JUMADA-AWWAL 3, 1429 A.H.
FRIDAY, MAY 9 2008
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Power sector: Which way Nigeria?
By IJEOMA NWODWUDWU
A concerned citizen wrote me a terse e-mail last week enquiring what the month-long power probe in the House of Representatives sets to achieve. As far as he was concerned, the probe is a needless distraction that would serve no purpose and does little to solve the nation’s electricity crisis in the immediate to long term. Although he did not go into details, I perfectly understood his line of reasoning. The two week probe has certainly made work a lot easier for Editors and given us cannon fodder for our front page headlines. It has also set tongues wagging across the land but does not add an extra kilowatt of electricity to our homes, offices and factories and, would after the report of the probe committee is made public, be confined to annals of history. Life and business will basically carry on as usual.
Meanwhile, not a word has been heard about an eleven-man presidential committee set up for the accelerated expansion of country’s power infrastructure and is expected to deliver 6,000MW of electricity within 18 months under the National Integrated Power. The mandate also includes adding an extra 11,000MW of electricity to the national grid by 2011 from diverse sources. Set up on February 19 with specific terms of reference, the committee was given 30 days within which an interim report was supposed to have been submitted. The input of the committee is expected to form a vital component to the state of emergency to be declared by President Umar Yar’Adua. But the deadline for submission of the first report slipped past us unnoticed as we focused on the histrionics at the National Assembly.
The Godwin Ndudi Elumelu-led committee at the lower federal legislative chamber should enjoy its ‘15 minutes’ of fame while it lasts. Members of the committee should be applauded for unearthing the sleaze and corruption that went on the power sector in the eight years of the previous administration. They should keep providing comic relief by issuing threats to arrest officials who decline or are reluctant to grace their invitations. They should even threaten to overstep their boundaries by promising to blacklist, detain and prosecute companies and directors/owners of companies that were beneficiaries of the contract boom. As if we don’t have enough law enforcement agencies statutorily set up with those responsibilities.
As this is ongoing, past and present government officials should keep misleading the public with conflicting figures as to what was expended during the period under review. First it’s $10 billion, then it is revised downwards to $5.16 billion, yet again it is upped to $16 billion, and back down to $6 billion. Whatever! The bottom line is Nigeria remains in the dark ages and no concerted effort is being made to drag us out into the modern age where power cuts are far and in between.
The irony is that one of the primary mandates given the eleven-man committee to deliver 6,000MW in the first instance, was to undertake an independent technical, financial and legal audit of the infrastructure in Nigeria’s power sector. Such an audit would have provided the government clarity on existing power infrastructure as well as actual capacity, its state, funds expended within and outside the fiscal regulatory framework, and what more needs to done and invested in the power programme, be it by the private or public sector. That way less time will be wasted listening to sordid details that achieve no purpose and some progress can be made to ameliorate the electricity situation.
Sometime in January, I had written that concentrating too much energy on what transpired in the past will be akin to crying over silt milk. Specifically, I wrote: What this government needs to focus on is how to jump start the NIPP which appears to be the shortest route to tunnelling out of the darkness. First and foremost, Yar’Adua needs to acknowledge and grasp the urgency of the situation…. A technical and financial audit needs to be undertaken as to what has been invested in the last eight years not necessarily to castigate or witch hunt anyone. But to have a clear perspective of what has been done and what else is required to attain and sustain at least 5,000 to 6,000MW of electricity generation, transmission and distribution by the end of 2008 before setting new or bigger targets.
In doing that, the commercial sustainability of the project and running costs ought to be included. I understand from a friend of mine and an expert in the electricity sector that running costs of the plants and entire infrastructure under the NIPP would cost the government at least $1 billion per annum. So if this is juxtaposed against a lifespan of say 20 years, the government would need to anticipate spending an additional $20 billion over the period.
A political champion with a powerful team reporting directly and daily to the president must be constituted…. The commercial viability and sustainability of the programme must be determined and implemented to the letter. One of critical problems that has bedevilled the power sector is the tariff structure. For the plants to remain commercially viable a tariff regime needs to be put in place such that cost recovery by the power plants and downstream segment (comprising distribution and marketing) is guaranteed, and that gas suppliers also get commensurate returns on their investment in the oil and gas sector. Besides, this is one certain avenue through which gas flares can be eliminated in the Niger Delta.
Most critical, is the need to encourage private sector participation in the electricity sector. Given the amount of funds required to keep the sector afloat, it is obvious the government cannot go it alone. Therefore, the privatisation and reform programme needs to be resuscitated and kept on course.”
Gratifyingly, shortly after this piece, an eleven-man committee was set up to chart a way forward for the power sector. Ever since, I have been waiting expectantly to see some motion from this committee and not the commotion emerging from House of Representatives. Personally, I care less about the antics of the members of the House, their summons and the testimonies that alight thereof. And I believe most Nigerians suffering in the dark feel the same way. We have put our destinies into the hands of these eleven ‘wise men.’ So please, we beseech you ‘sensible creatures,’ disappoint us not.
