…Why Discos were sacked
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…Electricity is costly to produce and must be paid for used wisely
Soni Daniel, Abuja
Nigeria has added at least 4000 megawatts of power to its generation capacity, bringing the total to 22,000 megawatts of its generated power available in the country, the Minister of Power, Eng Abubakar Aliyu, said on Tuesday.
The ministry has also raised transmission capacity with additional 6000 megawatts of power, thereby strengthening the capacity of the transmission company of Nigeria to transmit more power across the country.
The minister said however that despite the increased generation, the TcN and the distribution companies are unable to receive and deliver all the generated power to the homes of Nigerians and that something was urgently being done to improve the situation.
Eng. Aliyu explained that Nigeria was working closely with the German Government to increase generation and supply of power across the country using €2 million loan to raise generation capacity from in three phases.
Under concessionary terms of the loan, according to the minister, Siemens is to implement the rehabilitation of electricity infrastructure from 7000 Megawatts to 11, 000 Megawatts and from there to 25, 000 Megawatts. But he regretted that the distribution companies in the country do not have the capacity to absorb and distribute what the TCN is sending out.
The minister explained that the boards of the distribution companies were sacked due to inability to deliver based on the terms of the agreement they signed with the federal government of Nigeria.
According to him, the boards of the discos have been replaced by the banks that provided the cash for the distribution firms to buy the electricity companies.
The minister said, “If you have been paying keen attention to my speech, it is obvious that you will know the defects but for the benefit of doubt, when I say we have restructured the discos; this is just saying it mildly. Restructuring means that we have sacked the core investors; we have sacked the management and allowed the lender to take over.
“So those who provided the 60 percent borrowed from the banks have taken over 60 percent ownership and we have allowed the bank, the BPE and the CBN to take control. The lenders provided the chairmanship of the discos. The BPE provided the part of the management, the managing directors and then the CBN provided the CFO and the Auditor.
“So this is the position we are now with the six discos namely, Abuja, Kano, Kaduna, Benin, Ibadan and Port Harcourt. One may ask why only six? What about the rest? You know we have 11 of them. Yes, three out of the 11 are performing well. That is two in Lagos and one in Enugu. They are not doing badly. So in a way we have restructured the whole of the 11 discos one way or the other.
The minister said that despite the increase in electricity tariffs, the supply by the discos still remains largely cheaper than diesel power, saying that the high cost of gas and other inputs for power generation, transmission and distribution account for the relative cost of power in the country.
He stated that without consumers paying appropriate tariffs it would not be possible for power providers to render services to Nigerians given the challenges they also go through to make power available to homes in the country.
“This is what it takes and if we do not pay for the electricity as end users, the generators would switch off and if they switch off you will not have electricity because they are businessmen. They would switch off their machines. They have to get returns. The government used to fill up the gap. It used to be N600 billion per annum, the shortfall but which has now come down to N152 billion after some reviews we have done.
“The government may not be able to continue doing that. We have to gradually live up to that. We have to be more careful on how we use electricity and how we are able to manage the electricity in order to reduce the cost by ourselves by using it when it is necessary.
“So this is the situation we are in. If we do not pay they would switch off. This is the situation we are battling every now and then. We do not have control over gas in the ministry of Power. Gas must be paid and even so, the government reduced the cost of gas to power,” the minister stated.