Commission (NERC) has enormous regulatory powers to make the country’s electricity reforms work.

Fashola had said this while answering questions at the recent ministerial screening exercise. He had stated that the NERC needed to be supported by stakeholders to exercise its powers to sanction erring operators who refuse to serve consumers efficiently in the sector.

He had noted that issues of consumer complaints and regulations should be directed to the regulatory agency for effective administration and compliance, stating that sections of the country’s Electric Power Sector Reform Act (EPSRA) 2005, vested enormous power on NERC.  
“Let me speak to two powers that the regulator has in Sections 73, 74 and 75 of the electric power sector (EPSRA). One of the powers that was vested in that law by the regulator is to undertake an investigation and do several things. 

“It could mean demanding the license of the licensee or even cancelling the license as we have seen in cases like the Central Bank of Nigeria, and as we have seen in some cases in Economic and Financial Crime Commission (EFCC) and Nigeria Broadcasting Commission.

“So, the powers of the regulator for making the reform work must be targeted towards ensuring minimum service levels, licensing conditions are met and until we fully exhaust those powers, it will be premature to say that the reform is not working,” Fashola had said.

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