Power distribution and generation companies have said the failure of the Federal Government to fulfil its part of the agreements reached during the privatisation of the firms is a major issue affecting the power sector.
The umbrella body for the Discos, the Association of Nigerian Electricity Distributors, said the government had failed to meet four key commitments that were made to the firms.
The Federal Government on November 1, 2013 privatised the successor generation and distribution companies carved out of the now defunct Power Holding Company of Nigeria.
The Chief Executive Officer, Association of Nigerian Electricity Distributors, an umbrella body for the Discos, Mr. Azu Obiaya, stressed the need for all stakeholders including the government to sit together to address the challenges bedeviling the sector.
He said, “There were four key commitments that the government made. The first one was the provision of N100bn in subsidy. The second was the commitment to pay MDA debts; the third was debt-free balance sheet for the Discos, and the fourth was a provision of cost-reflective tariffs.
“Unfortunately, at this time, none of those commitments has been met. The issues have been brought up in different fora and in the stakeholders’ meetings that have been held,” he said.
According to Obiaya, there is need for the parties to come to a table to dialogue and figure out how to address the issues and other broader issues that exist in the sector.
He said, “I am not sure that we are asking for a bailout. What we are requesting is to be able to recover the true costs of doing business. What we are requesting is regulatory certainty and consistency; access to low-interest loans and consistent access to foreign exchange. We believe that if indeed all of these elements come to play, we will be better positioned to meet the requirements of our performance agreements.
According to him, if the revenue shortfalls that exist are paid off and a cost-reflective tariff is put in place, it will allow for liquidity to be injected into the sector and enable the power firms to access commercial loan facilities.
“For us, the Discos, we believe that we are in partnership with all of the stakeholders as well as the government. It is a difficult road to travel but we believe that as long as we all agree to work hand-in-hand, then there is literally light at the end of the tunnel,” Obiaya added.
The Executive Secretary, Association of Power Generation Companies, Dr. Joy Ogaji, described the sanctity of contracts as a major issue, adding that anybody that failed to perform its part should be penalised according to the terms of the contracts.
She told our correspondent that the Federal Government had not completely kept its part of the contracts signed with the private investors.
Ogaji called for a review of the agreements “so that everybody will be called to question”.