|Sen Enyinnaya Abaribe
The Senate Committee on Power has expressed concern over the liquidity crunch in the power sector. It also expressed doubt over the financial and technical competence of the private investors in the sector.
Sen Enyinnaya Abaribe, the Chairman of the committee, expressed the concern in a statement by Dr Usman Arabi, the Head of Public Affairs Department, Nigeria Electricity Regulatory Commission (NERC).
The statement said that the committee members, who were on oversight visit to the commission, queried the reduction in cash collection, which they claimed was N15billion before privatisation, but had now reduced to about N5billion.
The statement further said the committee members were unhappy at the inability of the Distribution Companies (DISCOs) to meter customers and their use of the estimated billing system.
Abaribe was quoted as saying, “Are you sure the privatisation of the power sector is producing the needed result with the under-performance by the new investors.”
The senator assured NERC of the committee’s readiness to empower the commission to enable it to perform its regulatory functions effectively.
The statement also quoted Dr Anthony Akah, the acting Chairman of NERC, as saying that the commission is doing all it could to ensure that the operators in the power sector value chain played by the rules.
It stated that the strict applications of rules and regulations will help remove obstacles working against the optimal performance of licensed operators in the power sector.
Akah said sanctions had been issued out to erring operators in nine different instances in the last four months.
The acting chairman said the gesture is an indication of the change in regulatory tactics, even though some of the sanctions were being appealed.
He said, “The operators are hiding behind judicial proceedings to prevent posting of letter of credit and possibility of escrowing their account,” the statement quoted him as saying.
According to the statement, this is frustrating strict compliance with contractual obligations and causing liquidity problems in the sector.
Akah also assured that some of the DISCOs that initiated the court proceedings were beginning to see the futility of their exercise and might soon withdraw the suits they instituted.
He said the commission, through its regulatory initiative facilitated the increased of 40 megawatts by Paras Energy.
He said Nigerians should begin to treat electricity as a product with its own cost of production.