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FG Gives Power Sector Contractors Transaction Guidelines

New Tariff, power sector; FMBN; Mass housing
Posted: Aug 17, 2016 at 6:20 am   /   by   /   comments (0)

The Federal Government has given guidelines to contractors seeking to do business with the government on power sector related projects.

Babatunde Fashola, the Minister of Power, Works and Housing, provided the insights on Tuesday in Abuja.

Fashola spoke when a delegation of the Nigerian Investment Promotion Commission (NIPC) led by Hajiya Ladi Katagum, Acting Executive Secretary, paid him a courtesy visit.

He reiterated the fact that government role in power development was currently largely regulatory, adding that in terms of power the ministry was in daily receipt of all sorts of tested and untested power ideas.

He advised power contractors to be focused on doing business through the proper channel.

The minister said that the Federal Government only regulates the standard of safety of meters and the installation process to ensure safety.

He further warned that people who were interested in building transmission lines should undertake contract with government companies like the Transmission Company of Nigeria (TCN).

Fashola said that the ministry would always intervene to solve related problems.

“People who want to supply meters should contact the Discos; government is not buying meters anymore but government is driving policies to ensure that consumers get meters.

“As for those who want to generate electricity, we have a policy to produce electricity by as many means as it is possible; namely by gas, cool, water and solar and in some places where wind energy is viable.

“For you to produce power you must first have a licence issued by Nigerian Electricity Regulatory Commission (NERC), so power contractors should go to NERC not the ministry.

“If they got a licence they need a document called ‘power purchase agreement’ which is for now being signed off by Nigeria Bulk Electricity Trader (NBET), a government company; the ministry oversees what they do.

“The government protects consumers, you can’t just throw any tariff at them,’’ he added.

Fashola said that power purchase agreement could enable one to do power project and if the tariff is high the ministry would not approve it because of its obligation to consumers to give power on a competitive and fair price basis.

“Businessmen and investors must also be thorough; they must comply with requirements, follow our processes and respect our laws. Your plan must synchronise with TCN,” said the minister.

On what the investment promotion outlook could benefit from, he listed inspection of contracts as the first, adding that there must not be basis for any capricious cancelation of obligations.

“Undoubtedly, infrastructure support will be helpful to investment which is what the government is focused on trying to bridge the infrastructure deficit to improve competitiveness of our business environment.

“A clear fiscal policy that enables capital injection and capital repatriation will be helpful and all of these are being dealt with the government simultaneously.”

He assured investors that government was showing its capacity to protect and secure them with their assets.

“We are mindful of the interest that has been shown in the sectors for which the ministry has responsibility, especially power and also real estate and housing development.

“But we also see that some of the decisions of the past were driven by businessmen rather than the policy of government and we think that it is the policy of government that should enable that business to take a position.”