DisCos decline ‘takeover’, says FG owing them N100 billion – Nexus News
Distribution Companies (DisCos), yesterday, berated the Federal Government over what they depict as ‘renationalisation’ of electricity firms.
They stressed that the government, via the Bureau of Public Enterprise (BPE) and Nigerian Electricity Regulatory Commission (NERC), reportedly has a hand in the failure of the power sector by not “meeting extant guidelines and regulations.”
Association of Nigerian Electricity Distributors (ANED), an umbrella body of the DisCos, in a press release, stated that that government failed to fulfill a N100 billion subsidy and other privatization pledges made since 2013.
At least five firms – Abuja DisCo, Benin DisCo, Ibadan DisCo, Kaduna and Kano DisCos – have fallen into the hands of banks they took loans from after being unable to break even eight years after licensing.
The current situation, which comes a few days after NERC declared a contract-based electricity market, stakeholders disclosed that the development might worsen the industry’s woes, citing an alleged breach by BPE and NERC.
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Executive Director, Research and Advocacy, Sunday Oduntan, noted that the utility companies are deeply disturbed about the “restructuring” of the five electricity distribution firms, adding that the move “is inconsistent with all the guidelines and processes necessary to comply with the framework of privatization agreements and the rule of law.”
According to him, the resultant outcome of the decision has been an expropriation or backdoor renationalization of the DisCos by the Federal Government.
He went on: “Such renationalization or expropriation must be viewed through a historical context as necessary for a proper understanding of the performance challenges that the DisCos have been faced with since privatization.
“Fundamentally, the basis of privatization was flawed from the beginning, due to conditions that were not met by the Federal Government, while expecting the DisCos to meet their performance obligations. Not only were the investors short-changed because of insufficient and unreliable data that was provided by BPE to them during the privatization process, but the government also committed to and failed to deliver on DisCos’ debt-free financial books, payment of Ministries, Department and Agencies (MDA) electricity debts and N100 billion subsidy.”