Ex-NERC Boss, Amadi, Ajaero fault Power Sector Privatisation

The immediate past Chairman of the Nigerian Electricity Regulatory Commission, Dr. Sam Amadi, and the Secretary-General of the National Union of Electricity Employees, Mr. Joe Ajaero, have condemned the privatization of the power sector.
 
While Amadi stated that the government’s failure in the sector could not be cured by privatization, Ajaero noted that the private sector players who bought the power assets had not delivered on the promises they made since they took over the firms unbundled from the defunct Power Holding Company of Nigeria (PHCN) four years ago.
 
Both men spoke in Abuja at a dialogue organized by Nextier Power, an electricity advisory firm headquartered in the Federal Capital Territory.
 
Amadi said, “You cannot cure government failure by privatizing because privatization is built upon some basic framework for the public good. My argument is that there are some certain structural issues that determine whether that proposition will work. The government needs to reform how it does business.
 
“The idea that we can outsource government by allowing the private sector to come in with skills, good finance, information management, etc., has failed. That is why I say that I’m not against privatization as an intervention in cases where it is justified, but I’m against it as an ideology, which is what happened between 2010 and 2013.”
 
He added, “So perhaps, some DisCos would have been sold, while others would not have been sold. I argued that this was the most expensive privatization exercise. We shouldn’t have paid the workers off. We should have allowed them and deal with them in a corporate sense.
 
“But we sold and used the money to pay the workers who are still there. My answer is simple, it was ideological because it was based on the assumption that the private sector works.”
 
On his part, Ajaero stated that the model of privatization adopted by the Federal Government could not be understood by many, as the power distribution companies had failed to even provide meters for electricity consumers.
 
He said, “Somebody said that there is a model for privatization and I have asked, what model did we use in Nigeria? From which country did we borrow the model? In India, you can go to a store and buy your meter, but is that so here? In fact, in every market, even if you want to buy garri, there is a measurement for commodities; you have a cup to measure the garri.
 
“But you have electricity being generated without following it up with a form of measuring instrument. There are no meters, you generate power and people are charged based on estimation, but then, we say we have arrived with respect to privatization.”
 
He added, “Even the DisCos if you give them all the meters, they won’t install them because they want to make profit. People at times use the telecoms sector as an example of where privatization worked. They should stop comparing what happened in the telecoms industry with the privatization of the power sector.”