Word leaked last night from the seat of government in Aso
Rock, Abuja, that President Goodluck Jonathan has given his assent to
the controversial bill creating two parallel regulating bodies for the
recently privatised power sector, raising a red flag for investors and
others watching the industry.
This followed an ambitious plan of the permanent secretary
at the ministry of power, Godknows Igali, to break the Transmission
Company of Nigeria (TCN)
into two separate entities, while also creating two parallel regulators
for the power industry, a move that now threatens to take back the
progress of the sector and perhaps one of the president’s legacy
achievements.
Igali, a close confidant of President Goodluck Jonathan,
spearheaded the passage of the controversial bill to establish the
Nigeria’s Electricity Management Services Authority, contrary to provisions of section 32 of the electricity reform act.
That bill was passed, despite the
opposition of the NERC, the BPE and the office of the Vice President,
who chairs the National Council on Privatisation, and last night
BusinessDay learnt that the president’s assent came, despite counsel by
the legal team in Aso Rock that he should with hold assent.
BusinessDay learnt that the permanent
secretary unilaterally split TCN into two new companies without the
approval of the board of TCN and he has already gone ahead to direct the
redeployment of staff of TCN to the new companies.
All firms operating in the electricity sector must be licensed by the regulator, NERC but this requirement has been set aside.
Industry sources say Igali has been on a
campaign to set up two parallel regulatory bodies for the sector, one
NERC and the other controlled by the ministry of power, which has seen
itself lose considerable clout under a privatised electricity market.
The power ministry fought the
establishment of the transition company for a long time and when that
fight failed, it frustrated the hand over of the management of TCN to
the Canadian contractors, which won the bid to run it.
The worry for investors is that once you
have two regulators, a supremacy tussle will ensue, with both fighting
to protect their turf and in the process, decisions would be delayed and
clarity would be lost.
The power sector has been riddled with
intrigue among government officials in the last one year, resulting in
the failure to resolve the crisis over the $500 million Geometric power
plant and the strangulating gas shortage confronting the nation.
A similar move in Ghana has meant that
the minister is constantly engaged in resolving conflicts between the
rival regulators, denying the sector of the much-needed private
investment.
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