Ayobami Adekunle writes that the NDPHC has outlived its usefulness
The federal government incorporated the Niger Delta Power Holding Company Limited (NDPHC) as a limited liability company owned by the three tiers of government -FGN, states, and local government areas to serve as the legal vehicle to intervene in the power sector through direct provision of infrastructural facilities to bring immediate remedy to the power supply gap in the country. This included the establishment of generation facilities in order to reduce the power deficit as well as the provision of evacuation and distribution facilities to aid the process of stabilising the power supply value chain.
This provision was arrived at by the government on the basis that there was a huge power sector investment gap over the years and since government had decided to reform the sector by allowing the private sector to bring in its resources as well as technology and managerial expertise, an intervention vehicle that could quickly solve the problem was conceptualised and incorporated.
Thus, NDPHC was supposed to provide the facilities, bring value for the facilities and re-invest into the power system: a purely projects identification, design, execution and deployment mechanism that was not expected to run the facilities. It was envisaged that the company would subsequently ensure the even development of all regions of the nation through these focused and purpose-driven interventions.
In that regard, the National Integrated Power Project (NIPP) was conceived as a fast-track government funded interventionist mechanism or initiative to ginger new form of growth as well as stabilize Nigeria’s electricity supply system on an ad-hoc basis with a sunset period in view.
In carrying out its mandate, the NDPHC has invested in generation, transmission, distribution and gas assets as follows: Generation Plants: NDPHC had invested about USD 4.5 billion in the construction of 10 gas-fired power plants which are sited close to the fuel sources in the Niger Delta region and are of varying capacities. These plants are at various levels of completion since inception (about 16 years ago).
The mandate of the NDPHC is largely about improving power access and quality delivery to customers and the ability to actually bring about these solutions depends on NDPHC’s ability to have more resources on a continuous basis, through recovery (by divestiture) of their investments and re-invest. NDPHC’s response is supposed to be based on Load Forecast (prediction of electric power needed to balance demand in the short, medium and long terms) by the system operator.
However, it is pertinent to note that since the federal government decided to sink over US$12billion at the commencement of the programme as well as other subsequent injections by the government, there have been issues arising from the way and manner the monies were invested or accounted for. For instance, the seventh and eighth National Assembly had constituted panels to investigate the use of these resources without much to show for it.
In addition to these investments, the National Bulk Power purchaser (NBET) has been paying NDPHC for power generated from the poorly maintained generation facilities without any form of accountability for the money so realised.
It is pertinent to note that the various interventions by NDPHC have not been transparent even as they are not yielding the desired results largely because the company has forgotten to focus on its core mandate but was busy deploying its energy and resources to replace the defunct Power Holding Company by becoming an integrated power company involved in power generation, transmission and distribution.
But the problems in the power sector have persisted, compelling the government to look at a more enduring solution to the problems. This informed the need for various interventions by the government in order to address these challenges. And they are being addressed comprehensively by the federal government through various programmes like the comprehensive Presidential Power Initiative (PPI) meant to address all the bottlenecks in the power sector, the World Bank Distribution Intervention Programme (DISREP), the Ministry of Finance and Central Bank’s interventions, all aimed at addressing the sector’s investment deficits, payments management as well as the bottlenecks between the distribution companies (DISCOs) and the Transmission Company of Nigeria (TCN).
It is part of this effort that the federal government through the National Council on Privatisation (NCP) had directed its secretariat- the Bureau of Public Enterprises (BPE) to get to work and privatise; especially the generation assets. The Bureau should therefore be supported to execute this mandate and not the unnecessary draw back from members of the public and other agencies of government.
It is disheartening to note that since its inception, the NDPHC (despite the huge resources pumped into it by the federal government), its finances have not been audited to ascertain how the resources have been deployed or to provide clear information on what has happened to the funds 16 years down the line. Given also that the issue of failed contracts and poorly executed works abound all over the place, shouldn’t the government beam its search light on the resources’ guzzling institution that could easily mar the reputation of the government when the facts are eventually revealed? Indeed it is trite to ask that in the light of current developments in the power sector and the huge interventions through bilateral and multilateral institutions, is NDPHC still relevant or put differently, has it not outlived its welcome?
Since the vision has been lost and Nigeria cannot overcome the perennial problem of power shortage with more interventions in the value chain by the NDPHC; and considering the funding constraints of the three tiers of government now and that the results of the huge investment are abysmal, shouldn’t the shareholders resort to the best course of action; which would be for the tiers of government to divest their interest in the NIPPs and utilize the proceeds to fund other developmental projects?