PRESIDENT Goodluck Jonathan shored up reforms in the nation’s electricity sector yesterday as he approved a pioneer board as well as the appointment of a manager for the Nigeria Bulk Electricity Trading (NEBT) Plc.
The Minister of Finance is chairman of the Board of the NEBT while a echnocrat, Rumundaka Wonodi, will serve as its pioneer Chief Executive Officer.
The NEBT, also known as the bulk trader, was created by the National Electricity Sector Reforms Act of 2005 to fight the single biggest risk in the growth of the power sector – the issue of distribution companies which buy power from independent power generating companies, but are unable to collect enough revenue from consumers to pay for what they bought.
The Power Holding Company of Nigeria (PHCN), which hitherto managed the process owes huge debts from previous power purchase agreements (PPAs) it signed with independent producers such as Agip (N60 billion), Shell and Ibom Power.
The Minister of Power, Prof. Bart Nnaji, said yesterday that NEBT would honour existing PPAs signed by the PHCN and take over the negotiation and signing of future power purchase contracts for distribution companies but it would not assume PHCN’s previous contract liabilities.
This is possible, according to him, because the bulk trader is backed by a government guarantee, which enables it promptly to settle obligations of any distribution company that defaults in payments for power purchased from independent producers.
Nnaji said that the NBET would however not become a government monopoly.
“Distribution companies which ca, are free to sign direct PPAs with independent generation companies,” he said, and further explained that the “NBET shall exist only as long as it takes the distribution companies to become creditworthy and be able to directly negotiate their own power purchase agreements.”
In addition to the Finance Minister and Wonodi other members of the Board of NEBT include Saka Isau (SAN) as vice chairman the Minister of Power; Director-General of the Bureau for Public Enterprises (BPE) and the CEO of Abuja Distribution Company (who will represent the 11 distribution companies’ CEOs).
Also approved by the President as members of the board are Mohammed Umara Kumalia, Haruna Sambo and Paul Usoro (SAN).
Prior to his appointment as CEO of NEBT, Wonodi led the Regulatory and Transactions Monitoring team at the Presidential Task Force on Power, which was charged with driving and monitoring the reform of the power sector.
Before returning to the power sector in Nigeria, he was Director, Wholesale Power Origination, with North America’s largest wholesale power supplier, Constellation Energy Group based in Maryland, United States of America (US).
Wonodi holds a bachelors degree in engineering from the University of Benin, Nigeria, and a master’s degree in business administration (majoring in finance and strategy) from Yale University.
Also, as the move to privatise the Nigerian Telecommunications Limited (NITEL) and Mobile Telecommunications (MTEL) advances, subscribers under the aegis of the National Association of Telecommunications Subscribers (NATCOMS) have called on the Federal Government to halt the process and rather provide a N400 billion bailout scheme to save the telecoms firm.
The National President of NATCOMS, Deolu Ogunbanjo, said in a statement made available to The Guardian yesterday that the bailout was necessary to rescue NITEL from alleged shady deals that might arise from the privatisation. He said out of the N400 billion, N300 billion could be set aside to settle its current liabilities, while the remaining N100 billion would be used as operating expenses (OPEX).
Ogunbanjo called on President Jonathan and other personalities in charge of the privatisation process to critically consider this option, or rather ensure a transparent and competitive bidding.
He warned that government and the BPE should be wary of unnecessary influence of some existing operators in the system.
His words: “We are appealing to all communications-friendly players and stakeholders not to allow this willing-buyer, willing-seller sale of Nigeria’s first national carrier – NITEL-MTEL … as it will mean too many favours to the detriment of other operators. It will create a monopoly and total possession and control by his person and organisation as well as not creating a level-playing field for other network operators and not being competition-friendly. All network players and operators must enjoy healthy and enabling competition-friendly telecommunications policies, administration and regulation to the overall benefit of Nigerians in general and Nigerian subscribers in particular.”
It has been reported in a national daily (not The Guardian) that a telecoms operator was making a move through a letter to the presidency to acquire NITEL through an initial offer of $450 million (about N67.6 billion). According to the report, he allegedly said that he intended to buy NITEL-MTel through a special purpose vehicle claiming that it would run distinctly from his company.
Ogunbanjo said this did not go down well with the stakeholders, as this would amount to monopolizing Nigeria’s carrier status, noting , “the Nigerian subscribers and the telecommunications industry will cherish a competition-friendly telecommunications spectrum given to all industry players and operators and not the concentration of spectrum to favour an operator in the name of SPV’s and willing-buyer willing-seller.”
Besides, Alhaji Mohammed Danazumi, the National Secretary of the Democratic Peoples Party (DPP), yesterday called on the Federal Government to review the Privatisation Act and its implementation.
Danazumi gave the advice in an interview with the News Agency of Nigeria (NAN).
The Federal Government enacted the Privatisation Act in 1999, which created the National Council on Privatisation with the mandate to commercialise some government corporations.
Danazumi said the implementation of the privatisation policy had rather compounded poverty in the country and stressed the need to implement the policy with a human face.
Meanwhile, a non-governmental organisation, Social Economic Rights and Accountability Project (SERAP), yesterday called for a thorough investigation of all the people named in the ongoing probe of the BPE.
Speaking with NAN in Lagos, Mr. Adetokunbo Mumuni, SERAP Executive Director, described as shocking, revelations before the Senate Ad-hoc Committee on Privatisation probing BPE activities from 1999 to date.
He said: ``A lot of names have been mentioned regarding a series of improprieties that took place in the sale of the companies.
“Our position is that whoever was mentioned should be investigated so that Nigerians will know what really transpired in the privatisation process. Those responsible for these corrupt practices should be brought to justice.”
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