May 30, 2024

Disco poor performance : FG to resell distribution companies July

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Ilenre Irele

The Federal Government has said plans are afoot to revoke and take over Distribution Companies (DISCOS) that are in debt and unable to effectively perform their roles in the next three months.

Some of the DISCOs are managed by banks and the Asset Management Corporation of Nigeria (AMCON) and have defaulted in loan servicing.

Abuja Electricity Distribution Company (AEDC) is currently under the management of the United Bank of Africa (UBA), Benin Electricity Distribution Company is managed by Fidelity Bank, and Kaduna Electricity Distribution Company and Kano Electricity Distribution Company are managed by Fidelity Bank. Ibadan Electricity Distribution Company is under AMCON management.

The Minister of Power, Adebayo Adelabu, said this on Monday while receiving the Senate Committee on Power led by Senator Eyinnaya Abaribe who visited his office during an oversight function in Abuja.

Adelabu said the power sector is crisis-ridden and has existed for over 60 years without permanent solutions in sight or a plan to fix the problems. While adding that the crises in the sector have defied known solutions, he nonetheless called on Nigerians to be more patient with the government as solutions are in sight.

According to the minister, the Federal and State Governments combined have 40 percent stakes in all the DISCOS. He said henceforth, federal and state governments will be more involved in the operational processes in the power sector.

He said, “Power drives economic growth and development. No sector can perform without stable power. The power sector is crisis-ridden. We were born into this crisis. These crises have defied any known solutions in the last 60 years. No sector of the economy or part of the country has enjoyed power. We plan to break the jinx.

“We are taking the right steps in the right directions. We only need to endure the reforms we are carrying out. When we are done, people will enjoy it. Our major issue in the power sector is that of liquidity. We are in debt. Customers are not allowed to pay the market value for what they consume.

“The Federal Government owes power companies about N1.3 trillion in subsidy. We owe them $1.3 billion for gas supply. We have only 13,000 installed capacity megawatts of electricity. But as a country, we have never generated more than 5,000 megawatts.

“Distribution Companies are not demanding enough power from Generation Companies. DISCOS still owing commercial banks will be sold off to technical owners. We will also break these DISCOS on a state basis. We have left the sector for too long in the hands of the private sector. We still have 40 percent stakes. We will move in.”

Senator Abaribe, in his remarks, said the Senate will, from next Monday, April 29, 2014, conduct an investigative hearing on the recent electricity tariff hike by the Federal Government, which was rolled out without due consultations.

“We are here on an oversight visit. Pursuant to a resolution of the National Assembly, we have already invited the Minister and other stakeholders of the Ministry over the payment for power by Nigerians.

“I am saying this so that in the course of discussion, nobody will delve into the issue of power tariffs. There is already an ongoing hearing by the National Assembly on that issue. And that will hold on the 29th of April this year,” Abaribe stated.

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