
The upper chamber of the National Assembly on Monday berated the federal government over N14 billion month agreement signed with power generation companies.
The Senate also regretted the $29 billion annual loss to failed Share Purchase Agreement In power sector.
These were revealed on Monday at an investigative hearing on the power sector recovery plan, in Abuja.
Recall that in 2013, the Power Holding Company of Nigeria was unbundled to pave way for the emergence of six Generating Companies (GENCOs), 11 Distribution Companies (DISCOs), and one Transmission Company of Nigeria. Both the GENCOS and DISCOs are fully privatised outfits.
Expressing the concern of the Senate at the investigative hearing, the President of the Senate, Ahmad Lawan condemned the signing of a pact which he believed had dragged Nigeria into deeper financial crisis without meaningful outcome.
Lawan in a remark at the hearing, called for serious investigation into all aspects of the Share Purchase Agreement.
Expressing concern over the agreement, the President of the Senate said, “how did they (Federal Government) sign the agreement. Were they under duress to make us lose this kind of huge amount of money? When we know that we are not prepared to take the required generation, we shouldn’t have signed it since we didn’t have the capacity. Now we are made to cough out N14b monthly. For what?

“This is waste, why should we sign this kind of document? In, fact, the World Bank has guaranteed some of this agreement even though they warned us not to sign. We want World Bank to come to our aid, how can we now review this? that is my concern.
“How can we be paying N15 billion to them (GENCOS and DISCOS) every month and the CBN would be running from pillar to post to raise the money for work not done and yet there are problems we face every day because we are not able to give our security agencies the kind of weaponry that they need, no manpower, 14m children out of school and then some people are busy collecting this amount of money.
“Something has to give, honestly, we are responsible leaders of this country today we can’t continue with this, and who ever signed this why did they sign it? We shouldn’t have signed. I think the time has come to do the right thing. We have to find a way I know there would be legal implications. I may have sounded harsh.
“This sector is so critical and yet it is the sector that receives the least kind of scrutiny”.
“We know we will not use more than one turbine and yet we signed and paid 80% every month.”
Calling for serious probe into the whole development, Lawan charged the Senate Committee on power to investigate all issues and terms of the Power Purchase Agreement, adding that the overall expectation of government and citizens of the Federal Republic of Nigeria in the power sector after privatization should be far better.
He said: “I am not sure if we have achieved that, probably worse than they met it. When you have privatization you have a share purchase agreement. This investigation should look into what has happened.”
The President of the Senate declared that questions should be asked about the responsibilities and obligations of the federal government in the Share Purchase Agreement.
Still expressing concern, Lawan asked “what is BPE supposed to do? Equally very important is what are the seven investors who were given the eleven DISCOS and six GENCOS supposed to do within which time limit?

“Government should not be giving free money. N1.7trillion has been given to DISCOS may be in their books the actual money must have gone to the GENCOS. N1.8trillion is a huge amount of money.
“Is it part of the Share Purchase Agreement that we should be giving this kind of money? What are we supposed to do really as a government what is our obligation?
“The central sector such as our educational system needs attention, the health sector has been exposed with the coming of the COVID-19 pandemic, no health facilities probably the N1.8 tr would have turned round these sectors in a very magnificent manner.”
In her key note address at a one day roundtable discussion organised by the Senate last December, the Country Representative of Energy Market and Rate Consultants, Mrs Rahila Thomas, had said for survival alone, the federal government needed to urgently inject N1.23trillion into the power sector.
She had said: “Issues bedevilling the power industry in Nigeria started with fatal flaws inherent in the 2013 privatisation anchored on wrong assumptions inhibiting investors from taking care of their losses let alone , delivering on the required electricity supply in the country.
“The fatal flaws or wrong assumptions upon which the privatisation was carried out in 2013 has to do with generation capacity government put at 6,500 megawatts but later turned out to be 3,453megawatts. Other assumptions are in the loss for every Naira of kilowatts put at 21kobo but later turned out to be 52kobo loss per every Naira of kilowatts with attendant unanticipated losses totalling far above a trillion Naira now,” she said.
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