Power Firms Blame FG for Under-Performance

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Exactly three years after the privatisation of the nation’s power sector, electricity distribution companies have said the failure of the Federal Government to fulfill most of the commitments made to the investors has affected the performance of the sector.

The Association of Nigerian Electricity Distributors, an umbrella body of the Discos, stated this at a press conference in Lagos on Tuesday.

ANED also expressed shock over the call by the President of the Dangote Group, Aliko Dangote, for the reversal of the privatisation of the power assets.

The Executive Director, ANED, Mr. Sunday Oduntan, said the government had promised that there would be cost-reflective tariffs from day one as specified under the performance agreement it signed with the investors.

“This never happened as the R2 customer class was politically frozen and collection losses removed in 2015. Sculpting or under-recovery of cost will result in N164bn revenue shortfall for the period of 2016 through 2018,” he said.

Oduntan added that the tariffs had yet to reflect the devaluation of the naira and the rise in inflation from the assumed nine per cent to the current 17.9 per cent.

He said the government had pledged credit-worthiness support of power purchase agreements by the Nigerian Bulk Electricity Trading Plc, but the “generation companies are owed in excess of N184bn.”

Oduntan said there had been little or no improvement in gas supply, contrary to the government’s promise of increased access to the commodity.

He stated that another commitment was that full losses would be recognised in tariffs, adding that real losses were higher than what was contained in tariffs due to non-payment of debts owed by government Ministries, Department and Agencies; customers’ non-payment and theft of electricity; and non-implementation of minor review.

He said the generation levels expected between 2014 and 2016 were 5,000 megawatts to 7,500MW, but regretted that it had been hovering between 2,000MW and 3,000MW in recent times due to gas pipeline vandalism and transmission wheeling constraints.

Oduntan said the Federal Government had committed to provide subsidy support of N100bn for the power firms, but that nothing had been injected as provided for under the Multi-Year Tariff Order 2.0.

ANED said its attention had been drawn to a number of statements credited to Dangote from a speech he delivered at the Senior Executive Course 38 at the National Institute of Policy and Strategic Studies, Kuru, Plateau State.

Source: Punch

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