22 Oct 2013

PHCN: Is Privatization indeed the way forward?

By Ezim Osai,
Tuesday, October 22 2013

If I remember my SS3 Economics correctly, privatization means the handing over of the day-to-day running, management and maintenance of public utilities to private individuals. Privatization itself is not an end, but a means to an end; the end being the growth of the sector and the economy.
At the beginning of October, several individuals and/or corporations bought over the Power Holding Company of Nigeria commonly referred to as NEPA. In this article, we will look at some challenges they may face and talk about a solution or two and we will also talk about the consequence of privatization in Nigeria.
A number of people greeted the idea of privatizing NEPA with skepticism since the last notable act of privatization was in Public eyes not much of a success (Privatization of NITEL); the question some of us are asking now is how they hope to change the system after living with it for a lifetime and how they hope to bring about this change.
In my opinion, before any other thing is done all old workers of NEPA should be released (with option of reapplication) and released fast. The lackadaisical attitudes and sheer laziness with which some PHCN officials work is appalling: these are men and women who are paid to work but sometimes come to their workplace only one day in the whole week. Distribution of bills, reading of meters, connection, reconnection and disconnection of power lines and so many other tasks were taken for granted and were only taken seriously if one paid the workers extra money (for their job).
The infrastructure of NEPA is also horribly out-dated; the meters do not work anymore and power piracy is very rampant in some rural areas. My suggestion would be that prepaid meters be installed in every residential house or small consumer of power while the big companies may maintain some sort of agreement with the new company. While installation of meters may be expensive and bothersome for now, it will go a long way in the future by making Nigerians more energy conscious and taking away the excuse of ‘I could not have used that much power therefore, this is not my bill’. Pay-As-You-Use is also very good in the sense that it will enable regulatory and censorship bodies to calculate how much power is generated and how much of the generated power is used; these statistics may be used during budgeting or for various other reasons.
Dissemination of power may also be a problem as the companies will all draw power from existing dams before/if they finish construction on their power outlets. If Corporation A is in charge of Kainji area and Corporation B controls some remote area in Borno state, how do they share the profits and costs incurred by such transmission? Doubtless, most or all of these scenarios have been thought of and covered by experts but of course, the simplest of things elude the greatest of minds.
The only downside of privatization that I foresee may be the widening of the already uneven balance in power across the country. Ideally, most corporations would seek rights to disseminate power in industrial cities and metropolises like Otta, Ibadan, Kaduna, Lagos, Kano, Abuja, Port-Harcourt, Aba, Benin City, Warri and the likes. Smaller cities will also be considered as they consume reasonable amounts of power; however, rural areas and hinterlands will be all but left out since their power consumption is low. Ultimately, all businesses aim at profit and I do not see how supplying power to rural areas can be profitable; hopefully, our government would have put mechanisms in place that ensure that these private individuals and companies do not leave out the hinterlands when disseminating power.  If I were the minister of Power and Energy, I would divide Nigerian cities into three categories: A. Large Power Consumers (Industrial cities and large urban centres) B. Medium Power Consumers (State capitals and commercial centres) C. Low Power Consumers (Small towns and villages). I would pair each Group A City to around five or ten Group C Cities while Group B Cities can be picked singly. If an individual wants to supply say Ibadan power, he would have to supply Ijebu-Ode and its environs as well, but if they want to supply say Awka power, they can supply Awka alone. This way, the government would ensure that every village and town is treated fairly and with the Pay-As-you-Use meters, their power consumption rate would be entirely up to them.
October 1 2013 marked the beginning of a New Era for Nigeria, for good or bad no one can say as of yet. We hope our prayers are finally being answered and that the privatization policy will not backfire and leave a sour taste in our mouths.
We still wait in hope for the Federal Government to resolve its issues with ASUU.

Ezim Osai is a 200L Physics major at the University of Ibadan. A Taoist and a Christian, he loves Cooking, Travelling, Reading, Writing, and loves to absorb nature.

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