By Nsikak Evans
OrderPaperToday – The Bureau of Public Enterprises (BPE) has blamed the failure of power generation and distribution companies (GENCOs and DISCOs) to meet targets given them as part of the terms of their sales on the federal government.
Director General Bureau of the BPE, Mr. Benjamin Dikki said this Wednesday at an interactive session called by the Senate Committee on Privatization led by its chairman, Sen. Ben Murray Bruce.
Mr. Dikki defended the lapses in the operations of the Discos and Gencos saying they only get between 70 and 80 per cent of what they generate and hence find it difficult to recoup their investments.
Asked by the chairman if that was the reason for the power plants’ inefficiency, Dikki disagreed and blamed it on the failure of the government to keep to the terms of agreement it reached with power firms.
He listed such agreements to include government’s pledge to provide subsidy of N50 billion annually for two years to the investors, a situation he said had made it impossible for them to accrue revenues.
According to Dikki, the development had made it difficult to hold the power firms accountable for their inability to meet the set targets. “If you tell them they are not meeting targets, they also will say these are the reasons,” Dikki said.
He also said the investors have been clamouring for cost reflective tariffs which they could present to their financiers to enable them secure money to fund their projects.
He also said they sought to present the tariffs to their bankers to secure cash flow that they can invest in social infrastructure.
Earlier in his opening remark, Sen. Bruce said the programme of privatization is largely underwritten by the Public Enterprises Act 1999 which established the BPE to operate as the secretariat of the National Council on Privatization.
Senator Bruce said the mandate of the committee is to look at the privatized entities, their operations and current state of affairs as it affects their financial and corporate status.
He said the committee would look at companies to see if they are delivering the goods in terms of efficiency, productivity, profitability, poverty reduction and all the supposed benefits that feature prominently in privatization advocacy, including corporate governance.