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The Federal Government must be ready to privatise the successor
companies of the Power Holding Company of Nigeria for the country to enjoy
regular supply of electricity, Bart Nnaji, a professor of engineering and the
president of independent power providers association, has said.

Mr. Nnaji, a former lecturer at the University of Massachusetts,
also called for increased private sector participation in the electricity
industry.

“For the system to work, we need to create credible power
off-taker(s) and to do that, we should think about privatizing or at least
concessioning the PHCN successor companies,” Mr. Nnaji said.

“Like in the telecoms sector, the private sector must be enabled
to take the driver’s seat in the business of providing reliable electricity
supply.”

The Federal Government had, in April 2005, established the PHCN,
an incorporated company, to take over the assets of the defunct National
Electricity power company.

The PHCN was split into three subsidiaries which are the power
generating companies, the transmission company of Nigeria and the distribution
company of Nigeria.

As part of the reforms, the Electric Power Sector Reform Act was
approved which among things established the Nigerian Electricity Regulatory
commission (NERC) to monitor and regulate the electricity industry as well as
issue licenses to marketers.

The regulatory commission established the Multi-Year Tariff
Order (MYTO) to among other things determine the price to be paid by different
categories of electricity consumers. Mr. Nnaji, who lauded the MYTO, however
described its rates as inadequate.

“We, the independent power providers, believe that MYTO rates
are still lower than the rate that would attract investors taking into
consideration that no investor would want to put his money in any project that
would not guarantee a reasonable rate of return on investment,” he said.

Mr. Nnaji, who is also a member of the Presidential Advisory
committee established by acting president Goodluck Jonathan, welcomed the
proposed review of MYTO saying “while this initiative is welcome we sincerely
hope that the review would be robust enough to accommodate the dynamic nature
of such features that underpin the MYTO framework such as inflation rate, and
gas/fuel availability and pricing.”

Inconsistent policies

He blamed inconsistent government regulation for his company’s
inability to complete its 188MW power plant in Aba, Abia State, saying the “Aba
integrated power project will begin the process of commissioning by the end of
this year.

“Unfortunately despite the huge successes that we have recorded
as a pioneer indigenous company in the area of private power provision, we’ve
not been able to commission and commence operations as we had envisaged due to
several reasons, one of which is the government’s near suspension of the power
sector reforms that made foreign investors wary,” Mr. Nnaji stated.

A new minister of power is expected to be named by Mr. Jonathan
after the dissolution of the Executive Council of the Federation which led to
the removal of Lanre Babalola, the former minister.

NEXT in its previous reports on the power sector detailed how
power generation had dropped from over 3,000MW in December 2007 to less than
2000MW during Mr. Babalola’s tenure and how a bulk of the power generated was
by independent, privately owned power plants.