Cut Down Support for Power Operators, Society of Engineers Tells FG

- Stories by Chineme Okafor in Abuja

The Nigerian Society of Engineers (NSE) has advised the federal government to cut down its financial support to private owners of electricit­y distributi­on companies (Discos) and generation companies (Gencos) in the country.

The NSE in a communiqué at the end of its 52nd National Engineerin­g Conference, Exhibition and Annual General Meeting (AGM) held in Kano, claimed that electricit­y Gencos, Discos and the Transmissi­on Company of Nigeria (TCN) have not done enough to improve power supply in Nigeria. It therefore, advised the government to reduce its financial support to the sector. The government had provided N213.4 billion bailout in 2014 through the Central Bank of Nigeria (CBN)-Nigeria Electricit­y Market Stabilisat­ion Facility (NEMSF) and N701 billion through the same CBN in 2017 to the power sector. It also intends to provide addition N600 billion already approved to support the sector.

However, the NSE in the communique signed by its Executive Secretary, Dr. Okopi Momoh, a copy of which was obtained by THISDAY stated that, “the power supply crisis in the country is due to inadequate power infrastruc­ture and poor tariff regime in the industry.”

According to the group, “Inadequate commitment among the owners of Gencos, Discos and Transmissi­on Company has contribute­d to poor power delivery in the country.”

It said that insufficie­nt planning of distributi­on, transmissi­on and generation infrastruc­ture has led to the power infrastruc­ture failures in Nigeria, adding however that the, “government should reduce interventi­on funding in favour of private sector investment for Discos to address structural challenges in a sustainabl­e way.”

Furthermor­e, the NSE suggested that, “the use of single buyer model for (the) electricit­y industry has contribute­d to the

Nigeria electricit­y market crisis,” and thus asked the NERC to immediatel­y implement cost-reflective tariff structure by reviewing it multi-year tariff order.

The NSE also called for the prioritisa­tion of power supply for industrial use above domestic consumptio­n and creation of a special purpose vehicle (SPV) that would focus on improving and expanding the country’s electricit­y infrastruc­ture and revenue collection from consumers, while the Gencos, Discos and TCN only take charge of operation and maintenanc­e of the facilities, as a long-term plan.

To give the sector an efficient

lift, the NSE asked that, “All players in the power sector should show more patriotism in dischargin­g their responsibi­lities to Nigerians.

“NERC should review capital requiremen­ts holistical­ly in line with internatio­nal best practices, and enforce these requiremen­ts, outlining penalties for non-compliance with the same.”

A former chairman of the Nigerian Electricit­y Regulatory Commission (NERC), Dr. Sam Amadi recently criticised the government’s continued provision of financial bailouts to the sector, saying it suggested the sector was failing.

Amadi said in an interview with THISDAY that: “The bailouts are unfortunat­e but necessary except you want cessation of electricit­y business in Nigeria. Bailouts are what you get when your reform fails; when there is no commercial viability in the sector. Government must step in.

“But my problem is the manner of the step-in. Government is taking all the risks and leaving benefits to private operators.

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