The Effect of Privatization and Commercialization on Government Owned Enterprise (a Case Study of National Electric Power Authority NEPA Enugu)

Abstract

This is a concise plan on how to undertake the writing on the effect of privatization and commercialization on government owned companies a case study of National Electric Power Authority (NEPA) Enugu, Comprising the Transmission and Distribution Divisions - Enugu. NEPA is a crucial Power Sector to the economic, social technological.... and industrial development of our country. It is established in the companies Act Cap 256 Laws of the Federate 1990 section (1) 4 of the enabling Act. Due to the unprecedented economic problems in the low power generation capacity resulting to constant power outages, wastages and vandalization of its equipment, government thought it obvious to reform it through privatization and commercialization. Although, NEPA has been commercialized for the past ten (10 years, the agreement was between Federal Government of Nigeria, National Electric Power Authority and the Technical Committee on Privatization and Commercialization (TCPC) NEPA got the better end of the agreement in that it enjoyed the following benefits:- (1) Increased salaries to staff

(2) Freedom from bureaucratic control of the ministry and its board of directors (3) Newly restructured system. The TCPC agreed with NEPA on the performance criteria which is based on:- (1) The ability to exceed annual targeted revenue; (2) Ability to reduce annual operational cost; (3) Ability to collect outstanding debts and also to charge competitive rates on them properly compared to other operators of electricity in the West African Sub-region. However, NEPA did not honor the performance part of the agreement, this become obvious that commercialization of NEPA was a failure and the only viable solution, will be to privatize the enterprise. NEPA was hence approved for privatization by the National Council on privatization Decree No. 28 of 1999. This project work will highlight the effect of privatization programmed on government owned company (NEPA), in the other hand commercialization programme will be highlighted concerning steps to be taking in its revenue collection, organization and management structure and staff fringe benefits according to revenue generated. In the course of the study , data for the research work was gathered from Enugu State Library and NEPA -Information Journals and other relate d material available. The findings of the report were presented in a logical order capable of bringing out the effect of privatization and commercialization in government owned companies. The work was presented in chapters: Chapter one comprises the introduction, scope, objective and its significance. Chapter two reviews the related literature, while chapter three deal s with the research methodology and source of information. Information were source through the use of questionnaire and oral interviews. Chapter four considered data organization , analysis and presentation. Chapter five summarized the study, made recommendations and offered conclusion. Finally, the researcher do not claim to have carried out an exhaustive study on the subject matter hence she proffered suggestions on the area s for further research.