Reps Stops BPE From Privatising 5 Power Plants

0 18

Lawmakers in the Federal House of Representatives have asked the Bureau for Public Enterprises (BPE) to halt the privatisation of five power plants located in Calabar, Cross River State, Ihorbor, Edo State, Olorunsogo, Omotosho and Geregu, Kogi State, without due process.

The listed power plants belong to the three tiers of government.
The House took the resolution following a motion of urgent public importance brought by chairman of the House committee on power, Hon. Magaji Aliyu.

In his lead debate, Aliyu observed that the National Council on Privatisation (NCP) and the board of directors of the Power Holding Company (NDPHC) in collaboration with the BPE through a request for expression of interest resolved the sale of five generation power plants.

“The House is aware that the plants were constructed under the National Integrated Power Project (NIPP) with gross installed capacities at 150 conditions -so6mw, 507mw, 634mw, 513mw and 754mw respectively to support the delivery of the core mandate of Power Holding Company of ensuring the stability of ’s power sector.

“The House is further aware that the shareholding of the (NDPHC) is held by the 47 per cent, states and local governments, 53% while the board has the vice as the chairman, six state governors each representing one of the six geopolitical zones and four federal ministers of justice, finance, power and state petroleum.

“The House recalled that in 2013, the same attempt to sell the power generation plants failed on the ground of an apparent need to stop reliance on one grid system, hence the need to set up small hydro generation plants in the various States.

“The House recall further that the attention of board of directors at its 46th meeting on 23rd April, 2022 was drawn to the approval of NCP dated 24th April, 2021 to proceed with the sale of the five NIIP electricity generation plants to fund the budget deficit given the negative impact of the COVID-19 pandemic on the nation’s economy, although the assets under consideration, do not belong exclusively to the federal government, but the three tiers of government.

“The House is worried that the insists to proceed with the sale of these assets despite the fact that the consent of the other shareholder states and local governments, the appropriate legal framework/policy to apply relating to the procurement or disposal of shares or assets by the federal government or its agencies giving the joint shareholding of the state and local governments have not been resolved.

“The House is further worried that the Privatisation Act which expressly lists the enterprises to be privatised did not list NDPHC or any of its subsidiary generation companies on the ground that it is not wholly owned by the federal government, yet, the BPE encourages the to proceed without corresponding approval of all the shareholders to validate the process.

“The House is disturbed that the current timing of the privatisation even if it is approved by the prospective shareholders may not enable the greatest financial value due to current commercial and technical constraints in the industry associated with poor state transmission, distribution capacity, underpayment/liquidity in the market aggravated by global economic recession which will make the assets to be sold at undervalue price and cause avoidable lost to the shareholders.

“The House is informed that the National Economic Council on December 24th, 2019 at its 100th meeting recommended that the sale of NDPHC’s assets be discouraged as DISCOs are dysfunctional while the account of the company has to be properly audited to ensure the best corporate governance practice as a prelude to considering the divestment.

“The House regrets that the interest of the shareholders and national economy will be jeopardised if urgent action is not taken to prevent the BPE from selling the assets under irregular procurement process,” he said.

The House directed BPE to stop the procurement process of selling the 5 NDPHC power generation companies until due process is strictly complied with.

Be the first to know when we publish an update

Leave a Reply