12 November 2012

Nigeria: Privatisation - House Committee Decries Non-Funding of Electricity Firms in 2013 Budget

The House of Representatives Committee on Power has decried zero allocation to electricity generation and distribution companies in the 2013 budget estimates.

Rep. Patrick Ikhariale ( PDP-Edo), the Chairman of the committee, said this at a news conference in Abuja on Monday.

Ikhariale said that the on- going privatisation of the electricity sector would be a failure, if the Executive arm of government failed to make provision for it in the 2013 budget pending when buyers take over the companies.

The lawmaker, who said for the process to be successful, it must be transparently and diligently carried out, remarked that : " I believe in privatisation process, but it must be carried out with transparency and diligence."

According to him, if fund was not allocated to the sector because it would be privatised , Nigerians would experience acute power shortage in 2013.

"If money is not make available in the 2013 budget, it will be difficult for power generation in 2013.

"Even though we know that the process is going on, we must not allow a stop-gap in the process," he said.

He said that bidders who paid for the companies did so because they expected the companies they are acquiring would function.

"We are using this opportunity to demand that due diligence should be followed by including smooth transmission in the process.

"We must apply due diligence in the privatisation process to forstall power failure in the country.

"If we do not make provision for continued supply of electricity, we will have a near collapse of distribution companies.

"If there is a major breakdown in any of the generation and distribution companies as a result of lack of follow up because of no funding, we are going to have a situation that will lead to a floodgate of litigations from buyers."

Noting that privatisation did not stop at mere transparency in the process, Ikhariale insisted that due diligence must be followed.

"Due diligence for this purpose means and includes taking necessary steps that will lead to a smooth transition between the buyers and the Federal Government.

The lawmaker noted that Nigerians cannot afford the failure of this process like the previous ones.

"Nigeria cannot afford to have a failed sale process. The executive must take a second look at making provision for the generation and distribution companies in the 2013 budget, in such a way that the privatisation will glide smoothly to an expected end," he said.

He said that presently, no electricity generating company was generating electricity up to 35 per cent capacity.

Ikhariale therefore expressed the need for the legislative and the executive arms to interface on the matter.

It would be recalled that the National Council on Privatisation ( NCP) on Oct. 29 announced final winners of the bids for the power plants and distribution companies.

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