The gradual implementation of the Federal Government's power sector reform is now at full throttle with the opening of the bid for generation companies (GENCOS) that will succeed the Power Holding Company of Nigeria (PHCN).
Chairman of the technical committee on Privatization who is also a member of the National Council on Privatization (NCP), Mr Atedo Peterside said Tuesday at the opening of financial bids for the privatisation of PHCN successor GENCOS held at the Transcorp Hilton, Abuja,, that the power sector in the country has been saddled with insufficient funds and low electricity tariffs.
The bid is part of the government's power sector reform road map which seven pillars include empowerment of an independent regulator (the National Electricity Regulatory Commission-NERC), establishment of a bulk trader and the introduction of cost-reflective electricity tariff that will provide subsidies and cross subsidies for the poor.
According to him, the privatisation of distribution companies and GENCOS, besides the introduction of Manitoba as management contractor to Transmission Company of Nigeria and the strengthening of the fuel to power segment, will liberate the power sector from the Low Equilibrium Trap.
Additionally, he noted that if this is done, it "should help unleash long-term private sector investment activity in the country generally," pointing out that " the electricity sector has segments that are intricately interwoven so in most nations the pace at which results are achieved by the sector, as a whole, is determined by the weakest link in a complex and inter-dependent chain."
Atedo concluded that the "NCP has done its best to ensure that these transactions are accomplished in accordance with internationally accepted standards," stressing that the NCP raised the qualification bar to ensure that only operators who are technically qualified and financially sound make it to the finishing line."
In his remarks, the acting director of electric power department of the Bureau for Public Enterprises (BPE), Alhaji Ibrahim Babagana enumerated the financial bid process, which is in eight steps and said preferred bidders will commence "final negotiations with BPE's team within 15 business days after signing the concession agreement or share purchase agreement."