Electricity distribution Companies (Discos) have threatened to oppose any plans by the federal government to transfer ownership of power companies to a German multinational conglomerate, Siemens, due to industry-wide inefficiency.
The FG’s faith that Siemens hold the balm to the nation’s power crisis received a boost when Wednesday the Power Minister handed a Memorandum of Understanding to the FEC, signaling the enormous possibility that a deal could be brokered in the next few days.
The massive takeover will hand generation, transmission and distribution fully to Siemens, itself Europe’s largest industrial manufacturing company with a reported global revenue of about €87 billion (over N34.133 trillion) in 2019 alone.
Recall that the Power Minister, Mamman Saleh, in his media address after the Federal Executive Council (FEC) on Thursday, lamented that Nigeria currently generated 13,000 megawatts of electricity out of which it transmitted 7,000MW to Discos.
Owing to crippling technical vulnerabilities, the Discos are only able to supply 3,000MW to consumers.
ALSO READ: Power transmission station on fire
“Government cannot continue subsidising. If they are ready to continue, fine. If not, give chance to those who are ready,” Mr. Saleh said in affirmation of government’s frustration on not getting value for investment.
“So, we cannot continue like that… maybe they should give way to whoever that is ready to come and invest. So, we are asking the government to review and see if they are capable, fine; but if they are not capable, they should give way,” Saleh further stated.
However, reacting to the speculated plans, Discos, represented by the Association of Nigerian Electricity Distributors (ANED), Sunday Oduntan, AENED’s Executive Director for Research and Advocacy, in a counter-argument said “If truly the minister said that, it is very unfortunate for Nigeria. He was wrong and ill-advised. This kind of statement from a minister will not encourage foreign investors to come to Nigeria. We have a legal agreement with the federal government and nobody will close his eyes and allow his $2.4 billion investments taken away. Let us wait and see how he (minister) plans to do it.”
As the comatose sector seeks the breath of life from the Munich-based multinational, it is a puzzle why it took government pretty long to find where the magic wand laid.
From the cusp of the military/democratic rule transition in 1999, Nigeria’s rudderless power sector has resisted efforts to give it direction and life owing to gross incompetence, corruption, mismanagement and mediocrity from government and stakeholders alike.
With a presence in at least 190 countries, the power heavyweight wields an intimidating credential including operations that, aside power generation, span industrial and buildings automation, medical technology, railway vehicle technology, water treatment systems, fire alarms and PLM software.
In terms of strength, size and expertise, the two parties are no match taking into consideration the 11 Discos’ large-scale infrastructural deficit, ineptitude, inclination to crime and poor maintenance culture.