Mulls reversal of electricity privatisation

File: DISCO official disconnecting lines on electric pole

By Johnbosco Agbakwuru

THE Federal Government said yesterday that Distribution Companies, DISCOs, have failed in supplying adequate electricity to Nigerian consumers.

The government said it would no longer provide intervention funds as a subsidy to the DISCOs and might take drastic actions against the companies which have continued to enjoy subsidy without commensurate result.

Its concern is that the DISCOs have consistently failed to efficiently make use of financial intervention.

The Minister of Power, Saleh Mamman, who stated this while briefing State House correspondents at the end of the Federal Executive Council, FEC, presided over by President Muhammadu Buhari at the Council Chamber, Presidential Villa Abuja, said his Ministry submitted a memo to the council to decide the fate of electricity distribution companies (DISCOs) that have failed to honour their commitments to buy and distribute adequate power generated for them by the generation companies, GENCOs.

Mamman, who was flanked by the Minister of State for Power, Prince Jeddy Agba, said although Nigeria’s current generating capacity was about 13,000 megawatts, about 7,000 megawatts was transmitted.

He explained that the DISCOs do not evacuate all of the 7,000 megawatts generated by the GENCOs, but pay only 15 per cent for the 3,000 megawatts they eventually distribute.

He said the implication was technical and economic losses as the GENCOs don’t get value for the electricity they generate, adding that the end consumers also do not get adequate electricity, despite the output of the GENCOs.

Although he declined to give details of his recommendations to FEC, Hassan stressed that in view of the situation, the DISCOs might have to quit and give way to more capable operators if they were not able to fulfil their obligations as agreed with the government.

The minister said the companies must show they had the capacity to give power to Nigerians or leave so that those who could do it can be engaged.

He said:  “We presented achievements right from the day we took an oath of office to date.  We want to tell Nigerians what we achieved in the value chains. Nigeria can generate up to 13,000 megawatts of electricity but we cannot transmit all.

“So today we presented to the council the solution to the problem of our generation. It is mainly distribution. We can transmit, we can generate 13,000 megawatts, we transmit 7,000 megawatts but can only distribute 3,000.

“There is a lot of work to be done in transmission companies and the government is now willing to take up the matter immediately.”

On what government has resolved to do, he said:  “What I want to say is that most of the problems we are facing in this country that we cannot get electricity supplied adequately and efficiently is because we have a problem in distribution.

“Generation is no more a problem. We can generate up to 13,000 megawatts but the transmission.  Those who are taking the electricity supply can only take 7,000 megawatts, even at that, they are not taking the whole 7,000 megawatts but only 4,500 megawatts and then send to distribution.

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“The distribution, in turn, receives only 3,000 megawatts. Because of technical and commercial reasons, they cannot contain the whole power that has been generated.

“So, we have to correct the infrastructure. That is why I said that today, I submitted my observation to the council and I believe the government is on it. One of the things I will tell you is that the government has signed a memorandum of understanding with the German government, Siemen.

“They are to align between distribution and transmission and also generation so that at the end of the day if we generate 13,000 megawatts, the transmission will take the whole 13,000 and will distribute the same.  That way, Nigerians will be happy and everyone will have 24/7 electricity supply.”

On what will happen to the several financial interventions the government has made, the Minister said: “That is what we are saying, government cannot continue to subsidize because what they are doing is that they collect 3,000 megawatts and pay for only 1,000 megawatts, that is 15 per cent of what they are collecting.

“So, the government is the one completing the payment, we cannot continue like that. So if they are ready to continue, fine but if they are not ready to continue, maybe they should give way to whoever is ready to come and invest.

”So we are asking the government to review and see if they are capable. If they are not capable, they should give way.”

Vanguard