Power Sector: "States, Local Governments, Private Companies Should Be Allowed Free Entry, Exit" Says Fashola …Urges NASS Power Committees to propose Constitutional Amendments to stimulate competition Dec 8, 2011 - Lagos State Governor, Mr. Babatunde Fashola (SAN), Thursday called for the liberalization of the Power sector to allow as much free entry by states, local governments and private companies saying it is the only means to solve the current deficiency of power in the country.
Governor Fashola, who spoke at the Lagos House, Ikeja while playing host to members of both the Senate Committees on Power and the House of Representatives Committee on Power who separately paid him courtesy visits, said by such liberalization, idle capital lying outside the system would be attracted into the sector to boost power efficiency.
Pointing out that such move would deepen the sector, Governor Fashola said, however, that the entry of the states, local governments and private companies depend on the kind of regulations and laws made by the Legislature which would either encourage or be a disincentive to investment,
"A situation where people are not inspired, because of regulations, to intervene will only bring lukewarm investment", the Governor said pointing out that it is only when the economy is opened up that the idle capital outside would flow in and boost the power sector.
He said the last Constitutional amendment process was a disservice to Nigerians because the people would have benefitted more from a constitutional amendment that fully liberalized participation in power.
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"I think as we move towards another amendment, this are areas where your Committee must be particularly definitive in proposing changes that will that will stimulate competition".
"Let me say by way of emphasis that inspite of the fact that we cannot distribute power because the constitution does not allow it, there have been no guidelines or regulations published as to where the grids are".[/b]
He urged the Committee to look at the possibility of publishing in a gazette where the grids are located and also consider the prospects of granting authority to the Power Holding Company Limited (PHCN) to cede power to localize supply through an exchange or agreement to carry it out on behalf of PHCN.
Governor Fashola stated that Lagos State has succeeded in creating a partnership for transformer manufacturing which has created employment for 75 Nigerians just as the line for manufacturing meters is already completed.
The Lagos State Governor who also reiterated his call for a democratization of the power sector in Nigeria when he received the members of the Senate Committee on Power said if a particular policy has been adopted for over 50 years without producing the required results, the nation should be ready to try new things.
He informed the Committee which was led by Senator Philip Aduda that there are about 40 uncompleted rural electrification projects being undertaken by the Federal Government in the State.
The State Governor also informed that the State Government has confronted a local challenge of the National Independent Power Project in Epe by acquiring for public interest a parcel of land which has become a subject of litigation and slowing the NIPP project.
He reiterated that the State has also been very active in the generation of power by completing work on the Akute Independent Power station which is generating 12 Megawatts that is being used to power the Adiyan and Akute Waterworks that has increased the capacity of water from the waterworks.
He said the 10 MW capacity Island Power Project is generating electricity which is lighting many structures on the Lagos Island including the State House, Marina, the General Hospital, the Island Maternity, the High Courts and Magistrate Courts thus freeing up power supply by NEPA for public usage.
Governor Fashola said the State has already carried out a power audit on the Lagos Island for 500 homes which comes to 114 megawatts, stating that the turbine provider is ready but there is no gas to power it.
He stated that the independent power plan for the State Secretariat is also ready as the site has been cleared and government will sOon sign the power purchasing agreement that will allow public power being used now to be freed up for more public users.
In pursuit of a pragmatic agenda to capture the actual power needs in the State, Governor Fashola disclosed that a website has been opened where people can get a calculation of what power they currently use towards having an idea of what the individual power needs are.
He gave a commitment to the members of the two committees that if there is any way they think the State Government can contribute to their deliberations on the way forward for the power sector they would gladly avail themselves.
Earlier in his address, the Chairman of the Senate Committee on Power, Senator Philip Aduda said the team was in Lagos to see the level of implementation of the National Independent Power Projects and other power plants in the State.
He said the Senate Committee will remove all barriers in the legislative process and would encourage the States and the Local Governments to participate in the distribution process.
Senator Aduda who commended the good works of Governor Babatunde Fashola (SAN) in transforming the State acknowledged that Lagos is working because of the visionary leadership being provided by the Governor.
Also speaking during the visit of the House of Representative Committee on Power, Hon Patrick Ikhariale said Lagos Sate has seen development beyond everyone's imagination because of the innate leadership qualities of Mr Babatunde Fashola(SAN).
He added that the House Committee is in Lagos to assess the two distribution companies of Eko and Ikeja and the progress they are making because Lagos is the epic centre of all activities.
Hon Ikhariale said though the power sector in Nigeria is far from where it ought to be, the efforts of people like the Governor in terms of independent power plants and the State's plan to collaborate with the Federal Government in certain aspects is gladdening.
He said the House Committee in performing its oversight functions will open up the process by freeing up the space for private sector participation in the power sector, stating that investment in the power sector will generate jobs.
"Part of our focus is to ensure that government policy is driven to its logical conclusions by ensuring that money is appropriated for the power sector and also track the spending of such monies", he said.
Among those who were present during the visits were members of the State Executive Council including the Commissioner for Energy and Mineral Resources, Mr Taofik Tijani, the Commissioner for Rural Development, Hon Cornelius Ojelabi, Commissioner for Home Affairs and Culture, Hon Oyinlomo Danmole Commissioner for Commerce and Industry, Mrs Sola Oworu while the Senate Committee included Senator Chris Ngige and Senator Victor Lar while members of the House Committee included Hon Ibrahim Debo and Hon Abike Dabiri-Erewa among others.
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