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Staggering sums injected by the Federal Government into the rehabilitation and expansion of power infrastructure from 1999 to date have yielded little because institutional structures of old continue to blight the potential for improvement. The reform process has to be firmly re-tracked if the power sector is to be redeemed.
The Minister of Power, Barth Nnaji, who, regrettably, has come to symbolise the government’s ambivalence over the reform process, evinced little inclination for the pace of divestment demanded by the EPSR Act, 2005, when he promised “continuous reorganisation of the industry” in response to the system collapse of March 15, 23 and 26 and the accompanying nationwide blackouts.
According to him, “a number of power plants have gas constraints in transportation and some are not getting at all….The second one has to do with transmission and the management of the transmission networks….” For remedies, he declared, “we are making some adjustments in the management of Power Holding Company of Nigeria successor companies and system.”
The chief executive officer of Transmission Company of Nigeria, PHCN’s Marketing Operator and its Executive Director of Human Resources, have since been compulsorily retired and replaced. Similar actions were taken by Nnaji in August, 2011 when he terminated the appointments of CEOs of four distribution companies for “non-performance”.
The expected improvement in service delivery was not achieved, as evidenced by the lingering electricity crisis and the April 5 retirements. Clearly, the underlying causes of the power sector quagmire have not been addressed, and the explanation for this is in Nnaji’s highly questionable management of the EPSR and the Road map for Power Sector Reform, launched by President Goodluck Jonathan in August, 2010.
Hiring and firing of CEOs and other key functionaries of PHCN and its successor companies is, in practical terms, a disservice to Nigeria because it creates an illusion of corrective action by the authorities while public sector divestment is being deliberately stalled.
PHCN should have effectively disappeared from the scene and replaced by fully privatised successor companies before now if, as Chairman of the Presidential Task Force on Power and chief implementer of the road map, Nnaji had been sufficiently committed to a vision of a liberalised and productive power sector.
Difficulties with “transmission network” should not have arisen at this point because, by the performance targets and timelines set out in the road map, TCN should have been under technically competent private sector management by December 2010.
Again, the talk of “gas constraints” is, to say the least, revolting because the road map had promised expeditious implementation of the National Gas Masterplan to ensure that “in the period up to April 2011…there will be enough gas supplied to power producers (circa 1,636 mmscfd) to support the targeted increase in actual generation capacity of circa 7,000MW.”
It definitely does no credit to the government that beyond the establishment of the Nigeria Bulk Electricity Trading Company in September 2011 (purportedly to guarantee hitch-free transactions between producers/sellers and purchasers of gas) and the outrageous spending binge by way of contracts for power projects, nothing of practical value is available to electricity consumers in Nigeria, today.
That the international oil companies have yet to be motivated by the creation of the bulk trader to increase gas supplies is a clear suggestion that pricing of gas and guarantee of prompt payment are not the primary inhibiting factors. As shrewd investors, the IOCs know when there is genuine commitment on the part of regulators/governments to reform and when to adopt a simple wait-and-see attitude.
The image of government in Nigeria is grievously sullied by the stupendous outlay on power infrastructure and the virtual absence of accomplishments. Whereas the administration of ex-President Olusegun Obasanjo expended a total of $13.27 billion on the rehabilitation and expansion of such infrastructure between 1999 and 2007, as disclosed on March 11, 2008 by then Minister of Energy (Power), Fatimah Ibrahim, generation capacity never exceeded 3,000 megawatts. Under late President Umaru Yar’Adua, over $6 billion was expended on that sector, but also without any tangible results.
Where does this lead President Jonathan? Given the unusual rapidity with which contract awards are made and scandalous variations of previous contract sums approved by the Federal Executive Council, it is rather difficult to arrive at any accurate figures yet. All that is known is the claim by Nnaji that generation capacity is now 4,200MW and even that is a most unimpressive figure when juxtaposed with the 2,000MW plus in 1999 and the investments purportedly made thus far.
In the face of evident dysfunction in government, when the capacity for service delivery is manifestly lacking and huge expenditures are unaccounted for, citizens cannot shirk the constitutional responsibility to defend the vital interests of the state through constructive activism. Investments in the power sector before and since the commencement of the scandalously mismanaged reforms present a challenge to Nigerians. The very least they can do is to demand accountability and appropriate punitive action where deviations from public service regulations are established.
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