Power: FG to Privatise PH, Lagos Distribution Companies

•South-South governors show interest
From Onyebuchi Ezigbo in Abuja, 04.28.2010

Federal Government is proposing to sell three of the Power Holding Company of Nigeria’s successor companies, the Port Harcourt and Lagos Distribution companies (Eko and Ikeja) to private sector concerns before the end of the year.

A Presidency source told THISDAY yesterday that plans are under way to privatise the three PHCN distribution entities in Port Harcourt and Lagos as a pilot scheme meant to pave the way for the eventual transfer of the ownership stake in the other distribution companies to private sector interests.

He said the decision to privatise the Port Harcourt distribution company was sequel to moves being made by four state governments namely Rivers, Cross Rivers, Akwa Ibom and Bayelsa to acquire the Port Harcourt power company.

"The three PHCN successor entities are being considered as strong in terms of their commercial potentials and market value and government is planning to use them as a pilot scheme to kick-start its power sector reform package. Also there have been requests by some state governments in the South-South to acquire Port Harcourt distribution company,” he said.

The Port Harcourt Distri-bution company covers Cross River, Rivers, Bayelsa, Akwa Ibom while Eko and Ikeja distribution companies are responsible for the supply of electricity needs of the entire Lagos and environs.

According to the source, governors of Rivers, Cross River, Akwa Ibom and Bayelsa states had at a recent meeting with Acting President Goodluck Jonathan in Abuja canvassed approval to enable them take over the management of the Port Harcourt distribution companies.

At the meeting, however, it was gathered that the Acting President expressed government’s readiness to accede to the governors’ request but advised them to go and float a Special Purpose Vehicle and to submit bid to the Bureau for Public Enterprises (BPE) for consideration.

Jonathan said the directive that the states should float a company or partner with an existing private entity is in keeping with the policy of discouraging further government ownership and management of the privatised power assets.
Following the inability of the Federal Government to fully fund the power sector, officials of the Federal Ministry of Power recommended the adoption of Public Private Partnership (PPP) as a strategy for bridging the gap during a recent workshop held in Lokoja, Kogi State capital.

One of the immediate fall-outs of the government's decision to implement the Power Sector Reform Act of 2005 was the legal transfer of assets, liabilities and employees of former PHCN to the “unbundled” successor companies.

In keeping with the provisions of the Power Sector Reform Act (2005), BPE had under the Obasanjo-led administration brought into being 11 companies in the electricity distribution sub-sector, eight power generation firms and a transmission company and immediately effected the legal transfer of assets, liabilities and employees of former PHCN to the “unbundled” successor companies.

Abuja Distribution Company serves the Federal Capital Territory (FCT), in addition to Kogi, Niger and Nasarawa states while Kaduna Company serves Kaduna, Zamfara, Kebbi and Sokoto States.

Kano distribution company supplies power to Kano, Katsina and Jigawa states, Yola takes care of Adamawa, Taraba, Bornu and Yobe states while Jos-based company will oversee supplies to Plateau, Bauchi, Benue and Gombe states.

Enugu Distribution Company covers the entire South-East states of Enugu, Anambra, Imo, Abia and Ebonyi, while Benin is responsible for power supply to Edo, Delta, Ekiti and Ondo states.
The Port Harcourt and Ibadan Distribution companies are to ensure power supply availability to Cross River state, Rivers, Bayelsa, Akwa Ibom and Oyo, Ogun, Kwara and Osun states respectively.

Source: http://thisdayonline.com/nview.php?id=172034

Lets wait n see what happens nxt.

In everything,the issue of billing should be sorted out. Ensure that what's consumed is what is paid for. Consumer should never be made to pay for what is not consumed. We want real privatisation like in the telicoms not privatisation to family members,cronies & friends.

This is the Best news I have heard since Power reforms started.

This is the beginning of the SOLUTION

this "Before the end of the Year" thing seems to far.

The South South governors seem determined to leverage
the tribe of the Acting President to force this through.

And it just might happen because they and to a lesser extent
lagos can muster the financial resources to make it happen.

I suspect the other ''regions'' will be against it because these
two could use their considerable financial muscle to buy most
of the limited power generated.

doyin13:


I suspect the other ''regions'' will be against it because these
two could use their considerable financial muscle to buy most
of the limited power generated.

lol
thats not even how power is distributed when its privatized.lmfao Go and pic up a book hahaha

@post when all is said and done, more money for those who stole Nigerias money, they will re invest it in the power industry. Concentration on Crude exports will lessen and investment in the power industry will be the "new it"  which Im sure electricity bills will increase because it will be for pure profit. that is alot of money bout to be made on the part of those who are ready to monopolize the power industry, (Dangote, Adenuga, Otedola, etc . . )

Good thinking, but I want actions.

Also however they want to go about this privatization, they should avoid monopoly in every area as much as possible.

Smart move!

The Private sector moves in and competition will drive the stability in the industry.

It also translates into more jobs for Nigerians.

In the end, everybody is happy!

sjeezy8:

lol
thats not even how power is distributed when its privatized.lmfao Go and pic up a book hahaha

hehehehe. . .Now I understand why those Igbo boys find you quite the irritant.

Indulge me though. . Tell me how power is distributed in a privatised environment.

just because it's privatized, doesn't it mean it can't be regulated.

bawomolo:

just because it's privatized, doesn't it mean it can't be regulated.

Privatizing the distribution companies doesn't address the critical problem of generation.

It is highly likely the privatized distribution companies with money behind them could buy
much of the power being generated.

If the government decides to ration the amount of power each distribution company gets
then it defeats the purpose of getting involved in distribution in the first place.

i have no problem with regulation, it's a necessary evil

Yeah just because it is privatized doesn't mean it can't be regulated. What scares me is the price tag they'll put on it. Would it be affordable cause most of these companies only sees Nigeria's economy as easy cash cow. Hopefully it will be affordable if the supply is constant and reliable.!!


Hey canuck buck!! Are you a Vancouver Canuck fan? I'm in currently Vancouver to see my mum and the games against L.A kings was fantastic. Canucks don't know how to party after a nice win though. If they win the play offs, I doubt they can celebrate it like the maple leafs in Toronto did.

doyin13:

hehehehe. . .Now I understand why those Igbo boys find you quite the irritant.

Indulge me though. . Tell me how power is distributed in a privatised environment.

google- independent power producers (IPPs) smart guy, instead of talking like an idiot.
Common sense should tell you that private companies(or in this case states) dont buy from the national grid but add and produce electricity(from, nuclear, bio fuel, coal, solar, Gas, Water etc) for profit and to make sure demands are met.

They add electricity(mega watts) not take or "buy"from the already existing amount of it.

sjeezy8:

google- independent power producers (IPPs) smart guy, instead of talking like an idiot.
Common sense should tell you that private companies dont buy from the national grid but add and produce electricity(from, nuclear, bio fuel, coal, solar, Gas, Water etc) for profit and make sure demands are met.

lol. . . .you feel so smart don't you.

Are you assuming the privatisation of the distribution entities includes any powers to
generate or you know something everyone else doesn't know?

As far as I can tell from the article, there is nothing to indicate the power over generation
will be relinquished by the federal government and all the independent power projects
will still have to run through the national grid.

And seriously. . . . stop being an arse. . . .If you want to comparatively judge the size of your breasts ,
I am sure the likes of Onlytruth, Dede1 and Eziachi will gladly oblige you.

doyin13:

lol. . . .you feel so smart don't you.

Are you assuming the privatisation of the distribution entities includes any powers to
generate or you know something everyone else doesn't know?

As far as I can tell from the article, there is nothing to indicate the power over generation
will be relinquished by the federal government and all the independent power projects
will still have to run through the national grid.

And seriously. . . . stop being an arse. . . .If you want to comparatively judge the size of your bosoms ,
I am sure the likes of Onlytruth, Dede1 and Eziachi will gladly oblige you.

again common sense will tell you that IPPs and private companies cover a certain region and supply power to that region only.

sjeezy8:

again common sense will tell you that IPPs and private companies cover a certain region and supply power to that region only.

na wa ooo. . .U just picked a fight with me for no reason whatsoever
without any handle on the issues.

I guess you did not read the article and understand what is being
proposed for privatisation at the present time.

sjeezy8:

again common sense will tell you that IPPs and private companies cover a certain region and supply power to that region only.

distribution companies like ComEd don't generate power though.

@sjeezy
doyin is actually right here, what the article is concerned with is strictly distribution, you bringing IPP's into it is a long thing, what you described is called captive generation and it has noting to do with the original article. . .(it would work but it's a long expensive process, esp. in naija)

For those worried about price, its the NERC that determines how much consumers pay in nigeria, so whoever buys the coys. Wont be able to bill you to death, however electricity bills are going to double over the next 5 or so years, so people should start preparing. . .lol

@OP
I think the deal will fall through, one major reason is that its the states that want to buy the companies, lagos might be able to run theirs but not portharcourt, the way the distribution grid is set up lumps states together, so putting one state in charge of another states supply wont work(although the states could come together and buy it, but how'll they share the electricity?)
Even if the companies are sold, with the way the sector is run now, there wont be much of a diff. Operationally, their load allocations wont change(i.e. The amount of MW they're allocated everyday), the new owners would be obliged to spend money on improving the infrastructure in addition to the money they woulda had to cough out of various body opening, the whole thing just seems like very bad economics to me