The House of Representatives has asked the Bureau of Public Enterprise to stop the planned sale of five power plants, warning the Director-General, Alex Okoh, against continuing with the process.
The parliament specifically resolved to “direct the BPE to stop the procurement process of selling the five Niger Delta Power Holding Company power generation companies until due process is strictly complied with.”
The lawmakers also “caution the Director-General of the BPE to desist from any act to facilitate the sales of the five generation power plants until duly authorised by the shareholders in a formal meeting as stipulated by the Companies and Allied Matters Act 2020.”
The Chairman of the House Committee on Power, Aliyu Magaji, had at the plenary on Thursday moved a motion of urgent public importance titled, ‘Urgent Need to Stop the Privatisation of Five Power Plants of Niger Delta Power Holding Company,’ which the lawmakers unanimously adopted.
Magaji noted a report that the National Council on Privatisation and the Board of Directors of the Niger Delta Power Holding Company, in collaboration with the Bureau of Public Enterprises, through a request for expression of interest, resolved to sell five power generating plants of the NDPHC at Calabar (Cross River State), Ihorbor (Edo State), Olorunsogo (Ogun State), Omotosho (Ondo State) and Geregu (Kogi State).
The lawmaker said the plants were constructed under the National Integrated Power Project with gross installed capacities at 506MW, 507MW, 634MW, 513MW and 754MW, respectively, to support the delivery of the core mandate of NDPHC of ensuring the stability of Nigeria’s power sector.
He noted that the shareholding of the NDPHC is held by the Federal Government (47 per cent) and the state and local governments, 53 per cent. He added that the board has the Vice President as the Chairman; six state governors each representing one of the six geopolitical zones; and four ministers – Ministers of Justice, Finance, Power and State Petroleum.
Magaji recalled that in 2013, the same attempt to sell the power generation plants failed “on the ground of an apparent need to stop reliance on one-grid systems, hence the need to set up small hydro generation plants in the various states.”
He said, “The House is worried that the Federal Government insists to proceed with the sale of these assets despite the fact that the consent of the other shareholders – state and local governments – the appropriate legal framework/policy to apply relating to the procurement or disposal of shares or assets by the Federal Government or its agencies giving the joint shareholding of the state and local governments have not been resolved.
“The House is further worried that the Privatisation Act, which expressly lists the enterprises to be privatised, did not list the NDPHC or any of its subsidiary generation companies on the ground that it is not wholly owned by the Federal Government. Yet, the BPE encourages the Federal Government to proceed without corresponding approval of all the shareholders to validate the process,
“The House is disturbed that the current timing of the privatisation, even if it is approved by the prospective shareholders, may not enable the greatest financial value due to current commercial and technical constraints in the industry associated with poor state transmission, distribution capacity, underpayment/liquidity in the market aggravated by global economic recession, which will make the assets to be sold at undervalue price and cause avoidable lost to the shareholders.”
The lawmaker recalled that the National Economic Council, on December 24, 2019, at its 100th meeting recommended that the sale of NDPHC’s assets be discouraged, as the DISCO is dysfunctional while the account of the company has to be properly audited to ensure the best corporate governance practice as a prelude to considering the divestment.
“The House regrets that the interest of the shareholders and national economy will be jeopardised if urgent action is not taken to prevent the BPE from selling the assets under irregular procurement process,” Magaji stated.
