The Federal Government and labour agreed yesterday 31st May 2016 that the power
sector was illegally privatised but they differed on how to redress the
“illegality.”
Labour leaders are demanding for the
cancellation of the sale and reversal of 45 percent increase in tariff
effected in February.
However, the government said though it
agreed the deal was fraudulent there were legal issues that might make
it impossible to reverse the sale.
Speaking at a Senate public
hearing on the electricity tariff yesterday, Minister of Power, Works
and Housing, Babatunde Fashola, said government’s interests were
illegitimately sold to some private businesses.
“As a minister, I
inherited a power sector where government’s interests have been
illegally sold and, therefore, I don’t control how power is
distributed.”
On the electricity tariff increase, the minister said that the tariff could not be reversed.
“The
DISCOS made it very clear to us that if we did not give them the market
reflective tariff it means that government would have to carry the
continuing cost that accumulated in the region of about a trillion
naira.
“The tariff was increased in 2015 and then reversed because of
the electoral significance. But the debts that they created were not
reversed and they continued to accrue into this administration.
“We
are not insensitive to Nigerians, owing to their challenges. We were
looking for the best way to solve what has become an over 60-year
problem, since 1950, when TCN was first created. I guess tariffs may
initially look excessive but when we count and measure the down times
and how much time is lost when there is no sustainable electricity and
measure them against the expectation of sustained electricity overtime,
perhaps it would seem cheaper.”
Fashola, who admitted that power
supply in the country had not significantly improved, said confidence
had been restored in the sector.
“Yes, service hasn’t improved
but confidence has come into the system. Like you have the Nigerian
Communication Commission (NCC) in the telecommunication industry, NERC
is for us in the power sector.” In his remarks, Anthony Akah, the acting
chairman of NERC, said it was not possible to reverse the tariff.
“The review of the tariff is possible but its reversal is not,” he said.
“The
tariff was essential and meant to trigger the necessary investment in
the sector. The hike in the tariff was not different from what is
happening in other sectors of the economy,” he added.
In his
submission, the General Secretary of the National Union of Electricity
Employees (NUEE), Comrade Joe Ajaero, said that the privatisation of the
power sector was not properly done and must, therefore be reversed.
Also
speaking, the representatives of the Trade Union Congress (TUC), Chris
Okonkwo, said that the power sector was better off before its
privatisation.
He said that the investors in the power sector lacked the technical expertise and finance to turn around the sector.
He
said: “Consumers are bearing the brunt of the inefficiencies of the
investors. We, at the TUC, are of the opinion that tariff increase was
not the solution to the problems of the power sector.”
Former
Vice President AtikuAbubakar had in April last year advised then
president-elect Muhammad Buhari (Rtd) to reverse the privatisation
exercise of the power sector.
Atiku spoke at the 36th Kaduna
International Trade Fair’s Seminar organised by the Kaduna Chamber of
Commerce, Mines and Agriculture (KADCCIMA). He said the Obasanjo-led
administration sunk billions of dollars into the sector, but failed to
address the problem of the power sector.
The Senate had in February asked NERC to halt the 45 percent increment, following the outcry that trailed it.
The
Senate Leader, Ali Ndume (APC-Borno South), recently called for the
revisiting of the privatisation process and its possible revocation.
Speaking with reporters in Abuja Ndume said the Nigeria Electricity Regulatory Commission had no reason to increase the tariff.
The
senator said the companies bought the nation’s electricity
infrastructure for almost nothing and rather than investing in them,
were calling for hike in tariff.
He said: “These people took over
these companies for peanuts and they have not invested. I have not seen
how they will just come and be charging people indiscriminately like
that.
“This is not a competitive market where you say the market
forces determine the price. They just want to take advantage of
Nigerians. I am against that completely. In fact, I am against the
privatisation completely.”