The House of Representatives yesterday ordered the suspension of the planned sale of five power plants by the National Council on Privatisation (NCP), the Board of Directors, Niger Delta Power Holding Company (NDPHC), and the Bureau of Public Enterprises (BPE).
The power plants are located in Calabar, Cross River State, Ihorbor, Edo State, Olorunsogo, Omotosho and Geregu, Kogi State.
The resolution was passed sequel to the adoption of a motion of urgent public importance sponsored by the Chairman of the House Committee on Power, Magaji Aliyu.
In his submission, Aliyu alleged that the NCP, the NDPHC Board called for expression of interest for the sale of the five generation power plants, which belong to the three tiers of government without following due process.
He said: “The House is aware that the plants were constructed under the National Integrated Power Project (NIPP) with gross installed capacities at 150 conditions -SO6MW, 507MW, 634MW, 513MW and 754MW respectively to support the delivery of the core mandate of Niger Delta Power Holding Company of ensuring the stability of Nigeria’s Power Sector.
“The House is further aware that the shareholding of the (NDPHC) is held by the Federal Government 47%, States and Local Governments, 53%, while the Board has Vice President as the Chairman, six state governors each representing one of the six geopolitical zones, and four Federal Ministers of Justice, Finance, Power and State Petroleum.
“The House recall 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 system, hence the need to set up small hydro generation plants in the various states.
“The House recall further that the attention of the Board of Directors at its 46th meeting on 23rd April, 2022, was drawn to the approval of the NCP dated 24th April, 2021 to proceed with the sale of the five NIIP electricity generation plants. This is to fund the Federal Government budget deficit given the negative impact of the COVID-19 pandemic on the nation’s economy, although the assets under consideration do not belong exclusively to the Federal Government, but the three tiers of government.
“The House is worried that the Federal Government insists on proceeding with the sale of these assets without the consent of the other shareholder states 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 given the joint shareholding of the state and local governments has not been resolved.
“The House is further worried that the Privatisation Act, which expressly lists the enterprises to be privatised did not list 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. This is due to current commercial and technical constraints in the industry associated with poor state of transmission, distribution capacities, and underpayment/liquidity in the market aggravated by global economic recession, which will make the assets to be sold at undervalued price and cause avoidable losses to the shareholders.
“The House is informed that the National Economic Council on December 24th, 2019, at its 100th meeting recommended that the sale of NDPHC’s assets be discouraged as DISCOs are 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,” he noted.
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.
Due process
To this end, the House directed BPE to stop the procurement process for the sale of the five NDPHC power generation companies until due process is strictly complied with.
The lawmakers also cautioned the BPE Director General 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.
In a related development, Chairman, House Committee on Finance, James Abiodun Faleke, had warned the BPE and other agencies of government involved in the planned sale to halt the process as it will be injurious to the Nigerian economy.
Faleke, in the separate letters dated 18th July, 2022, sent to the Minister of Finance; Minister of Power; Director-General, BPE; Managing Director, NDPHC; and the Managing Director, Nigeria Bulk Electricity Trading Company (NBETC), argued that the planned sale is being carried out without “due regard to constitutional principles and economic policy that informed the establishment of those power plants.
“The committee decried the proposed sale as uneconomical and a disservice to all known principles of national development and the sharing equity among the three tiers of government.”
