Consumer Rights Organization Opposes the Sale of the NIPP/NDPHC Power Plants

Ibekimi Oriamaja Reports

The Bureau of Public Enterprises (BPE) is considering selling five National Integrated Power Projects (NIPP) assets, according to the Nigeria Consumer Protection Network (NCPN), which claims that this could compromise national security.

In a statement released in Abuja, the organization’s president, Kola Olubiyo, highlighted that the planned sale of the facilities operated by the Niger Delta Power Holding Company (NDPHC) reeked of national asset theft at a time when President Muhammadu Buhari’s government is coming to an end.

For the privatization of the five NIPPs, including Geregu, Omotosho, Olorunsogo, Calabar, and Benin-Ihovbor, BPE recently prequalified 16 companies.

However, the NCPN asserted that some of the corporations hardly have any expertise in the field of power generating and that it had reviewed the records of the companies listed as bidders for the NIPP facilities.

The infrastructure supplying electricity supply and national energy security has always been the NIPP of the NDPHC.

For instance, the NIPPs, as public assets, gave Nigeria the much-needed energy security and its accompanying socioeconomic stability during the COVID-19 epidemic when the private Generation Companies (Gencos) dialed down electricity generation due to low income returns.

To prevent a national economic and administrative shutdown, they enhanced power supplies.

The NDPHC Gencos, who have their gas obligations, gas pipeline assets, and contributed to both transmission and distribution networks nationally, have fared no better than the private enterprises in the power industry thus far, the group claimed.

Olubiyo, a member of the Presidential Ad-hoc Committee on Review of Electricity Tariff in Nigeria and the National Technical Investigative Panel on Power System Collapses/System Stability and Reliability, argued that the NIPPS could serve as a safety net if other Gencos ever shut down because of allegedly unpaid debts.

“As this power sector intervention was intended to benefit Nigerians, the BPE and any other authorized government body should be considering how to best utilize the NIPP/NDPHC Gencos at this time.

“The Nigerian Electricity Regulatory Commission (NERC) would have examined the NDPHC-implemented NIPP interventions, which span the power sector value chain, and determined their true worth.

The company continued, “However, for more than nine years, NERC has been endlessly doing examination of these investment values without consequence.

NDPHC asserted that it has consistently been shortchanged of revolving funds that should be reinvested into other power interventions due to the lack of this review to identify the Capital Expenditure (CAPEX) in the NIPP power sector intervention projects.

“For the time being, the NCPN is opposed to any plans to sell off five of the NIPP Gencos. We are not implying that the plants won’t be sold in the future at the proper times and pricing.

“But not now, when Nigeria is facing significant difficulties related to the Transmission Company of Nigeria’s purposeful low energy dispatch and the Distribution Companies’ (Discos’) deliberate load rejection” (TCN)

Election season has already begun, and the NCPN asserted that even if the five NIPP facilities were sold, the revenues might end up in the hands of political allies.

It said that selling the five NIPP facilities might not ensure their best performance because the new investors would have to start again by entering into new Power Purchase Agreements (PPAs) and Vesting Contracts with the Nigerian Bulk Electricity Trading PLC (NBET).

However, it argued that the NDPHC now has some already-signed bilateral contracts for a “Take or Pay” deal for a supply of gas to some of the Gencos, which may be useful.

“We advise the government to work with specialists, professionals, and like-minded individuals from the electricity sector and beyond to develop a comprehensive framework to address the slowdown in growth.

The organization encouraged the Special Investigative Committee to look into the core and basic issues as the House of Representatives convenes this week to dig deeper into the issues at stake.

The organization stated that the Nigerian government should take note of the poor execution of the 2013 electricity sector privatization exercise, which was also carried out by the same BPE.