That N1.2 trillion waste on power sector
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The president was more apt when he said: "While we are targeting 6000 mega watts by 2009, the $10 billion invested in the sector between 2000 and 2007 has not translated into power generation, transmission and distribution, so we are exercising caution to ensure that any further funds to the sector would translate into production and delivery of energy to the ordinary Nigerian."
Despite being the first time the president is openly criticising his predecessor's policies, analysts say they doubt how much of the N1.2 trillion actually went into the sector, why the impact is so insignificant and what the money was actually expended on. Again, one other pertinent question they have raised is, if proper feasibility reports were prepared before the contracts were awarded? Or was it business as usual?
However, lest we forget, perhaps we should quickly place on record, that, the former administration deserves some credit, especially for taking the initiative to invest in the power sector after successive administrations had abandoned the sector for decades.
It will be recalled that no new power stations were built between 1990 and 1999, and no major overhaul of plants was carried out between 1990 and 1999. It will also interest many Nigerians to note that only 19, out of 79 generating units were in operation in 1999. Daily generation fell to less than 2000 megawatts in 1999 and that no transmission lines have been built since 1987. Finally, that Federal government's funding of the sector decreased continually between 1980 and year 2000; all these, in spite of a growing population, competing demands and inept leadership. It was therefore not a surprise that the country experienced three system collapses within 72 hours in 1999. But beyond that, the leadership of president Obasanjo was therefore confronted with the problem of inadequacy, transmission and distribution of energy. The last administration therefore moved to expeditiously implement the electric power sector reforms which culminated in the promulgation of the Power Reform Act, to deregulate the power sector, develop the capacity to transmit and distribute the envisaged higher level of generation. The implication was a complete unbundling of the National Electricity Power Corporation NEPA into 18 other independent bodies.
Unfortunately, we are miffed that basic rules were not followed in the implementation of these projects. First is that proper feasibility studies which would have highlighted the constraints in sourcing gas for the power stations. There were also avoidable lapses in project management as the government's plans were not integrated.
Consequently, over 10 Independent Power Plants: Papalanto, Geregu, Alaoji, Omoku, Gbariam Ubie, Ihovbor, Egbema, Sapelle, Ibom and Calabar are either not completed or are not operational after the huge investments on them.
Thus, we wonder that with all these investments, the president would still regard them as a waste? It is true that some of the funds channelled towards the sector must have been misappropriated by some unscrupulous greedy, shameless and corrupt officials of that administration but we recognise that serious attempts were made to address the decrepit power sector. Generation has increased to 3000 mw from a dismal 1500 mw which the Obasanjo administration inherited in 1999.
Power is a prerequisite to industrial revolution and national wealth. The sad state of the sector has had adverse effect on the level of our national prosperity. How? Industries are folding up consistently due to high cost of business operations. This has induced massive high rate of unemployment in the system. The increase in general price has also been attributed to inadequate power supply. Worst hit are small businesses, especially those that operate from homes. This is why we must not trivialise efforts to resuscitate the sector.
Our expectation is that, rather than criticise the investments in the sector, the President should think fast and come up with alternative funding plans as the nation cannot wait indefinitely, while local industries continue to close shop. Funding of the sector must be sustained, excess crude or from statutory allocations, is immaterial to Nigerians, what is important is that we have electricity period!
Despite being the first time the president is openly criticising his predecessor's policies, analysts say they doubt how much of the N1.2 trillion actually went into the sector, why the impact is so insignificant and what the money was actually expended on. Again, one other pertinent question they have raised is, if proper feasibility reports were prepared before the contracts were awarded? Or was it business as usual?
However, lest we forget, perhaps we should quickly place on record, that, the former administration deserves some credit, especially for taking the initiative to invest in the power sector after successive administrations had abandoned the sector for decades.
It will be recalled that no new power stations were built between 1990 and 1999, and no major overhaul of plants was carried out between 1990 and 1999. It will also interest many Nigerians to note that only 19, out of 79 generating units were in operation in 1999. Daily generation fell to less than 2000 megawatts in 1999 and that no transmission lines have been built since 1987. Finally, that Federal government's funding of the sector decreased continually between 1980 and year 2000; all these, in spite of a growing population, competing demands and inept leadership. It was therefore not a surprise that the country experienced three system collapses within 72 hours in 1999. But beyond that, the leadership of president Obasanjo was therefore confronted with the problem of inadequacy, transmission and distribution of energy. The last administration therefore moved to expeditiously implement the electric power sector reforms which culminated in the promulgation of the Power Reform Act, to deregulate the power sector, develop the capacity to transmit and distribute the envisaged higher level of generation. The implication was a complete unbundling of the National Electricity Power Corporation NEPA into 18 other independent bodies.
Unfortunately, we are miffed that basic rules were not followed in the implementation of these projects. First is that proper feasibility studies which would have highlighted the constraints in sourcing gas for the power stations. There were also avoidable lapses in project management as the government's plans were not integrated.
Consequently, over 10 Independent Power Plants: Papalanto, Geregu, Alaoji, Omoku, Gbariam Ubie, Ihovbor, Egbema, Sapelle, Ibom and Calabar are either not completed or are not operational after the huge investments on them.
Thus, we wonder that with all these investments, the president would still regard them as a waste? It is true that some of the funds channelled towards the sector must have been misappropriated by some unscrupulous greedy, shameless and corrupt officials of that administration but we recognise that serious attempts were made to address the decrepit power sector. Generation has increased to 3000 mw from a dismal 1500 mw which the Obasanjo administration inherited in 1999.
Power is a prerequisite to industrial revolution and national wealth. The sad state of the sector has had adverse effect on the level of our national prosperity. How? Industries are folding up consistently due to high cost of business operations. This has induced massive high rate of unemployment in the system. The increase in general price has also been attributed to inadequate power supply. Worst hit are small businesses, especially those that operate from homes. This is why we must not trivialise efforts to resuscitate the sector.
Our expectation is that, rather than criticise the investments in the sector, the President should think fast and come up with alternative funding plans as the nation cannot wait indefinitely, while local industries continue to close shop. Funding of the sector must be sustained, excess crude or from statutory allocations, is immaterial to Nigerians, what is important is that we have electricity period!
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