FG Seeking Ways To Resuscitate Ailing Power Sector - BPE
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The Bureau of Public Enterprises (BPE) has said the federal government is looking at several options to revamp the ailing power sector.

This came from the BPE Director-General Alex Okoh during the presentation of certificates to participants in a workshop on anti-bribery and anti-corruption held recently.

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He said the government is considering to dilute the investment of the current core investors in the power firms by bringing in new investors as well as raising tariffs to make the operators recoup the investment in the new equipment.

“It is one of the options (new investors). It is not the only option we are considering; we don’t believe that is the only solution,” he added.

“If you bring in new investors and you don’t correct the market distortions, it will still be the same result.

“The options include setting the right cost or price framework for the market. If a market cannot guarantee price recovery; as an investor, you come into a business and you cannot recover the cost of doing that business, the likelihood is that you will not do the business in the first place.

“So, there is a whole suite, a whole bouquet of interventions and initiatives that we are looking at, including cost-reflective tariffs.

“In the case where that is not possible, we are looking at other compensation strategies that we can put in place for the Discos.”

Okoh added, “We also have to look at the capacity of the Discos to technically manage the franchises.

“We have to look at the capacity of the Discos to invest in the distribution infrastructure – issues around transformers, meters and their revenue collecting assurance programme.

“So, it is a whole bouquet; and if you look at the Power Sector Recovery Programme, it provides a clear roadmap to resetting the entire industry and making sure that the Discos are able to deliver on power.

“For us, it is not necessarily the process of the sale of the Discos that has created those problems in the distribution network.

“It is some of the issues of assumptions that were made to make the market viable. Those assumptions have not been implemented yet.”

He noted “that about 36 percent of the enterprises that have been privatised so far are challenged in one way or the other.

“So, those are the ones we want to concentrate on. We want to understand what the issues are; why they did not meet the objectives of privatisation.”