Non-Enforcement Of Performance Agreements, Major Cause Of Poor Performance In Power Sector


Olusola Bello

In spite of the huge investment it has put in the power sector, President Muhammadu Buhari’s administration has its own share of the blame, when it comes to the poor performance of the power sector industry operators have said.

The president recently blamed the poor performance of the sector on the fact that the investors who purchased the assets are not engineers.

According to him, the investors are not engineers that is why the companies are failing.

This statement has got some of the operators talking and saying that one of the major factors responsible for the current failure of the power sector has been the government’s failure to enforce the rules governing the operations of the industry after the assets were sold.

They wonder why government agencies have refused to monitor the investors and enforce the performance agreements signed with the government after the assets were handed over to the investors.

They also asked if Aliko Dangote that presides over multibillion dollars engineering infrastructure in Nigeria and Africa is an engineer, and yet he has recorded huge success in his operations.

According to some of the industry operators, Government’s role is to monitor the companies to see that they adhere to what they agreed with the government that they would do after taking over. For instance government through its agencies are to ensure discos to collect and remit revenues to other players along the power value chain in order to enhance the performance of the industry. But whereby there is no data to know how much the discos’ collect and the government agencies look the other way, it is difficult to blame the non-performance to other players.

The government agencies such as Nigerian Electricity Regulatory Commission (NERC) and the Bureau of Public Enterprises (BPE) that are supposed to be at the forefront of the fight for better services are not doing anything. The agencies lack the capacity to monitor the Discos and Gencos because in some cases they are members of board of directors of some of these companies.

Unlike during President Goodluck Jonathan administration when there was a task force looking into the activities of companies, the task force tried it best because there were knowledgeable people in the taskforce that understand the pranks of the companies, one operator said.

Why is the government leaving the monitoring of the companies with BPE which is also a director in some of the companies, they asked.

“BPE was supposed to have earlier assessed the performance of the Discos but it was shifted to 2020, but it has even failed completely to do that now.” Said a consultant.

According to some of the operators, one critical area that the government has contributed to the poor performance of the companies was in the selection of those who should be commissioners in NERC.

Most of the commissioners they alleged know very little about the industry or do not know anything. They then asked, what are the Key Performance Index for NERC, and who supervises it.

The Power sector and the agencies they claimed have not been evaluated for the past eight years as people appointed into key are selected based on cronyism.

Government officials are accused of being more interested in projects execution as against policymaking.

On the issue of whether the investors are engineers or not, the first major faulty step this administration took was to have appointed Babatunde Raji Fashola as minister of Power while he was also handling two other critical portfolios. He was always in conflict with the operators because he does not understand the system.

As far as the operators are concerned there are enough engineers in the ministry of power yet the power sector is performing poorly.

The last minister of power, Mamman Saleh, is an engineer, but yet, he has no record of performance anywhere before he was appointed minister.

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