Electricity: Uncertainty, as DISCOs bid to pull out


By Udeme Akpan & Gabriel Ewepu

Electricity Distribution Companies, DISCOs, have petitioned the Bureau of Public Enterprises, BPE, seeking to return the privatized power assets to government over what they considered as undue interference in their operations.

Investigations by Vanguard, yesterday, indicated that their action was propelled by recent developments, especially the planned forensic audit of the operations of DISCOs and the directive of the Central Bank of Nigeria, CBN,  that banks should commence collection of tariff, targeted at enabling them recover huge loans granted them to buy the assets.

The Director, Research and Advocacy, ANED, Mr. Sunday Oduntan, could not be reached, yesterday, for comments.

But the managing director of one of theDISCOs, who pleaded anonymity, said: “I am aware that the DISCOs have reported the situation to BPE. Many people and institutions have not been fair to the DISCOs.

“The privatization of the assets was based on an agreement to be kept by the DISCOs and the government, which still has 40 per cent interest in the companies.

“In looking into our operations, the first thing should be to find out the content or details of that agreement. The next thing should to look at the steps taken by all parties to comply.

“As far as we are concerned, the DISCOs have done a lot to comply with the terms of the agreement because without such compliance, the privatization would not work.

“It is not fair for some authorities to start talking about forensic audit and using alternative options to collect the tariff, which is the major obligation of the DISCOs.

“We have reviewed these and other issues severally among ourselves. We have also made our position known to relevant government agencies, including BPE and the Nigerian Electricity Regulatory Commission, NERC.”

No word from DISCOs on pull-out, says BPE boss

In his reaction, the Director-General of the Bureau of Public Enterprises (BPE), Mr. Alex Okoh, said that his organisation has not received any communication from the DISCOs to the effect that they want to relinquish the distribution companies.

His words: “We are not in receipt of any such communication from any DISCO.

“There have been efforts towards transparency in the collection of revenue in the sector  which was why the CBN gave the directive to banks on the collection of electricity revenue.

“There are discussions between the DISCOs and relevant stakeholders and these discussions have been constructive.”

However, briefing reporters after the weekly Federal Executive Council (FEC) meeting in the State House recently, the Minister of Power, Mr. Saleh Mamman, had said whereas Nigeria currently generates 13,000 megawatts of electricity, it transmits 7,000 to DISCOs, while the distribution companies could only distribute 3,000 megawatts to end-users.

READ ALSO: The Nigerian electric power industry (‘NEPI’) report – Agusto

According to him, DISCOs have continued to demonstrate a show of incapacity, inefficiency and dishonesty in the distribution of power to consumers, despite the huge investments made into the sector by the federal government since the privatisation of the power sector in 2013.

DISCOS have failed, says NECAN

In a telephone interview with Vanguard yesterday, Secretary-General, Network for Electricity Consumers Advocacy of Nigeria, NECAN, Mr. Uket Ogbonga, said:  “We have been reliably informed that the DISCOs have declared their readiness to hand over power assets back to government, alleging that government has failed to keep its own part of the agreement.

“As far as we are concerned, this may compel the government to back-pedal on recent actions, especially the forensic audit, which was recommended by Governor Nasir El- Rufai-led Committee and the CBN directive, urging banks  to take over tariff collection in order to recover loans extended to the DISCOs.

“The government, which holds 40 per cent in the privatised companies, should not withdraw for some reasons. Nigerians need to know the true state of affairs in the DISCOs. We need to know the number of consumers each DISCO controls. We need to know the amount they generate as tariff monthly. We need to know how these monies are deployed.”

The secretary, who noted that the DISCOs had earlier threatened to go to court before taking the BPE option, said: “The DISCOs have failed to live up to the expectation of the public since privatisation. The banks should go ahead to collect the tariff. It is in the best interest of the nation.”

Power outage

Investigation by Vanguard weekend showed that some parts of Lagos, especially the suburbs, did not have supply throughout the weekend.

The management of Ikeja DISCO could not react officially yesterday, but an informed source in the company, said: “Under the current arrangement, all customers would not have access to the same hours of power. We extend more hours of service to customers who have the capacity to pay more than others.”

CSO cautions FG on policies that can hurt economy

Reacting to the alleged decision of DISCO to pull out from the power sector following government’s policies, the Convener, Concerned Nigerians Group, CN, Deji Adeyanju, Sunday, cautioned the Federal Government on policies that might hit the economy badly.

Adeyanju said: “The approach of the government is not well thought out. If you look at it people have invested billions in these DISCOs, and government should not do anything that would make people pull out from the country because our economy is so badly hit. Whatever policies government policies show to these investors it will determine how market forces will react.”



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