More rejections have continued to trail the planned escrowing of accounts of power distribution firms and their Gencos counterparts, but several industry experts have mounted pressure against the plan.
Sunday Oduntan, Executive Director, Association of Nigeria Electricity Distributors (ANED), said attempts to escrow the companies’ accounts run counter to the objectives of the National Electricity Power Policy, 2001 (NEPP) and the Electric Power Sector Reform Act, 2005 (2005).
In an interview, he said “the plan to escrow the account of DisCos would also send wrong signals to domestic and international investors that Nigeria is not fully open for private sector investment”.
“You cannot have a, supposedly, private sector-owned and managed business in which the government now seizes control of its revenues. It is a contradiction in terms and practice. The same principle applies to any consideration of regulations or government action that intrudes into corporate responsibilities of procurement, financial management or personnel management”, he said.
But in a swift reaction, the Minister of Power, Works and Housing, Mr. Babatunde Fashola argued that the escrow condition was agreed by the power distribution companies with the central bank as a condition for offering them stabilisation funds by way of loans to fund the business they invested in because commercial banks were reluctant to do so.
He explained that the loan was at 10% interest which is well below commercial banks’ rates.
But in another twist trialing the debate, Senior Staff Association of Electricity and Allied Companies (SSAEAC) has expressed the Federal Government’s plan to escrow the accounts of power distribution companies, saying it’s a right step in the right direction.
The union also went hard on power distribution companies’ claim that escrowing their account would amount to nationalisation, saying that such position is propaganda and blackmail as the performance and sincerity of the companies in declaring collection would have made it unnecessary.
“On the contrary, escrowing of account would send signals to both domestic and international investors that Nigeria is fully open for sincere private sector investment aimed at promoting the injection of the cheap and sorely needed capital that are critical to the rehabilitation and improvement of electricity infrastructure in Nigeria”, the union added.