Why Buhari Must Reverse Sale Of PHCN By @ileowokikiowo

Elumelu's Transcorp purchased PHCN assets

by Ileowo Kikiowo,

As I write this article, Nigeria is in a ‘shut down’ mode. It is a step short of Armageddon. The princes of hell have descended on us and they are having a good time. Nearly everything has grinded to a halt.

The Federal Government is practically nonexistent. Remaining Federal Government appointees who haven’t gone on a self-imposed exile are having a ‘good’ day looting the economy; there is no time for governance. Equipment, motor vehicles and government properties are mutating – growing wings and flying to destinations unknown.

Worse still, petroleum products like PMS, AGO, ATK, GAS etc are unavailable. In fact, it is easier to get gold stones on the ground than buy fuel. Transportation from Lagos to Ibadan is harder than Lagos to New York, little wonder unemployed Nigerians are trekking all over the country to felicitate with their political mentors.

Pardon the ranting, let go back to the subject matter. For those who live outside the country, understand that much of Nigeria’s territorial part is in complete darkness, thanks to the clueless, rudderless and hip hazard government of a happenstance president called Goodluck Jonathan.

I will explain the Power Holding Company of Nigeria (PHCN) privatization under Jonathan with a simple analogy, thus sparing you all the technical jargons and grammar.

Transcorp Tony Elumelu in newly acquired private jet
Transcorp Tony Elumelu in newly acquired private jet

Imagine your father built a mansion with a huge part of his life’s saving. He buys a land, and then painstakingly begins to build for several years. Years gone past, the house is not yet ready and not big enough for your family of 20, but you start living in it anyway. Since the house is originally built for 7, you need to build more and expand right?

However, instead of your father sourcing for funds to maintain and complete the building and them build more, he sells the house. With no place to live, the entire family continues to live in the house; difference is the family now pays rent to the new owner.

Sadly, the proceeds from the sales is not enough to cover the cost of buying the land or building nor the interior decoration, however, he goes ahead with it. With no profit, the proceeds from the sales is used to lay off workers ie pay gratuity and severance package of the gardener, house help and nanny.

After these sales, a new problem emerges; the new owner cannot really maintain the house. So the owner recalls the same garner, house help and nanny you paid severance package to come continue with their work since they know the in and out of the house.

Months after the transaction, it was discovered the new owner can’t keep up with the maintenance. So the head of the home aside from paying rents begins to give the new owner a huge sum called Intervention Fund so they can sink a borehole and carry out other sundry projects around the house.

Interestingly, the fund is not enough to maintain the house.

Fellow Nigerians, this is the situation we find ourselves today. The head of the home is the Federal Government. The children are Nigerians, the gardeners, house help and nanny are the sacked PHCN staff. The new owners are the GENCOs and DISCOs.

This analogy aptly describes the power sector. We sold our national heritage to a gang of inadequate poster boys, a process that has siphoned more money from the federal coffers and given us less electricity.

Nigeria is worse from that transaction. I am using a 10 litre fuel bought at the rate of N500 PER LITRE. Should I tell you half of it is water? Well, that is a story for another day.

We are paying more for less electricity thanks to those in charge of the privatization process.

Understand that Mr Atedo Peterside, chairman Technical Committee of NCP, shouted to the high heavens when companies which failed woefully in the Net Present Value, NPV, and threshold assessment of the Technical Committee were corruptly handed power assets.

Today, we are generating as a country, a little below 1200MW – not enough to power Heathrow Airport. The figure represents the lowest electricity production output in a decade.

Despite the fact that the fraudulent winner companies are unable to meet the original intendment of privatisation; which is the revamping of our electricity substructure, they continue the arbitrary increase in tariff out of the range approved by the Multi Year Tariff Order of Nigerian Electricity Regulatory Commission, NERC.

The model as presently operated is not sustainable. Providing electricity of not, each DISCO makes a minimum guaranteed N1bn monthly in fixed charge.

The popular maxim in developed capitalist economy is that government has no business in Business, but it doesn’t hold true here.

Buhari’s government needs to intervene in this critical sector of the economy. We can’t allow this business men to continue running a critical national infrastructure as power. Aside the fact that these guys can hold us to ransom as seen in the case of the oil marketers, the primary aim of GENCOs and DISCOs is to make money, not generate and distribute electricity respectively.

If the system as presently constituted guarantees them profit in the name of fixed charge, with or without generating and distributing electricity, then they wouldn’t even bother trying to produce some.

The government of Buhari needs to invoke the doctrine of necessity in the power sector. He needs to compulsorily take back this critical infrastructure from the hands of these inexperienced buyers.

Failure to do this and/or give us stable electricity by 2019, Nigerians may treat General Buhari the same way they treated Goodluck Jonathan at the next general election.

You can reach the writer via [email protected]