The Bureau for Public Enterprise and the Nigerian Electricity Regulatory Commission NERC recently came down on the electricity distribution companies with a sledgehammer by taking over five electricity distribution companies (discos) and even dissolving their boards.
While this action has been long been canvassed for by a good number of stakeholders with BPE, in particular, turning deaf ears to their observations, the questions that have however been agitating the minds of some Nigerians, are, what has suddenly changed that the two agencies have decided to take such a drastic action against the companies. What were they looking at that the situation with these companies has deteriorated to this level? Are they just realising that the companies are insolvent? How does it look if someone that has 40 percent is now taking over from those with 60 percent?
It may be understandable if the National Electricity Regulatory Commission (NERC) says it is aware of what is happening within the operations of these companies, but because of regulatory challenges, it is not empowered to intervene even if it sees something not palatable happening, how can we explain the situation with BPE which has some of its officials as board members in some of these companies. is it that it is not aware of what is happening until things degenerate to this level or has it decided to look the other way when the roofs are fallen to avoid the stoppage of its pecuniary gains from being stopped?
The only answer to these questions can only be summed up in one word, corruption.
These questions have become very germane given the fact that the BPE in particular has representatives on the boards of these companies. The representatives have been part of those that ride the supper SUVs the companies bought for their officers. So how can they supervise the companies? Some of us are not surprised that the BPE decided to behave the way it has, because given the antecedent of the agency one can easily ask, how many government parastatals sold since 1999 can the BPE beat its chest today to have seen the benefits of the privatization exercise. Of the lots that have been sold, perhaps only very few have survived after privatization.
The BPE does not care what happens after privatization of these companies, that is why many of the companies privatised became subject to asset stripping and are completely dead today. Rather than helping in grow the economy, no, the agency is doing the direct opposite. Where are the famous Daily Times today, Aldja Delta Steel, and NASCON just to mention a few?
So one is not surprised that the same situation is happening to the privatized entities in the power sector.
BPE as the midwife of the privatization also double as the monitor too after the privatization.
Many stakeholders have kicked against it, saying that BPE cannot be the Judge and Jury. As of today, the agency is the judge in its own case.
Notwithstanding, BPE had continued in this role, only to wake up suddenly to say that the Discos on whose boards the director general himself is alleged to be a member could not smell the dead rat early enough until things fell apart as the centre couldn’t hold for almost 9 years.
Anarchy has become the order with more frustrations, an if care is not taken, what the country would witness in the nearest future might be worst than what was experienced in the heydays of the Power Holding Company of Nigeria (PHCN).
With all the trillions pumped into the sector in addition to the weekly Federal Executive Council’s approvals on weekly basis the power sector may be heading to the rocks by the time all the legal fireworks begin to fly left right and center.
Industry stakeholders have said that the agency is not alone in this case, as The Presidency, the National Assembly (NASS) and Ministry of Power can not absolve themselves for this abysmal state.
Section 55:3 of EPSRA 2005 mandates them with ensuring optimal performance of the sector. So they are also complicit in this matter. One industry operator described the situation as “ all have sinned.”
Pursuant to the performance agreement (PA), signed with the Bureau of Public Enterprises (BPE), Discos had key performance indicators tied to metering electricity consumers and significantly reducing the collection and technical losses in the sector from (1st Nov, 2013 to 2018 Oct 31st ) five years. As of 2018, the percentage of compliance was very poor below 40% among the Discos – meaning the average compliance is still poor.
This was when it was expected that the BPE will wield the big stick but because of compromise, ineptitude, and corruption, BPE looked the other way. Given that Profit is the motive of every business, it is not surprising that the discos continued raking in and sharing with their cohorts. It is therefore surprising how BPE just arose from their sleep and slumber when the performance agreement had expired to say Discos performed abysmally.
“The Director-General of BPE, Alex Okoh in a statement in Abuja reacting to the opposition to the takeover by sacked owners of Benin, Kano, Kaduna and Ibadan DisCos, said the utilities were the worst performing in the market. Okoh singled out Ibadan Electricity Distribution Company, IBEDC for particular mention, stating that the company’s performance was worse under the management of the sacked owners than pre-privatisation in 2013.”
BPE said the decision by fidelity bank to call in their loan was commercial and contractual.
According to the agency, “It is envisaged that the majority interest in these DISCOs would be sold to competent private sector investors with the requisite technical and financial capacity to re-capitalize and manage these entities efficiently.
This is new at all, critical stakeholders have following the extra-ordinary tariff review which took place in February 2022, stated that all 11 discos are bankrupt and should be put into administration by calling for recapitalisation of the discos to enable injection of capital. This move was difficult for both the regulator and BPE due to what some stakeholders call regulatory capture.
The National Assembly members, rather than doing its oversight functions it more interested in lining their pockets. They would only bark when nothing is forthcoming from the agencies and companies.
According to Kunle Olubiyo, President of one of the electricity consumers networks, he said “ We are in a big mess. Big Shit as the American would say. There is a serious battle for the soul of the Power Sector from failed regulatory ecosystem to enthronement and entrenchment of energy cabals & energy mafia”
He said an Energy Economics Oligarchs worst than Dirty Monkey business that played out in the President Putin coup against Gorbachev is playing out
According to him, the Nigerian Electricity Regulatory Commission &
Bureau for Public Enterprises from findings have become increasingly
toothless bulls enmeshed in regulatory capture and are being heavily teleguided
He stated that as electricity consumers,” what will want is simple!!!”
“A Review of the entire Gamut of the Power Sector Privatisation Exercise or total reversal or cancel the process.
Nigerians & Federal Government of Nigeria are being taken for a ride !!!
The Power Sector is heading toward a worst-case scenario.
It is not that we don’t have the gas. We are a gas-producing nation for crying out Loud. Even at the moment, we can still generate 5,700 megawatts”
He asked, why are we being messed up by the Smart Guys.
“The Nation’s Energy Energy vis a vis Grid Sourced Energy is being manipulated and mess up by conflict of interest and outright greed”
Olusola Bello