Privatization fraud and it's end in view.

By Babatunde Raji Fashola:

To all those who daily engage me on the power situation in their respective places of abode and their experience with the Discos on 'crazy estimated Billings & power outages', here’s the best explanation for you;

“In 2011, Jonathan sold our electricity distribution licenses to incompetent companies that have no experience on electricity. When the then Minister of power; Prof. Barth Nnaji advised that it was not a good decision, he was sacked immediately and replaced with Prof Nebo. You remember?

This contract of sale of the electricity distribution licenses were made irrevocable but renewable. To this end power became privatised since 2011.

When this government came on board, it discovered that the DISCOS were not ready to render services but to reap and recoup their investment capital immediately. The government could not repudiate the contracts because of the irrevocability clause and the doctrine of sanctity of contract. The hands of government became tied.

Then the blame is on government because the masses are unaware that power like telecommunications has been privatised by the PDP. They sold the licenses to their girlfriends and cronies that were hitherto into fast food business. The DISCOS started disconnecting communities from the the supplies in the name of estimated bulk billing system.

This government stepped in and went out of its way by providing incentives such as duty waivers and credit facilities to the GENCOs. This was done to boost power generation which was less than 3000 megawatts at the time Buhari took over. Today, power generation is over 7000 megawatts!

There is electricity but the distribution is the problem. The DISCOs are not ready to provide pre-paid metres, transformers amongst others to consumers. The estimated billing system and bulk billing system are frauds.

Next year, the licenses of these capitalist rapists will become due for renewal and they are already shivering that this government will not renew that stupid contract that kept us in darkness."

IT WILL NOT BE RENEWED
Minister Raji Fashola

Ok we blame pdp on power, what about economy. Prices of food stuff are going up every day, who do we blame for that??

I hope they won’t end up renewing their license

Government should revoke all their contract from transmission to distribution... companies like seimen should be brought in to level up generation and distro.

New companies coming in must be listed on Nigeria stock exchange so that their activities will be public.

Though I do not believe this news because Fashola is no more the minister of power

Nah one of the wahala GEJ Government put us into be this.

I hope the Government won't renew their license when it expire.

Well, I am going to defend the privatization process.

You see, when we got power privatized, the government retained the control of the pricing system

That meant that prices charged by DISCOS were often times below the cost of producing the same power. Meaning the DISCOS could not make enough money to pay the GENCOS, and to pay for improvements.(That's why DISCOS and GENCOS were losing money)

Then there was the issue of some (not all, and I should say that they are in a minority) people also not paying for power, and the corruption inherent in the collection of bills.

At the end of the day, DISCOS were not making money, but were losing money, simply because they were not allowed to set the price they wanted to set.

Unlike the GSM companies...who were allowed to set their prices...to the point that getting a GSM number in the good old days cost as much as N10000 or far more....and they made enough profit to eventually cut prices, and expand facilities, power companies, were left in the lurch.

(Even Prof Nnaji has an interest in a GENCO...so he is one of the beneficiaries. Yes, he was sacked because of that interest, but that was what the people who did not like him used to get rid of him).

The moral of the power sector is simple. Businesses run on profit making. And if you allow government to control their prices so as to help the poor, they will lose money.

The GSM sector was allowed to make a profit...which is why it is vibrant. Power has never been allowed to make a profit, which is why it has problems (at one point it cost N53 to make one kwh of power, and we were paying as low as N20-30 for that same kwh of power.).


Now the government knows this. Both this government, and all the past governments. But because Nigerians are mostly poor people, and because allowing power companies to charge at market price is going to make many people suffer a lot in paying more for power, and then lead to mass protests , and disorder, they would rather chase shadows like the above propaganda article posted by OP...and blame each other...instead of blaming the bad idea of price controls.

For a clearer understanding of the problems in the power sector, read this report by PwC .

anorexicmuster:
Well, I am going to defend the privatization process.

You see, when we got power privatized, the government retained the control of the pricing system

But why can't govt subsidize power instead of controlling the price until the power companies like gsm companies make enough profit and cut prices ??

teamoneline:


But why can't govt subsidize power instead of controlling the price until the power companies like gsm companies make enough profit and cut prices ??

They have been subsidising power since 2013

Infact CBN paid 1.3trillion in subsides to the powwr sector last year.

When you bring in price controls for anything, subsidses have to be paid to cover the losses.

The problem with subsides is that as the cost of production increases so does the amount governent needs to pay in subsides. And subsides don't do a good job of covering for losses. Then there is the corruption

As for Gsm companies, because they made enough profit, they were able to expand service and make enough of a profit to cut prices. Also they were able to reduce operating costs by building more facilities

Fake news.
Fashola is too smart to regurgitate this communist garbage.
I suspect one of the fake "activists" or an extremely ignorant fellow is behind this "news".

Power has never been privatised fully because the government still set the price.

teamoneline:


But why can't govt subsidize power instead of controlling the price until the power companies like gsm companies make enough profit and cut prices ??

It is subsidy that got us into this problem in the first place.
Subsidy and failure moves together.