Privatization: Fashola Says Lagos Has Been Unjustly Treated In The Federatiion
• Demands refund of N16 billion illegal deductions on Power by FG
Jul 10, 2012 - Lagos State Governor, Mr. Babatunde Fashola (SAN), Tuesday called on the Federal Government to refund the N16 billion deducted from its allocation from the Federation Account over its investment in Power saying the State has been unjustly treated in the ongoing privatization exercise.
Governor Fashola, who spoke at the Lagos House, Alausa, while playing host to the Senate Committee on Privatization which paid him a courtesy visit, also asserted that if the nation must make a success of the privatization exercise in the Power Sector, it must start from Lagos.
The Governor told the Committee led by its Chairman, Senator Gbenga Obadara, "Perhaps, the first thing I will say is that our State has been unjustly treated continuously in this Federation, especially, when it comes to privatization of assets".
"We have been given the short end of the stick consistently. Given our contribution to the national economy, there has been no reciprocity. Our assets and our lands have been servicing the nation; these lands were there before they were acquired by the Federal Government for government business and we are saying, if if they are no longer serving government business we are supposed to take our land back", the Governor said.
Describing it as social injustice, Governor Fashola said Lagos State has been "the orphan of the entire Federation", adding that the Federal Government took the State's assets and gave nothing in return in spite of the fact that the State contributes the highest quota to the Gross Domestic Product (GDP) of the country.
Explaining the genesis of the N16 billion illegal deductions, Governor Fashola said, "We invested in Power Plant, the power was not dedicated to Lagos, but they have deducted about N16 billion of our money in spite of court orders. Now, we get punished for taking the initiative".
He said although the State Government supports the privatization exercise and would not stand on the way of its success, if the money was not refunded, it would constitute clogs to the successful execution of the exercise.
"There is a standing liability to us by the PHCN, the illegal deductions of N16 billion for power that we did not get, for the power that other states used. Now, those are issues of social and economic injustice that must be resolved before we can even have a successful privatization exercise. We are in court and there is arbitration", the Governor said adding that he has written to the National Assembly to say that those are "red flakes to the successful completion of the exercise.
Noting that the debt would be part of the due diligence obstacles for any concessionaire to cross, Governor Fashola warned, "If our money is not paid, clearly there will be issues of financial caution, I can tell you that", calling on the Committee to persuade the National Assembly to make appropriation to refund the N16 billion to Lagos State.
"It is no longer a question of who is right and who is wrong. The impact of Power to the National Economy is more than N16 billion", the Governor said, adding, "Now, if the PHCN workers that went on strike at the onset of Power Reforms were paid, why should we not be paid because we did not go on demonstration; we are being civil".
Governor Fashola insisted that for the privatization of the Power Sector to be successful, "We must put our best foot forward in Lagos because the Power demand is here, the Power assets is here", warning that if the Federal Government should put on the attitude of "we can do it without them", there would be problems ahead.
"Most of the distribution assets are here, We have invested in transformers, feeder pillars, poles, cabling and others. Those are the distribution assets any concessionaire is going to use. We have a transformer manufacturing company in Lagos where we are producing transformers and distributing to communities", the Governor said pointing out that so far the electricity regulatory company has come to inspect the assets.
Noting that there is a provision in the Constitution that allows states to distribute power in areas not covered by the National Grid, Governor Fashola said such areas were not defined and called on the Committee to take up the task to legislate on such issues so that concessionaires and private investors would know which areas to invest in distribution.
The Governor also called on the Committee to assist to create "Greenfield Power Distribution Companies" saying they would act as backups for the 11 distribution companies carved out of the PHCN.
"It is not enough to say that the 11 distribution companies carved out of the PHCN are the only ones because if you look at the NITEL story, it was the Greenfield telecommunications companies that ultimately baled us out of our problem. So we must have Greenfield distribution companies that carry no baggage.
Governor Fashola condoled with the Senators over the tragic death of their colleague in Jos, Plateau State recently commending them for being able to continue to carry out the important national assignment despite the tragic incident.
Earlier, in his opening remarks, Chairman of the Committee who represents Ogun Central Senatorial District, said the Committee was in Lagos to inspect the Egbin Thermal Station in Ikeja and the Eko Business District as part of its oversight functions on the processes for the Privatization of the Power Sector.
According to Senator Obadara, the Committee was at the Lagos House, Ikeja, "to pay courtesy call on His Excellency, the Governor of Lagos State, Mr. Babatunde Fashola (SAN) with a view to interface with the State Government on areas of mutual interest in the drive towards improvement in the Energy Sector and to appreciate the efforts being made by the Lagos State Government in the Independent Power Project scheme".
Also present at the occasion from the State Government side were the Chief of Staff, Mr. Lanre Babalola, Commissioner for Mineral Resources and Energy, Mr. Taofiq Tijani and his Economic Planning and Budget counterparts, Mr. Ben Akabueze, the Attorney-General and Commissioner for Justice, Mr. Ade Ipaiye, the Special Adviser on Public Private Partnership, Mr. Ayo Gbeleyi and his Information and Strategy counterpart, Mr. Lateef Raji.