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Discos gear for battle as speculations mount over govt plans to hand-over power sector to Siemens

SIEMENS TO TAKE OVER NIGERIA’S POWER SECTOR: Despite FG’s denials Discos gear for battle

On account of the perennial industry-wide inefficiency on which the nation’s power sector has run since the Fourth Republic birthed, the Federal Government may be  earnestly contemplating the possibility of wrenching the ownership of power distribution companies (Discos) and delivering it to Siemens, a German multinational conglomerate.

The massive takeover will hand generation, transmission and distribution fully to Siemens, itself Europe’s largest industrial manufacturing company with a reported global revenue of about €87 billion (over N34.133 trillion) in 2019 alone.

Power Minister, Mamman Saleh, in his media address after the Federal Executive Council (FEC) on Thursday, lamented that Nigeria currently generated 13,000 megawatts of electricity out of which it transmitted 7,000MW to Discos.

Owing to crippling technical vulnerabilities, the Discos are only able to supply 3,000MW to consumers.

Moreover, the Discos’ have a bad name for unaccountability, which often compels them to short-change the Nigerian Bulk Electricity Companies (NBET), whom it buys electricity from by paying for only 1,000MW when it receives 3,000MW from the firm.

“Government cannot continue subsidising. If they are ready to continue, fine. If not, give chance to those who are ready,” Mr Saleh said in affirmation of government’s frustration on not getting value for investment.

“So, we cannot continue like that… maybe they should give way to whoever that is ready to come and invest. So, we are asking the government to review and see if they are capable, fine; but if they are not capable, they should give way,” Saleh further stated.

On their part, the Discos, represented by the Association of Nigerian Electricity Distributors (ANED) threatened to oppose the ownership transfer process to Siemens.

Sunday Oduntan, AENED’s Executive Director for Research and Advocacy, in a counter-argument said “If truly the minister said that, it is very unfortunate for Nigeria. He was wrong and ill-advised. This kind of statement from a minister will not encourage foreign investors to come to Nigeria. We have a legal agreement with the federal government and nobody will close his eyes and allow his $2.4 billion investments taken away. Let us wait and see how he (minister) plans to do it.”

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Well over six months ago, the Bureau of Public Enterprises (BPE) had confirmed its new Electricity Roadmap, a sweeping policy shift by which government aimed to achieve 11,000MW by 2025, would launch last December.

That day in August 2019, the BPE brought the stakeholders in the power industry – the Discos, Transmission Company of Nigeria (TCN) and Nigerian Electricity Regulatory Commission (NERC) – and Siemens to inform them of the modalities of the acquisition in a bid protect the peculiarities of interest of each party.

The FG’s faith that Siemens hold the balm to the nation’s power crisis received a boost when Wednesday the Power Minister handed a Memorandum of Understanding to the FEC, signalling the enormous possibility that a deal could be brokered in the next few days.

As the comatose sector seeks the breath of life from the Munich-based multinational, it is a puzzle why it took government pretty long to find where the magic wand laid.

From the cusp of the military/democratic rule transition in 1999, Nigeria’s rudderless power sector has resisted efforts to give it direction and life owing to gross incompetence, corruption, mismanagement and mediocrity from government and stakeholders alike.

Record has it that the Obasanjo administration squandered an outrageous $16 billion on the sector and the legacy of that feat is the shoddy electricity services Nigerians are battling today.

That sobering sum translates N5.816 trillion if converted. And that obviously is a low estimate considering that the fund has not been adjusted for inflation to reflect real contemporary value.

Distribution is the runt of the litter of all the segments in the power value chain, making the Discos’ grounds for resisting the Siemens takeover a feeble one.

The Discos have run a deftly orchestrated scheme that has milked millions of electricity users dry through estimated billing.

The stratagem equally incorporates making the metering process pretty difficult by offering them to consumers at a humongous sum.  A single-phase meter sold for as much as N75,000 last October.

In displeasure with the Discos’ relentless exploitation, a number of Nigerians have resisted Discos technicians, who executed this organised crime, by attacking them during disconnection missions.

It stands to reason to contrive new power reforms that will give the likes of Siemens the chance to overhaul the Nigerian power sector holistically.

With a presence in at least 190 countries, the power heavyweight wields an intimidating credential including operations that, aside power generation, span industrial and buildings automation, medical technology, railway vehicle technology, water treatment systems, fire alarms and PLM software.

In terms of strength, size and expertise, the two parties are no match taking into consideration the 11 Discos’ large-scale infrastructural deficit, ineptitude, inclination to crime and poor maintenance culture.

Ripples Nigeria

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Ripples Nigeria

We are an online newspaper, very passionate about Nigerian politics, business and their leaders. We dig deeper, without borders and without fears.

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