The President of the Nigerian Consumer Protection Network, Kunle Kola Olubiyo, has said that for electricity generation to be done right in Nigeria, it has to be controlled by the private sector, as the public sector has a mindset of “wastages”.
Olubiyo said this in an interview with ARISE NEWS on Tuesday while discussing the importance of privatisation in Nigeria’s power sector.
He said, “For us to get it right, generation has to be private sector led, because public sector business model is not about making profit. I’ve seen an agency of government – without fear of contradiction – that issued out a job in Delta and Akwa Ibom State for 13 billion, and they used 600 million to execute the job, and so, there was a profit margin of 12.4 billion. That is public sector mindset, which is about wastages.
“The private sector business model is about efficiency and revenue optimisation, customer centricity, and what have you. So, generation as it were is public sector led. Distribution, as it is, is public sector led with some semblance of equity with government having a stake. So, Transmission Company of Nigeria, as it is now, is a misnomer to remain a public sector business model as a cash cow. We want the national grid that is within the purview of the federal government to be completely privatised.”
Further speaking on what he had referred to as the wastages of the public sector, Olubiyo said, “You will see a house being occupied by government officials, they will get approval six time of 10 million to do renovation. When they get one approval, they will detach or remove them from the file, open another temporary file or create another policy file, and represent the approval, and they will still get approval. So, all those manners of wastages, President Olusegun Obasanjo, in his wisdom and under his leadership, decided that such houses should be sold to public servants and the burden is now taken away from government.
“The same thing happened in the power sector, it’s a learning curve. The essence of privatisation is that we had a system where the depth of investment was very very low, and in reality, government has a lot of competing demands and could not make the competing mileage of the power sector. So, federal government decided to privatise. But the mistake we made then is that privatisation itself was predetermined, it was not subjected to global best practices, the right sets of licenses were not selected, it was predetermined by BP.”
He then said that the essence of privatisation was to create a competitive electricity market as he explained, “Competition to us as end users, consumer protection, we don’t have right to alternative or to make choice.”
“The customers invest in the network, and without template for refund of our money. So, what the privatisation has brought about is competition that is most efficient. But what we have at the moment, in the last 11 years, is an entrenchment of market monopoly,” he added.
Olubiyo then welcomed the recent 5th alteration of the Nigerian Constitution, which moved electricity from the exclusive to the concurrent list as he said, “The milestone that we’ve achieved is that we did amendment, 5th alteration of the constitution, moving electricity from exclusive list to concurrent list. That means that the states now have responsibility.”
Speaking further to the importance of privatisation of the power generating sector, he said, “In 2014, there were about 14 IPPs, Independent Power Plants, that applied to NERC, that applied to EMBED, that applied to TCN. They raised bonds, they were in Nigeria for about 10 years. They wanted to invest in off grid renewable energy, But because of bureaucratic bottlenecks, they were not granted license.
“So, the electricity act, what it aims to achieve is that the states now can grant license for generation, transmission, and distribution intrastate, that is, not within the purview of the national grid, while the regulatory agencies- NERC and NEMSA, will manage the grid.”
Olubiyo then said, “Our major concern is that if you are not satisfied… of course we are grossly dissatisfied, we don’t have alternative. And that is what we said the states should do with the Electricity Act – providing, they can do their own network.”
Ozioma Samuel-Ugwuezi
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