Under the Nigerian
privatisation programme, the issues of risk allocation and mitigation were
never always properly handled. Historically, there had always been a tendency
to dump all the project risks on the private sector partner without properly
evaluating whether it was capable of managing them. Extant literature has shown
that where the comparative advantages of parties to handle risks are not
properly taken into consideration, the allocation of risk is unbalanced and the
tendency for the project to run into difficulties and/or fail increases. This
paper looks at the electric power sector privatisation, distilling how key
project risks were handled under the exercise. This should be a good pointer as
to whether the privatisation exercise would be a success in the long run.
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