Reps: Shortfall of N1trn portends insolvency risk, loss of investors’ confidence to power sector

by | February 15, 2018 5:10 pm

Nigeria’s House of Representatives has expressed grave concern over the state of the country’s power sector, despite the huge investment and reforms initiated by successive administrations.

The lawmakers who called for deliberate action towards averting imminent collapse of the power sector, warned that shortfall of about N1 trillion will put the sector at risk of insolvency and result into loss of investors’ confidence.

The resolution was passed sequel to the adoption of a motion on the ‘Need to investigate the power recovery programme in Nigeria,’ sponsored by Abubakar Ahmed, who expressed concern over the “distress and inefficiency that has bedeviled the power sector in Nigeria despite the privatization of power sector in September 2013.

“The House is concerned that inspite of the huge costs committed to implementing power sector projects throughout the federation, the sector has failed to deliver value as power supply has become erratic while many parts of the nation are without electricity supply.

“The House is cognizant that without government intervention, the cumulative shortfall of about N1 trillion will put the sector at risk of insolvency, leading to loss of investors’ confidence,” he noted.

Ahmed who frowned at the failure of previous administrations to tackle the rot in the sector, observed that the Federal Ministry of Power, Works and Housing in conjunction with the World Bank and other institutions has created a Power Sector Recovery Programme [PSRP] with a view to attaining financial viability for the sector and to rehabilitate the Nigeria electricity supply industry.

During overview of the Power Sector Recovery Programme (PSRP), the lawmakers observer that the proposes solutions to address financial concerns, failed to propose a solution for fixing the critical business, infrastructural and technical flaws resulting in the power sector performance failure and market shortfall being experienced.

“The House further concerned that the Power Sector Recovery Programme (PSRP) does not hold private companies accountable for their proportionate share of accountability.

“The House is aware that the Power Sector Recovery Programme (PSRP) requires the Nigerian Bulk Electricity Trading Plc (NBET) to raise debt for funding the programme being the manager and administrator of the electricity pool in the Nigerian Electricity Supply Industry (NESI).

“The House is worried that the implementation of the PSRP targeted at merely paying liabilities will create a platform for squandering scarce financial resources without effectively eliminating the root causes of power sector problems in Nigeria,” Ahmed said.

To this end, the House mandated the Committee on Power to investigate the Power Sector Recovery Programme with a view to resolving the incongruities in the Draft Power Sector Recovery Programme and report back to the House within four weeks.