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FG now agrees that Discos failed in key provisions of privatization agreements

Though the federal government had last month shifted the statutory performance evaluation of Discos and Gencos after the initial five years of power privatization to next year, a number of agencies in the sector have come up with facts showing that the companies have failed short of the understandings they sealed with the government.
Three leading agencies in the sector – Nigerian Electricity Regulatory Commission (NERC), Niger Delta Power Holding Company (NDPHC) and Bureau of Public Enterprises (BPE), have unanimously averred that power distributors had defaulted on several agreements since they took over the power assets on November 1, 2013.
Analysts say government agencies may have come up on time with this revelation so as to discourage the federal government in dolling out earlier promised N100bn lifeline for the Discos against their wishes.
It would be re called that during a recent oversight function visit to two Discos in Lagos by the Senate Committee on Power; the companies pressured the lawmakers to worry government in releasing the money.
Besides, as part of opposition to the release of the N100bn, the National Union of Electricity Employees (NUEE) has demanded that investors in the power assets should pack and leave the business if they do not have enough funds to revamp the utilities.
Stronger opposition to the release of the money emerged weekend as the Managing Director, NDPHC, Chiedu Ugbo; Commissioner, Legal Licensing and Compliance, NERC, Dafe Akpeneye; Director, Energy Department, BPE, Yunana Malo; and Deputy President, South, NUEE, Christian Omoneh, wondered why Discos were asking for free money when they have all failed in many aspects of the concession agreements including metering consumers, deep pocket investments and none rejection of loads from Gencos.
In his analogy, Ugbo averred that “On average you can say generation is a huge success. However, because Nigerians don’t have electricity the way they intended if you use generation and distribution, they say it is below expectation. But with generation standing alone, is in my view, a success.
“For the distribution companies, they have performance targets in terms of the ATC&C (Average Technical, Commercial and Collection) loss reduction, in the number of connections they have to do, number of metering they ought to do and some others within this five-year period.”
“Now have they reduced their technical, commercial and collection losses? We all know the answer, because I’ve been doing distribution expansion and rehabilitation work since I took over at the NDPHC but that is what they are supposed to do.
“However, we’ve spent all of our resources doing that for distribution companies which is through government intervention. So I don’t think they’ve met that. Have they done the metering? I think they were supposed to meter about 1.7 million customers, have they done that? These are facts and figures.
“Also, have they done the required expansion work for distribution across the country? Why haven’t they done these things? What does the agreement say? I know they often talk about a cost reflective tariff, but it is not just a figure you pick in the air. There are a number of factors inbuilt in it,” NDPHC boss explained.