Electricity Tariff to Increase - BPE DG

Even as Nigerians are still groaning under the recent increase in electricity tariff, Acting Director General of the Bureau of Public Enterprises (BPE), Mr Benjamin Ezra Dikki, yesterday, gave the indication of more increases in their monthly bills.

This is just as the Managing Director of CMEC, one of the preferred bidders in the privatisation exercise of unbundled Power Holding Company of Nigeria (PHCN) successor companies, Mrs Heather Onoh, said it would take the company six months to rehabilitate parts of the Sapele power plant.

Speaking at the signing of Transaction and Industry Agreements for the Power Holding Company of Nigeria (PHCN) successor companies in Abuja, Dikki admonished all Nigerians to be willing to accept increased electricity tariff as the privatisation exercise in the power sector is nearing completion.

But he assured that the increase in the electricity tariff would only be in the short run as the tariffs are bound to fall in the long run as a result of massive investment in the sector.

He recalled the dramatic crash in the prices of SIM cards in the telecommunications sector as a result of competition and investments in the industry, adding that the same thing would happen to the power sector as the gradual removal of subsidy in the sector would in no way match the prices electricity consumers in the country pay to fuel their generators.

The Acting BPE DG described the signing ceremony as the beginning of a voyage, stressing that there is still the need for route charting, navigation and steering in the right direction.

As the final handover date of the successor companies to the preferred bidders is near, Dikki said there were transitional issues that would arise between the payment of 25 per cent and the handover of the companies to the core investors.

He said the rules of engagement between the preferred bidders, the staff and management of the successor companies needed to be carefully defined and handled while arrangement that would allow the preferred bidders to monitor activities in the successor companies needed to be put in place also.

The Chairman, Technical Committee of National Council on Privatisation (NCP), Mr Atedo Peterside, who was represented by the Vice Chairman of the council, Alhaji Haruna Sambo, told the core investors that within 15 business days after signing the sale and purchase agreement or the shareholders agreement, the bidders shall make a down payment of 25 per cent of the purchase price and pay the balance of 75 per cent of the purchase price after 90 days of signing the agreement.

He said that the final handing over would be done after the payment of the full purchase consideration.

Meanwhile, following the full privatisation of the PHCN, the Federal Government and the successful bidders for 10 generating companies (GENCOs) and five distribution companies (DISCOs), on Thursday, signed sale and purchase agreements on their handover.

Speaking at the occasion, Vice-President Namadi Sambo described the event as "important landmark", saying it marked important milestones in the ongoing reform of the Nigeria electricity supply industry.

The vice-president, who was represented by the Minister of Power, Professor Chinedu Nebo, thanked the World Bank for "its support towards making these agreements bankable, through the provision of Partial Risk Guarantee credit support instrument."


Source: Everywhere Nigeria