Investors in the nation’s power sector have called for the settlement of N50 billion owed them, while also calling for the introduction of a realistic tariff structure, reflective of the current rate of inflation and foreign exchange rate.
The Chairman of Heirs Holding/Transcorp Power Ltd, Mr. Tony Elumelu, speaking tuesday at a two-day interactive dialogue/workshop on the Nigerian power sector, organised by the National Assembly, said investors in the sector could not be expected to perform miracles, with the N50 billion owed them.
The workshop with the theme, “Nigerian Power Challenge: A Legislative Intervention,” had in attendance Senate President Bukola Saraki, Speaker of the House of Representatives, Hon. Yakubu Dogara, Minister of Power, Works and Housing, Mr. Babatunde Fashola, and other stakeholders.
Elumelu also cited over-regulation by the government as one of the factors impeding growth of the industry.
“The tariff structure has to be cost-reflective for the sector to work, especially as we are not taking into account the rate of inflation and the exchange rate.
“The cost of gas also is there and too much regulation is stifling the take off of the privatisation of the sector. The sector must be allowed to flow freely, like the telecommunications sector did before tariffs began to crash years later,” he said.
“With debts of up to N50 billion, it is unfair to expect that investors will perform miracles. The system must encourage them and we all must be sincere with ourselves,” Elumelu added.
In his address, Dogara expressed dissatisfaction over the fact that the N2.74 trillion expended on the power sector in the past 16 years had not yielded commensurate results, but has resulted in perpetual outages instead.
Dogara advocated for new strategies to be formulated by stakeholders in order to address the challenges in the power sector.
“Perhaps the most important question is what happened to the N2.74 trillion spent on the sector from 1999-2015? Why is it that the more we spend on the power sector, the more darkness we attract?” Dogara queried.
“Why are most of the companies licensed by Nigerian Electricity Regulatory Commission not able to start their projects,” he demanded to know.
Some of the challenges in the sector, Dogara said, run across the entire power value chain of generation, transmission and distribution, which have been made worse by inadequate funding, poor energy mix, fuel supply issues, a flawed regulatory framework, and commercial issues, among others.
“The diagnosis includes but is not limited to a critical analysis of the extant legislation and regulatory framework guiding the Nigerian power sector to determine if there is a need for amendments or enactment of new laws that will galvanise the sector to deliver the required results,” the speaker said.
Also Saraki in his address described the epileptic power situation as the failure of governance.
He said privatisation of the sector was meant to be the solution to the problems of the sector, but instead it turned out that the generation and distribution companies were bought by people who have no idea of how to run the companies.
“We must be prepared to put Nigeria first and the government itself must be sincere with every decision that they have to take,” Saraki said.
Fashola, on the other hand, said that despite the challenges in the sector, its privatisation could not be reversed, adding that structures needed to be put in place to strengthen the process and encourage investors.
Fashola noted that generation companies were dealing with huge liabilities, which have limited their capacity to pay for gas to generate electricity, while litigation was also affecting the growth of the sector.
He complained that vandalism was also crippling the sector, as almost 3,000 megawatts of electricity had been decommissioned by vandalism.