Friday, November 26, 2010

Nigeria needs N520bn annually to improve power generation – FG


Prof. Barth Nnaji


The Special Adviser to the President on Power, Prof. Barth Nnaji, has said that increasing Nigeria’s power generation capacity from now till 2013 will cost about N520bn every year.

Speaking in Abuja on Thursday during the Nigeria Energy and Power Summit, he said that only 40 per cent of the nation’s population had access to electricity supply, while about 80 per cent of the N8bn budget for the Power Holding Company of Nigeria was being spent on staff salaries and welfare.

Nnaji disclosed this just as the Minister of State for Power, Mr. Nuhu Wya, declared that providing access to affordable and reliable electricity by all citizens was a critical goal of the Federal Government.

He said, “Increasing generation from 4,200 megawatts to 13,000MW by 2013 requires capital investments worth N520bn every year. Increasing transmission and distribution capacity from 5,800MW to 9,000MW by 2013 requires capital investments worth N200bn every year. Even this will not meet generation requirements.”

He said that the distribution and transmission networks had to grow at the rate of at least 16 per cent, year-on- year, to handle an equivalent of 9,000MW by 2013, adding that the current average growth rate per annum was less than one per cent due to limited investments.

On the noticeable defects in the system before the reform, he said that available investments in the sector were ploughed into replacement of damaged equipment such as transformers, switchgear and others, instead of new constructions for expansion and upgrades.

He also identified as parts of the problem, vertically integrated government-owned monopoly that was not commercially viable, significant managerial inefficiencies and leakages; inefficient investment in generation, distribution and transmission, continued increase in load demand versus virtual static generation level; and high suppressed demand throughout Nigeria.

Speaking on the efforts of the Federal Government to ensure reliable power supply in the nearest future, Nnaji said the new Power Sector Roadmap officially inaugurated by President Goodluck Jonathan in August, outlined government’s plan to accelerate the pace of reforms and improve on short-term service delivery.

According to him, the Presidential Action Committee on Power was created to remove red-tape, achieve policy consistency and cut-through bureaucracy in decision making by key stakeholders in power, while the Presidential Task Force on Power was created for the day-to-day development of the reform plan for the power sector.

He also restated plans by NELMCO to take over the stranded assets and liabilities of PHCN by the first quarter of 2011, adding that N57bn had been paid as monetised benefit arrears of PHCN workers. He said $900m was being appropriated to pay severance allowances upon privatisation.

Meanwhile, the Federal Government has pledged that it has no plans to retrench workers when its new reform in the power sector takes off.

Wya, gave the assurance in Abuja on Thursday at a news conference on the activities of the ministry.

He said workers in the sector had nothing to fear as the current workforce was nowhere near the number of personnel required after the reform.

He said government was committed to ensuring that no competent and dedicated worker in the sector was retrenched as a result of privatisation.

Source:http://www.punchng.com

 


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