‘Don’t secure N309bn to finance power sector’

The Senior Staff Association of Electricity and Allied Companies (SSEAC) has cautioned the federal government over its decision to secure N309 billion bond to finance the nation’s shortfall in the electricity market.

President of the union, Chris Okonkwo, who gave the warning at a press conference in Lagos at the weekend, said the decision is ill-conceived, ill-motivated, unwarranted and unsustainable.

He wondered why government is proposing raising the bond when the Central Bank of Nigeria last March provided a bail out to the tune of N213 billion, through the Nigeria Electricity Sector Intervention to the investors.

Inspite of the intervention, he said, the shortfall instead of being wiped out, continued to escalate at the rate of about N15 billion per month, which equalled N400 billion as at December 31,2015.

He said it is completely irrational that such sum of money was offered to companies but same was never offered to the defunct Power Holding Company of Nigeria (PHCN) before it was privatized.

He said: “Assuming but not conceding that borrowing is one of the tools that governments have to fill the financing gap with funds from the bond market, should government secure fund to finance a sector it has already sold out to private investors?

“Issuance of bonds in this circumstance, would amount to not only spoon feeding the operators in their inefficiency, but also at the greater cost to Nigerians as the risk of default would cause the crystallization of the federal government’s sovereign guarantee and lead to national energy crisis in the future. “Moreover, the distribution companies have shown total incapacity to generate revenue by operating in the neighbourhood of 30 percent as against 60-70 percent before privatization and at lower tariffs,” The SSEAC president said since the privatization of the nation’s power sector over three years ago, Nigerians have seen deceptions by failure in promises of generation and distribution companies.