Business Hilights
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Why lead labour unions oppose FG’s N39bn loan to Discos

Leading labour unions in Nigeria’s energy sector, the National Union of Electricity Employees (NaUEE) and the Senior Staff Association of Electricity and Allied Companies (SSAEADC), has joined the Trade Union Congress (TUC) to mount opposition campaign against the planned release of about N39bn to power distribution companies (Discos).

Their reasons were anchored against the backdrop of the agreement originally signed by the Discos that they had the financial powers to invest and turnaround the distribution arm of Nigerian power sector.

A senior official of the NaUEE who spoke to our correspondent on Sunday in Abuja, further explained they may approach a federal high court to seek interpretations of the power distribution agreement signed by Discos with the federal government.

According to the official, the aim of the suit is to determine whether a government that had signed privatization agreement on grounds of technical knowhow and financial muscles can turnaround to provide any form of funding for same concessionaires, using public fund.

The official, who pleaded anonymity, queried the rationale in giving money to concessionaires’ who had ab-inito signed that they had all it takes to fund their activities.

Business Hilights recalls that the Minister of Power, Works and Housing, Babatunde Fashola, had during the recent 18th power sector stakeholders’ meeting, announced that the N39bn loan would enable power distribution companies to procure meters to reduce the huge metering gap in Nigeria.

Besides, during the meeting General Secretary of NaUEE, Joe Ajaero, asked the AEDC’s Managing Director, Ernest Mupwaya, if it was right for the Federal Government to provide funds to power firms after selling out the companies to private investors.

According to him, NUEE was not in support of the N701bn intervention fund being provided by the Federal Government to power generation companies, adding that the union was also against the move by government to provide N39bn financial support to distribution firms for meter procurement.

Ajero argued that “If after four years of running as private companies you (power firms) are still looking for bail-out funds or loans, then I think there is a problem, because it shouldn’t be so”.

In his submission, President-General, SSAEAC, Chris Okonkwo, noted that “Labour will not accept the borrowing of N39bn by the Federal Government to Discos for the procurement of meters. We raised this issue at the Trade Union Congress meeting and we advice you (Discos) to start looking for alternatives”.