28 April 2010

Nigeria: Govt to Privatise Power Holding, Lagos Distribution Companies

Abuja — Federal Government is proposing to sell three of the Power Holding Company of Nigeria's successor companies, the Port Harcourt and Lagos Distribution companies (Eko and Ikeja) to private sector concerns before the end of the year.

A Presidency source told THISDAY yesterday that plans are under way to privatise the three PHCN distribution entities in Port Harcourt and Lagos as a pilot scheme meant to pave the way for the eventual transfer of the ownership stake in the other distribution companies to private sector interests.

He said the decision to privatise the Port Harcourt distribution company was sequel to moves being made by four state governments namely Rivers, Cross Rivers, Akwa Ibom and Bayelsa to acquire the Port Harcourt power company.

"The three PHCN successor entities are being considered as strong in terms of their commercial potentials and market value and government is planning to use them as a pilot scheme to kick-start its power sector reform package. Also there have been requests by some state governments in the South-South to acquire Port Harcourt distribution company," he said.

The Port Harcourt Distri-bution company covers Cross River, Rivers, Bayelsa, Akwa Ibom while Eko and Ikeja distribution companies are responsible for the supply of electricity needs of the entire Lagos and environs.

According to the source, governors of Rivers, Cross River, Akwa Ibom and Bayelsa states had at a recent meeting with Acting President Goodluck Jonathan in Abuja canvassed approval to enable them take over the management of the Port Harcourt distribution companies.

At the meeting, however, it was gathered that the Acting President expressed government's readiness to accede to the governors' request but advised them to go and float a Special Purpose Vehicle and to submit bid to the Bureau for Public Enterprises (BPE) for consideration.

Jonathan said the directive that the states should float a company or partner with an existing private entity is in keeping with the policy of discouraging further government ownership and management of the privatised power assets.

Following the inability of the Federal Government to fully fund the power sector, officials of the Federal Ministry of Power recommended the adoption of Public Private Partnership (PPP) as a strategy for bridging the gap during a recent workshop held in Lokoja, Kogi State capital.

One of the immediate fall-outs of the government's decision to implement the Power Sector Reform Act of 2005 was the legal transfer of assets, liabilities and employees of former PHCN to the "unbundled" successor companies.

In keeping with the provisions of the Power Sector Reform Act (2005), BPE had under the Obasanjo-led administration brought into being 11 companies in the electricity distribution sub-sector, eight power generation firms and a transmission company and immediately effected the legal transfer of assets, liabilities and employees of former PHCN to the "unbundled" successor companies.

Abuja Distribution Company serves the Federal Capital Territory (FCT), in addition to Kogi, Niger and Nasarawa states while Kaduna Company serves Kaduna, Zamfara, Kebbi and Sokoto States.

Kano distribution company supplies power to Kano, Katsina and Jigawa states, Yola takes care of Adamawa, Taraba, Bornu and Yobe states while Jos-based company will oversee supplies to Plateau, Bauchi, Benue and Gombe states.

Enugu Distribution Company covers the entire South-East states of Enugu, Anambra, Imo, Abia and Ebonyi, while Benin is responsible for power supply to Edo, Delta, Ekiti and Ondo states.

The Port Harcourt and Ibadan Distribution companies are to ensure power supply availability to Cross River state, Rivers, Bayelsa, Akwa Ibom and Oyo, Ogun, Kwara and Osun states respectively.

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