kalokalo:

How I wish the electricity sector would be deregulated so that the gains we're all seeing in the telecom sector would be replicated there. No one has to beg private individuals to invest in telecom infrastructure like we are begging private investors to biuld refineries and power plants with no success. They invest because the regulatory environment is conducive and government does not dictate the prices they can charge as we are seeing in the power and downstream petroleum sector. The day Nigerians can have electricity in their homes and businesses without subscribing to PHCN marks the day PHCN will go moribund like Nitel and the beginning of our national revival.

So folks, when you keep asking government to run sectors it has no business in, remember we all suffer like we're suffering now with electricity.

Power is inherently different from the telecom sector because it is a basic amenity and the price has to be somewhat regulated. Even here in the US, the prices are regulated and the providers cannot raise prices without going through some oversight committee.

But you’re right that what will bring about PPP is a well laid out policy.

paddy_lo:

I dont buy that basic amenity B.S. . . .Let there be light and if ppl can only afford it 3hrs a day. . so be it

but GOVT must hands off power in NIGERIA. . .

Wallie:

Can you name a country that has done it the way you're advocating and how's it working out for them?

kalokalo:

Government has to hands off power in the sense that they should have no involvement in the provision of electricity service. Their role should be strictly limited to regulation NOT service provider (similar to a state public service commission in the US). If government remains a market player, we will pray for electricity till eternity and nothing will change. PHCN has been a government monopoly since independence and still cant boast of efficient power delivery. Just imagine if Nigeria had to depend on Nitel for all the progress we're seeing in the Telecom sector!!!

In the US, investor owned utilities are allowed to charge prices that are cost reflective. In other words, they can earn a profit premium of no more than 18% on their running costs. I know this because I was an engineer at Consolidated Edison in NYC and I made rate case interrogatories with the NY PSC. A situation where PHCN can not charge end consumers more than N6 (due to NERC Multi year tariff regulations) per kwh while their generation cost alone is N22 per kwh is unsustainable and not bankable. I definitely won't get a bank to lend me money to build power plants when the person I'm selling power to can't recover his costs to at least pay for my service. I'd rather prefer to distribute myself and recover my costs but the law specifically bars generation companies from distributing.

With this scenario, power supply in Nigeria will remain a pipe dream. Power is highly capital intensive (i.e high investment risk) and the ROI must justify investment of such magnitude. The existing regulatory framework is NOT conducive.

Government has to hands off power in the sense that they should have no involvement in the provision of electricity service. Their role should be strictly limited to regulation NOT service provider (similar to a state public service commission in the US). If government remains a market player, we will pray for electricity till eternity and nothing will change. PHCN has been a government monopoly since independence and still cant boast of efficient power delivery. Just imagine if Nigeria had to depend on Nitel for all the progress we're seeing in the Telecom sector!!!

In the US, investor owned utilities are allowed to charge prices that are cost reflective. In other words, they can earn a profit premium of no more than 18% on their running costs. I know this because I was an engineer at Consolidated Edison in NYC and I made rate case interrogatories with the NY PSC. A situation where PHCN can not charge end consumers more than N6 (due to NERC Multi year tariff regulations) per kwh while their generation cost alone is N22 per kwh is unsustainable and not bankable. I definitely won't get a bank to lend me money to build power plants when the person I'm selling power to can't recover his costs to at least pay for my service. I'd rather prefer to distribute myself and recover my costs but the law specifically bars generation companies from distributing.

With this scenario, power supply in Nigeria will remain a pipe dream. Power is highly capital intensive (i.e high investment risk) and the ROI must justify investment of such magnitude. The existing regulatory framework is NOT conducive.

I think people clamoring for zero regulation of a public private partnership are being shortsighted. "To see what is in front of one's nose requires a constant struggle." Do you know what will happen if we’re being shortsighted?

1.   Take a look at the oil-producing region for a clue. Despite the profits being made, you have catastrophic environmental damage, mostly foreign skilled personnel, highly underdeveloped region etc. Compare the Niger Delta to the Gulf of Mexico to see what the right amount of regulation can achieve.

The Federal Government was able to provide electricity during the late eighties, why cant they do it now?

paddy_lo:

The issue is that the Nigerian GOVT should not run things like power,refineries and so on
They should not be spending and wasting money on such things. . .

paddy_lo:


What was your GDP in the 80s and what is it now?

What was your population in the 80s and what is it now?

Sometimes u guys baffle me. . . . .It is expected that we need a minimum of 40,000MW by 2020 just to keep up with population growth

It cost an average of $1million to produce 1mw

so we are talking close to $40billion - $50billion just on generation

u need to spend money on transmission, and distribution infrastructure

where will that money come from since no bank(anywhere in the world) whose management is not insane will lend i cent to PHCN

hercules07:

Government's role in power industry should be to regulate and as a producer and transmitter with other players, we can not hand over power fully to the private sector (imagine MTN times infinity), what we need to understand is that we need the government to carry out some duties, we can not outsource all the functions of the government, telecoms is child's play compared to power, your typical MTN is a giant PBX, power is too damned capital intensive to leave in the hands of people whose first thought is how to milk the general populace. We need the government to be efficient in certain areas such as provision of water, road and other infrastructure. A government that does not carry out its function and gives the power sector to private people will balkanise the country, the people in cities (due to higher purchasing power) will have light, the ones living villages and towns eking out a living will not, causing rural urban shift, congesting the urban areas and leading to more issues, we actually need our rural areas to retain the people. The Federal Government was able to provide electricity during the late eighties, why cant they do it now?

There is no enterprise that Government runs in Nigeria that works. The list is too long to regurgitate here. Even the act of governance by Nigerian governments fails. Power generation, transmission and distribution is too critical to be left to the bureaucratic bottlenecks and red-tape of the state. Government participation in the industry only hamstrings development in the sector. What is needed is regulation NOT participation.

I respectfully say that Hercules07 is naive to keep demanding efficient power delivery from the government when the nation's experience since independence points to the contrary.

zoelife:

Good one for Naija.This Fola Adeolu guy is really someone to watch.

4llerbuntu:

MARK MY WORDS, YOUR INTERNET[b] WILL NOT BE ANY FASTER!!!![/b]
wonder why all these misguided noise!!

tseew, no be naija be dis, or is it main one that will supply u band width directly? with the cartel model being run in telecoms?

and can some body pls explain to me why starcomms subscription for 1x is N10, 000 a month? 1x internet