THIS month the Bureau of Public Enterprises (BPE) will hopefully make public its short-list of bids for 17 out the 18 unbundled PHCN companies. They were created under the Electric Power Sector Reform Act in March 2005 with a view to establishing a broad base of power utility providers that would be in a position to compete and offer efficient services that were lacking under the erstwhile monolithic NEPA. Towards that end the BPE last December called for and subsequently received 331 expressions of interest by local and international investors seeking to take up majority equity in the 17 PHCN power generation and distribution utilities carved out of NEPA.Because the Power Reform Act took four years to pass through the legislature, it is in order to remark that to arrive at this stage has already taken 10 years under the watch of three successive Presidents whose political party has held comfortable majority control of the National Assembly since 1999. It should also be pointed out that even making the short-list public in May, (as scheduled) turned out to be a luxury that had to await the outcome of the just concluded presidential elections for fear of a change of policy in the event of a new face emerging at the Presidency. With the power sector reform policy etched in the 2005 Power Reform Act, we consider the delay till May and the implied attempt to make the actualisation of the privatisation of the sector personal to President Goodluck Jonathan totally uncalled for.And as if to show that government was still not sure of how to implement the much delayed reforms, the Minister of State for Power, Nuhu Way, who appears to be working at cross-purposes with the BPE well beyond the eleventh hour, has introduced the so-called expression of interest (not one of the 331 already received) by a Brazilian firm, Proinfra, which has submitted a special offer of $100 billion for a majority stake in all 23 PHCN power generating plants. If the offer wins the day, the country will once again have a single power generating company albeit privately owned, which will translate into a partial return to the NEPA era. While the Power Reform Act may not discountenance a single firm controlling more than one power generating station, it will be ill-advised to allow the operation of a sole private sector power generating company in the country.With regard to the scheduled privatisation programme, the BPE, which has retained British Power International as advisers, has received expressions of interest in power generation from 174 firms while another 157 bidders prefer power distribution. Short-listed companies will proceed to submit technical and financial proposals. The choice of distribution companies will depend on their plans concerning technical, commercial and collection loss improvements over a specific initial period in light of high transmission losses of up to 40 per cent unbilled but wheeled electricity in the network currently.As the BPE takes initial practical steps to privatise the unbundled PHCN utilities that had been scheduled to transform into limited liability companies by year-end 2006, bidders for the utilities should not be subjected to an obstacle race. We do not want to witness a repeat of BPEs dismal failure to privatise NITEL after five attempts over the past 10 years. In the category of distribution utilities, the BPE with sincerity of purpose will surely find among the lot of applicant firms, qualified and capable bidders that are existing power distribution companies or core investor groups with power distribution companies as long-term technical partners.With regard to the category of power generation, the PHCN utilities slated for privatisation at present produce 3800 megawatts of electricity. They will probably generate 7,700 megawatts of power at full capacity. That generation capacity is a far cry from the Vision 2020 target installed power generation capacity of 20,000 megawatts for 2015, which coincidentally is the year the re-elected Jonathan administration will complete its tenure. The BPE has indicated that only a third of the countrys population has access to fitful supply of power. The total power needs even for that small fraction of the population currently outstrips the 2015 target capacity.The Federal Government should therefore look beyond the privatisation of the 17 PHCN utilities by throwing open the entire power sector to all interested investors. Since 174 firms are bidding for just six power generation utilities, government should remove any existing impediments and actively encourage well established and sound but unsuccessful bidders among them to build and own private power plants in the country. It is technically feasible to construct and commission a power plant within three years. For example, the above belatedly introduced Brazilian firm clearly possesses the financial muscle to invest in greenfield power plants that could generate a significant and acceptable proportion of the countrys power needs in the medium term.As regards the sole PHCN transmission company, which will not be privately owned but which will be managed by a private organisation, the reported plan by an Indian firm to submit a revised offer (implying an unacceptable initial offer) for the management of the national grid should ominously awaken government to past failures by Indian firms engaged to breathe life into, among others, the National Machine Tools Industry, the Iwopin Pulp and Paper Company, the Nigerian Railways and the Ajaokuta Steel Plant which had its vital parts carted away by an Indian company which reportedly owns several operational steel plants elsewhere.Since Indian firms that handle Nigerian government projects tend to bleed and chop Nigeria small (as an Indian lady put it revealingly), the BPE should tread cautiously while Nigerians watch the performance of the Indian company which recently undertook to build three fertiliser blending plants in the Niger Delta. Consequently, the management of the national grid should be handled by a company of a different country of origin that possesses a good track record. In any case, since power generated can be evacuated on-grid or off-grid to consumers, the national power transmission grid should neither be a stifling monopoly nor become a crippling constraint to supplying the countrys power needs.
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