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FG will reacquire failed power firms for $1 – BPE

By on November 20, 2015

The Federal Government will take back the power firms privatised in 2013 from their buyers for $1 if they continue to perform below expectation and do not comply with notices from the Bureau of Public Enterprises to improve on their operations.

Such firms would be adjudged to have failed and would have their ownership transferred to the Federal Government automatically, the Director-General, BPE, Mr. Benjamin Dikki, said in Lagos on Wednesday during a post-privatisation monitoring of the Eko Electricity Distribution Company.

The monitoring of the power firms is a nationwide exercise, which commenced last year.

Dikki said, “If the recently privatised power generation and distribution companies don’t perform, we will give them notices to that effect.

“Failure to comply after the notices will amount to the government taking back the companies for $1.”

He confirmed the Federal Government’s 40 per cent stake in the firms, stressing that it remained part financiers of the firms as it had to absorb all the liabilities when the firms were privatised.

The BPE DG said part of the privatisation arrangement was to allow for 10 per cent sale of the firms’ share to the employees from government’s holding, as well as an Initial Public Offer of a part of the holding.

He expressed concern over some of the challenges being faced by the firms, pointing out that the high level of the aggregate technical, commercial and collection losses was worrisome considering the decade-long neglect of the power sector infrastructure in terms of maintenance and reinvestment.

In monitoring the firms after privatisation, Dikki said technical issues like the conditions of the switches, transformers, cables and meter deployment, among others, remained very critical to the BPE.

Other areas being looked at by the bureau, according to him, are issues bordering on the financials, human resource/staffing, health/safety, capital deployment, customer service and community relations, among others.

Earlier, the Managing Director, EKEDC, Mr. Oladele Amoda, commended the BPE for its concern and commitment to the development of the Nigerian power sector, adding that there was a need for more strategic partnerships.

Amoda said the company remained committed to delivering the dividends of privatisation to its customers, and would continue to do its best notwithstanding the huge environmental challenges confronting it.

He said EKEDC had continued to invest in its network and had recently reinforced its metering programme to carry along more customers under its Credit Advance Payment for Metering Implementation and the traditional metering schemes.

Responding, the BPE boss said power firms were expected to start making normal losses five years after privatisation, and subsequently incorporate the losses in their tariffs.

[Punch]