An Executive Director at Nestoil, and top stakeholder in the Nigerian Gas Association (NGA), Dr Chukwueloka Umeh, has revealed why upon the issuance of about 100 licenses to investors in power plant, only one licensee has delivered.
Speaking with media executives at the ongoing Nigeria Oil and Gas (NOG) conference in Abuja, he argued that the inability of licensees to invest is a reflection of poor regulation and disincentive to investors.
According to him, “Many of the licensees are not building power plants due to unfriendly regulation that makes it difficult to recoup investments on plant’s delivery in Nigeria”.
He however, traced the crux of the problem from the way and manner the entire 2013 unbundling of Power Holding Company of Nigeria (PHCN) and the inability of the Federal Government to conduct a true privatization process.
Umeh insisted that all the ongoing quick fixes will not address power sector issues, unless there is a strategic review of prevailing regulatory terms and conditions in a way and manner they will become investor friendly.
The power expert added that “Generating companies need to be able to charge a tariff that allows them to generate power by gas and the government should not be telling private companies this is what they should charge, when competition should be what drives the price and tariff down.
“Let GENCOs compete amongst themselves, likewise DISCOS. Market forces will drive down the prices, just like it happened with the deregulation of the telecoms sector. The government simply needs to create an enabling environment and then step out of the way to let private companies compete for business.
“The government believes that they are helping the masses by fixing prices. In reality, they are not. The government should not be the one telling us how much to sell our power because you know, it would never be a question of capacity anymore,” Nestoil Executive Director averred.
