The Bureau of Public Enterprises (BPE) yesterday disclosed details of the core investor sale method approved for privatising the 11 distribution companies (DISCOS) unbundled from the Power Holding Company of Nigeria (PHCN.)
In addition, the strategy would be built around the Multi-Year Tariff Order (MYTO), with MYTO stipulating the annual investment requirement, allowable operational expenditure, approved rate of return on equity and other allowable expenses for each distribution company.
Onagoruwa noted that merits of the proposed strategy include emphasizing technical, financial and managerial competence of operators; that loss reduction and investments remain the main parameters for assessing potential bidders; and has the shortest curve for reducing subsidies, guarantees and section payment delinquency.
The DG said the current state of the PHCN was disappointing being characterised by high technical and non-technical losses estimated at 45-50 per cent; low generation, distribution and transmission capacity; and large number of employees at over 50,000 in the industry.
She also mentioned other worrisome issues as that of poor maintenance culture; frequent power outages; lack of commercial orientation; and absence of audited financial statements with the organisation.
Onagoruwa, however said the power sector privatisation would address all these challenges, noting that key objectives of the privatisation include improved efficiency by increasing collections, reducing losses and reducing cost.
She said the exercise would also enhance improved access to electricity; investment from the private sector to improve infrastructure; ensuring fair tariffs to all end users; and increase in commercial viability of the power sector.