Senate to probe N1.532trn intervention fund to power sector
•Demands revocation of privatization
The Senate on Tuesday mandated its Committee on Power sector to probe the over N1.532trillion intervention fund injected to the ailing sector in the last seven years.
It equally asked President Muhammadu Buhari administration to revoke the privatisation of the sector.
The lawmakers said both the distribution and generating companies have provided power outage, not stable electricity in the last 10 years.
The resolution of the Senate was sequel to a motion, “Power Sector Recovery Plan and the Impact of COVID-19 Pandemic” sponsored by Senator representing Benue North East, Gabriel Suswam.
The former Benue state governor who incidentally is the Chairman Senate Committee on Power has sought for assistance for the power sector operators as he noted that their operations have been affected adversely by the deadly pandemic, Coronavirus.
Suswam who asked that the power sector be accommodated in the unfolding N1.7trn Intervention Fund to be utilized to upgrade healthcare facilities across the country argued that the power sector was also tangential to the attainment of the target of the health sector.
According to the Chairman Senate Committee on Power, “While the appropriate Executive Bill that will articulate the actual use of the proposed N1.7 trillion COVID-19 Crisis Intervention Fund is yet to be presented to the Senate for consideration, the devastating impact of the pandemic on the power sector has necessitated the need for the Senate to draw the attention of the federal government to the need to include the sector in the disbursement of the proposed fund bearing in mind the vital role of stable electricity supply to current efforts towards jumpstarting the economy which is still groaning under the impact of the pandemic.”
Suswam further noted that, “Stable and uninterrupted power supply is also a critical factor in the management of COVID-19 patients at the designated isolation and treatment centres across the country as well as in the implementation of the proposed upgrade of healthcare facilities.”
But the President of the Senate, Ahmad Lawan expressed reservations over the call for assistance to the operators in the industry, the
Discos and the Gencos as he noted that the power sector has since been privatised.
He said, “The power sector has been privatized as we all know, but it has not delivered. We gave them our common patrimony and they still came back to us as Distribution Companies (Discos) and Generating Companies (Gencos) to look for money from the public.
“I think the time has come to review, and probably reverse this privatization because if we stay as it is today, for the next ten years there will be no power in Nigeria, as the situation is. So we need to be decisive about the power sector.
“We expected efficiency and effectiveness in power supply, but I think on both sides, the shared purchase agreements were maybe not adhered to. But definitely what is obvious is that the Discos have no capacity at the moment to give us power.
“The Gencos have challenges too, and I think it is not a good commentary that we should continue to give them money after we sold them. These are businesses now, they are private businesses.
“If there are areas that we must intervene as a government, then it must be seriously justified, but the way it is, I think there is need to review this privatization and see what has really happened because something is certainly not right.
“And for the next ten years, if there is nothing fundamental and drastic in this sector, nothing like power will be stable in Nigeria, and that will be unfortunate.
“So, it is good our committee is investigating even the previous billions, in fact over a trillion. I mean that’s a lot of money and there must be justification for this.
“We hope that they will be effective, but in the event that this thing is not addressed properly, there will be need for Government really to look into this privatization that has taken place, because probably the wrong investors took over or maybe the government is not fulfilling its own promise.”
While it eventually resolved that the Federal Ministry of Finance should include the Nigerian Electric Power Sector in the disbursement of the proposed N1.7trillion COVlD-19 Crisis Intervention Fund, the Senate urged the federal government to suspend the planned tariff increase scheduled to take effect from July 1, 2020.
The Senate called on the Central Bank of Nigeria to allow operators in the power sector access to foreign exchange for procurement of equipment and materials.
The Senate also urged the Federal Government to consider additional tariff support to cushion the effect rate shock over a fixed period to allow time required for TCN and Discos to access funds and implement performance improvement investments that will support increased tariffs to certain classes of customers especially during the pandemic.
The Red Chamber asked its Committee on Power to investigate all market participants in the power value chain and ascertaining the level of corporate governance compliance with the Nigerian Electricity Industry ( NESI) and to report back within four weeks.
The Senate adjourned plenary till Tuesday, June 2, 2020.