The Electric Power Sector Reform Act 2005 that led to the unbundling of the vertically integrated National Electric Power Authority (NEPA) and subsequent privatization of the generation and distribution units, was to address the epileptic performance of Electric sector in the country. This reform also established Nigeria Electric Regulatory Commission (NERC) to regulate the operations of the privatized entities.
Two years after the privatization, the country is still battling with same power supply problem. This calls for serious concern on why the situation has not changed even after privatization. Many are quick to question the integrity of the private operators and blame the Distribution Companies for not improving power supply, some blame the generation companies while othersblame it on the transmission which is still a government owned entity.
Before one can go deep into the problem, a brief overview of the privatization will give a useful insight to where the country is now in addressing the power supply issue.
First the unbundling of the sector and subsequent privatization as provided in the EPSR Act 2005 was to improve performance and ensure transparency in the activities of the unbundled entities, the generation, transmission and distribution, and to attract participation of the private sector in the provision of power in the country.
The unbundled entities, comprising of 6 generation companies, and 11 distribution companies were privatized while Federal Government retained the Transmission Company as State owned. Government also retained 40% interest in the Distribution Company, while the private sector is holding60%. Also in the privatization of generation companies government retained 20%, leaving 80% to the private sector.
This shareholding structure shows that the private sector is not the sole owners of the power sector as the public assumed. This shareholding structure imposed limitations on the operators of the sector. This is because the private operators …Read More
Source:: PM Newspaper
