Business Hilights
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Review power firms’ performance now, not next year, consumers tell FG

Barely 24 hours after the Director-General, Bureau of Public Enterprises (BPE), Mr Alex Okoh, disclosed this in a statement that the agency will review the performance of the electricity distribution companies carved out of the defunct Power Holding Company of Nigeria next year, Nigerians have called for the review this year.
Consumers who spoke to Business Hilights in Lagos, Abuja and Kano, said shifting the review to next year is an indication that the government is colluding with Discos to rip off helpless Nigerians in the power sector.
Whereas Okoh said the five-year period stipulated in the performance agreements signed with the core investors in the distribution companies for the final review of their handling of the Discos would fall due on December 31, 2019, respondents stressed that there is no need to wait for next year when it has become clear that the concessionaires’ are failing both in service delivery and required investments in their respective companies and service undertakings nationwide.
BPE stated thus: “Following the interest shown by various stakeholders in the electricity industry and indeed the general public with regard to the date for the final review of the performance of the privatised electricity distribution companies, the BPE wishes to clarify as follows:
“That pursuant to the successful conclusion of the privatisation transaction for 10 of the Discos, the utility companies were handed over to the core investors on the 1st of November, 2013.
“The associated performance agreements signed in August 2013 provided, among other performance indices, that the core investors covenanted to achieve agreed reduction targets of aggregate technical, commercial and collection losses.
“That due to lack of adequate technical information relating to the state of the infrastructure at the time of concluding the transaction, the base level of losses in the utilities imputed in the performance agreements were based on provisional estimates. That the terms of the performance agreements provide for a five-year tenor during which the core investors in the Discos are required to fully achieve far-reaching efficiency improvement targets.
“The performance agreement further provides that a study to establish the baseline level of aggregate technical, commercial and collection losses for the performance measurement will be carried out by the Discos within one year after takeover and the outcome presented to the Nigerian Electricity Regulatory Commission (NERC) for approval.
“The approved loss level shall form the basis of determining the performance of the core investors by the BPE and subsequent tariff computation by NERC.”
It would recalled that the BPE had approved the outcome of the baseline loss study and issued a tariff order, with an effective date of January 1, 2015, but endless complains of abysmal performance, abuse of estimated billings system and official delays and bureaucracies in delivering prepaid meters.