Cablegate: Privatization Leaders Praise Previous Usg

VZCZCXRO8091
PP RUEHMA RUEHPA
DE RUEHOS #0653/01 2691048
ZNR UUUUU ZZH
P 261048Z SEP 07
FM AMCONSUL LAGOS
TO RUEHZK/ECOWAS COLLECTIVE PRIORITY
RUEHUJA/AMEMBASSY ABUJA PRIORITY 9217
RUEHC/SECSTATE WASHDC PRIORITY 9447
INFO RUFOADA/JAC MOLESWORTH AFB UK
RUEKJCS/SECDEF WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHDC
RHMCSUU/DEPT OF ENERGY WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAIIA/CIA WASHINGTON DC
RHEFDIA/DIA WASHINGTON DC

UNCLAS SECTION 01 OF 02 LAGOS 000653

SIPDIS

SENSITIVE
SIPDIS

DOE FOR GPERSON, CGAY
STATE PASS OPIC FOR ZHAN AND MSTUCKART
STATE PASS TDA FOR EEBONG, PDAVIS
STATE PASS EXIM FOR JRICHTER

E.O. 12958: N/A
TAGS: EPET ENRG PGOV NI
SUBJECT: PRIVATIZATION LEADERS PRAISE PREVIOUS USG
ASSISTANCE

1. (SBU) Summary: The leaders of Nigeria's Bureau of Public
Enterprises (BPE) and the Nigerian Electricity Regulatory
Commission (NERC) expressed their appreciation for US Trade
and Development Agency (TDA) support in Nigeria, but noted
that American financial assistance for privatization had
ceased. The BPE chief claimed the proposed restructuring of
Nigeria's national oil company was the result of her agency's
work and discussed the prospects for current oil and gas
legislation. End Summary.

--------------------------------------
TDA Helped Boost Privatization Efforts
--------------------------------------

2. (SBU) Irene Chigbue, Director General the BPE, gave an
overview of ongoing efforts to privatize Nigerian state-owned
companies during an introductory meeting with Econoffs.
Chigbue recalled that the United States had been the first
country to aid Nigeria in its privatization efforts. She
recalled that TDA consultants had conducted several
privatization studies on Nigerian state-owned firms and the
USG had provided funds to hire consultants to assist the BPE
staff directly. Chigbue noted with obvious regret that
"other entities" had taken advantage of those funds and the
money for BPE quickly dried up. The World Bank and later the
UK's Department for International Development stepped in to
provide financial support, but she said the United States was
the economic model they looked to as a guide and the American
consultants on her staff had been invaluable to the BPE.
Chigbue expressed her hope that the United States would once
again provide support to the BPE.

3. (SBU) Dr. Ransome Owan of NERC also noted the positive
role TDA had played in assisting his government's efforts to
privatize the struggling Nigerian power sector. During the
meeting in which he described ongoing privatization
initiatives, Owan recalled that TDA had provided more than
$500,000 for a study on electricity issues. He asked for
further assistance in training of NERC commissioners and
raised the possibility of partnering with an American state
electricity commission. (Note: A TDA team is currently
in-country assisting NERC. Embassy and NERC will hold a
joint press conference in Abuja October 2 to highlight that
assistance and, for the GON's purposes, to show some movement
towards generating increased power supplies for the
underserved people of Nigeria. Congen Lagos and Embassy
Abuja would appreciate addressees thoughts on possible
twinning arrangements for NERC with a US state-level
regulatory body. End Note.)

--------------------------------------------- -----
BPE Chief: Energy Bills Must Start from Scratch
--------------------------------------------- -----

4. (SBU) On President Yar,Adua's recently announced plans to
restructure the Nigerian National Petroleum Corporation
(NNPC), Chigbue took credit, saying the original plans for
doing so had come from the BPE. In fact, she noted that
previous plans to privatize NNPC had stalled because of a
failure to enact legislation that would liberalize energy
sectors in Nigeria. Some enabling gas sector legislation was
introduced in the National Assembly during its last session
but failed to make its way through the legislative process.
According to Chigbue, the enabling gas sector legislation
must now start over again and the BPE would take that
opportunity to conduct major revisions of the bill.

5. (SBU) When asked about plans to privatize Nigeria's aging
and troubled oil refineries she admitted the international
oil companies expressed little interest in acquiring them and
said she understood the myriad of reasons that keep them
away. She did say some Chinese and Indian firms had
expressed interest, but did not provide further details. Nor
did Chigbue comment on the public controversy surrounding the
sale by the previous administration of two refineries to a
private Nigerian consortium. That sale was reversed by the
current administration under a hailstorm of criticism that

LAGOS 00000653 002 OF 002

the refineries had been sold for much less than their actual
worth.

6. (SBU) Comment: TDA's support to Nigeria's privatization
efforts was greatly appreciated by the Nigerians and,
according to them, instrumental in kick-starting those
initiatives. We have heard many opinions on the status of
energy legislation not finished in the previous Assembly
term. Chigbue's view that gas sector legislation must start
over differs from the view expressed by the Senate Gas
Committee Chair, Osita Izunaso, who indicated that passage by
the Senate would allow the House Committee to immediately
move forward on the bill. End Comment.
MCCONNELL

© Scoop Media