The Federal Government plans to sell 51 per cent of its stakes in the 17 out of the 18 successor companies of Power Holding Company of Nigeria.

Eleven of the companies are into distribution and they will be sold in 2011. Six are in the generation business.

According to the roadmap to power sector unveiled on Thursday by President Goodluck Jonathan, the government will not sell the Transmission Company of Nigeria.

But the transmission company, which is in charge of the National Grid, will be managed by the private sector.

The roadmap reads, “With regard to the medium to long term horizon, the government intends that full responsibility for the operational effectiveness of the distribution companies should shift from the Federal Government to the private sector no later than 2011.

“Nevertheless, the actions and decisions of the Federal Government will continue to exert a significant impact on their commercial effectiveness.

“All the distribution companies are expected to be privatised based on a core investor sale of a minimum of 51 per cent of the government‘s equity in the companies.

“The PHCN successor, thermal generating plants, will be privatised via the sale of a minimum of 51 per cent equity to core investors that clearly demonstrate the technical and financial ability to operate and expand each plant.”

Jonathan had at the unveiling of the roadmap in Lagos, said that the Federal Government was preparing to leave the power sector in the hands of private operators.

He explained that the government would retain the transmission grid and regulate the operators of the generating and transmission companies.

Not a bad idea. Lets hope the power sector turns out well the way the telcommunication sector is, but with low rates.

That's why phcn they vex lately.

Ahaaa! A long awaited move. Hope someone frm nowhere will come and truncate d timetable prematurely as usual.

Good but we shall wait for the Price per unit

rethink:

Price per unit

Exactly

WE MIGHT SAY A GOOD MOVE, BUT WHAT HAPPENED TO NITEL THAT WAS PRIVATISED ?
NIGERIA AIRWAYS ONLY GOD CAN SAVE FROM CORRUPT LEADERS.
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they should have done this long ago

BUT WHAT HAPPENED TO NITEL THAT WAS PRIVATISED ?
NIGERIA AIRWAYS ONLY GOD CAN SAVE FROM CORRUPT LEADERS.

the words above should be taking to considration.it means only the rich will have constant electricity supply cos there will be escalating price. now someone should tell me how many nigerians can afford #500 recharge card a day? and as it is, to make comfortable calls you must be able to buy that amount of card a day.they should not just fool us around and ony make reformation in the sector than selling it to themselves.

Not good enough. Sell it all. Even if the federal govt ends up having 10% stake a corrupt minister and his aids can still wield enormous influence that could jeopardise the fortunes of resulting company

It's a good move because it gives more power to the consumer.
I'm sure consumers can opt out of their service if they think it's too costly
or the supply is cra.ppy.

If its too expensive then we will see if only a few rich customers can sustain returns.

hackney:

It's a good move because it gives more power to the consumer.
I'm sure consumers can opt out of their service if they think it's too costly
or the supply is cra.ppy.

If its too expensive then we will see if only a few rich customers can sustain returns.

Exactly!!

The idea to divest some interest of the Federal Government in PHCN is not a bad idea,friends.The challenge we've always had in high profile corruption at different levels of the machineries of govt.Let's not jump to conclusions now.With God all things are possible!naija must succeed ,any how.

This is a very good move.

May this put an end Electricity in this country.

I only hope the government effective regulate the prices that the private companies charge

Government wants to make another blunder again,like the sale of NITEL,Nigeria Airways,etc, what stops government from commercialising (not privatising)it.Bring other firms into the terrain to compete with NEPA at all segments of Power(transmission,disribution and marketing).This proposed arrangement will breed another collapse,no government wants a monopolised economy,as this sale of NEPA will end up in the hands of politicians and their cronies.
Our government has not leant their lesson from the sale of their core assets by the BPE,which is still subject of various litigations.

Good move but at what cost per unit will this translate to for the end user for instance my bill for last month was almost 10grand and when this move is implemented what will it translate into bill for me?
Or will it mean that i will not be able to put on more than a bulb , the ac only on every other 4 hours frigde for half the day same for the freezer or will i be able to afford having the necessities on at all time without  robbing the bank?

i think Nigeria citizen should wake up,if this is not political deceit whereby the so called POLITIANS are transfering the government owns company to individual company all in the name of PRIVATIZATION. where is NITEL that was privatize, what are the benefit to the average nigerian citizen, what are economical benefit to the masses at large. the vision 2020 we are envisaging for ,what would be left behind for the upcoming youth of this country. where in the whole world is POWER SECTOR being control by any private company, when an average nigeria citizen can not live on three square meals a day, now being charge high rate of electricity tarrif. i think the best solution is to adopt PUBLIC PRIVATE PARTINERSHIP[PPP] and give room for private company partinership with government, instead of total elimination of PHCN. i believe with this, there will competition in the sector and more employment will be available if well adopted. so it is the right time to think about it, before it will be too late. i hereby called on the Educationist, student, Artisans and Nigerian at large to reason beyond the present challenges.

i think nigeria is the worst country in this world.
look at everybody celebrating political statements that we have been hearing since 50 yrs back.
if the electricity sector becomes ok, what will pdp use to campeign?
under obj, he seized the petrolium ministry and under goodluck, he has seized the power sector who knows what the next president will seize?
a couple of yrs back, we were here celebrating 7 point agenda today 51% stake to be sold while before then, we have had operation feed the nation, green revelution, vission 2000, vission 2010 all full of endless lists of promises.
God pls come and help us.
look at nigeria that was fighting for south africa yesterday. can we measure in anyway with south africa now?
in the 80s, we were saying GHANA MUST GO. today, who must go? nigerians all over the world must go. let everybody come home and display him own partern of madness. we celebrate promises as if other countries are thinking of electricity, kidnapping and all these selections called election in nigeria.
the president of nigeria must look back at those who have mingled with obasanjo in the past and know where they are now.
all the minerals resources in nigeria are God's gift to all of us and not few.
many suffering and dying nigerians are praying and crying to God on daily bases so i will suggest they all thread with caution.

Let's hope this will work out this time, but i think the private sector will greatly transform how powere is being operated in Nigeria

http://lekanbaruwa.

51% is too small.

nice move

i think it is best if we wait and see how it works first.
One cannot tell, it might be a political tool to be used in getting the presidency,by making himself a better candidate than Babangida, or as a South South person, may be tired of the injustice of people thriving of the unavailability of the essential basic ammenities that pretty much defines the average citizen of this era.

I have been enjoying the pre paid meter for more than 3years and i can tell that it is a better deal than what PHCN gives on the post paid.(i traveled for a year during this period and my N1,5k credit was still intact, and i have used it for another three months)
lets see the way it works, one can pray for competition. The only hiccup to that is, unionism will still make them have a uniform rate which still kills the competition.

Every responsible government would be expected to follow international trends when making major decisions affecting the future of a public utlity of such magnitude as power.

There are many reasons why power supply should not be wholly privatised. 'Asset-stripping' is just one of the more obvious ones. The lack of regulatory control by the state is yet another.

A privatized company is free to do whatever it pleases with its assets.

The current tried and tested global trend suggests that PPP should have been the approach embraced by Nigeria. Whereby the experienced private sector will design, build, finance and operate (DBFO) our power generation, transmission, and distribution of power.

During this operational period, the management is still under regulation by the govt agency (PHCN).

After say 30 years of stable power supply to our homes, the facility can be returned to the state.

For those who are skeptical, believe me what Jonathan is planning is not in favour of the private sector but the consumer.

He is trying to unbundle the sector. It is a current trend internationally. When a city in the US switch its gas distribution to this model, the old companies that were inefficient almost went bankrupt. They had to provide very efficient service, operate at low running cost and woo consumers to survive. The profit margin for the services were capped by the competition. Consumers always had an alternative choice.

There are only two things that will ruin the models if he allows them:
1. He intends to retain government ownership of transmission grid, probably for National security. If he allows government company to run the grid, the whole model will be messed up since there will be no profit link to maintenance and efficent servicing of the grid. The transmission grid must be concessioned out in small area units, even if the government still owns it.

2. The market entry barrier must be very low. Especially for the distribution business. There should be no huge licence fee as in telecoms. Infact distribution companies should not require licence only registration with the regulator and contract with the consumer.

Quite a good move, looks live jonathan is hoping this will help his bid for 2011.
never-the-less, he is the first leader to make any realistic positive move on improving our eratic power supply.
Hope it works out, he should just watch-out for the thousands of croonies and PHCN chiefs who will be looking for a root to jeopadize the whole project.

privatize

KenGali:

For those who are skeptical, believe me what Jonathan is planning is not in favour of the private sector but the consumer.

He is trying to unbundle the sector. It is a current trend internationally. When a city in the US switch its gas distribution to this model, the old companies that were inefficient almost went bankrupt. They had to provide very efficient service, operate at low running cost and woo consumers to survive. The profit margin for the services were capped by the competition. Consumers always had an alternative choice.

There are only two things that will ruin the models if he allows them:
1. He intends to retain government ownership of transmission grid, probably for National security. If he allows government company to run the grid, the whole model will be messed up since there will be no profit link to maintenance and efficent servicing of the grid. The transmission grid must be concessioned out in small area units, even if the government still owns it.

2. The market entry barrier must be very low. Especially for the distribution business. There should be no huge licence fee as in telecoms. Infact distribution companies should not require licence only registration with the regulator and contract with the consumer.

Agree with you, except for the market entry barrier. There should be a license fee commensurate with the long term revenue potential of the market. A low entry barrier will result in names like 'God-Dey Power' becoming sector players easily. Just like the bogus NCD bill in the energy sector. Only those players that can run a profitable operation that scales should be able to bid.