The nation’s power sector crisis deepened weekend
following the mass disconnection of historic debtors by
all the electricity distribution companies, DISCOs to
protest the huge unpaid electricity bills by this class of
consumers.

For now, all historic debtors, including residential,
commercial, Industrial and government establishments
across the three tiers of government would have to find
alternative means of electricity supply until this debt
issue is resolved.

As at last calculation, government establishments,
including the military and security agencies alone owe
the DISCOs some 93 billion. The figure comprises 39.1
billion pre-privatisation of electricity assets and 39.5
post-privatisaBASSEYtion. Also thrown into the debt
calculation is the outstanding interest of 15 billion,
which the Bulk Trader charges DISCOs for late payment
of their electricity bills, a situation that occurred as a
result of non-settlement of electricity bills as at when
due.

Two weeks ago, all the DISCOs took pages in national
newspapers where all historic debtors were given
deadlines within which to pay their debts or have their
electricity supply disconnected.

Sunday Oduntan, Executive Director, Association of
Nigeria Electricity Distributors (ANED) said at the
weekend that his member-companies had to carry out
their threat when it became “obvious that there is
nothing on the table.”

Oduntan further said: “Although we appreciate the efforts
of the Vice President, Professor Yemi Osinbajo and the
Minister of Power, Works and Housing, Barrister
Babatunde Fashola, but the stark reality is that there is
nothing concrete to hold on to. No allowance for MDAs
debt to DISCOs in the budget, even though we started
discussion before the budget was passed. The
indebtedness has become so huge that we are truly
troubled about how the government would resolve this
without a budgetary allocation. ”

Oduntan however made it clear that the current mass
disconnection protest embarked upon by DISCOs is not
an exercise targeted at MDAs, “but all historic debtors.”
He emphasised, “Our position is that this indebtedness
is killing us; it is seriously impacting negatively on the
entire value chain in the power sector equation. Don’t
forget that only 25 per cent of this debt actually belongs
to DISCOs, the rest are for other companies in the value
chain – generating companies, the bulk trader, gas
suppliers etc. So, if you don’t pay and you accumulate
debt, what you are looking at is a possible total collapse
of the entire power sector. That is what we seek to avert
by this action. We need this fund to energise the power
sector; to ensure electricity supply and to grow the
sector.”

Oduntan noted that the operations of all distribution
companies are hampered by huge indebtedness of these
historic debtors. Government establishments,
comprising Ministries, Departments, Military formations,
security agencies, owe each distribution company as
follows;

Abuja DISCO 18.6 billion, Eko DISCO- 8.6 billion, Kaduna
– 8.2 billion, Enugu- 7.2 billion, Ibadan- 6.8 billion, Ikeja-
5.9 billion, Port Harcourt-6.8 billion, Benin-5.8 billion,
Jos-6.5 billion, Yola 2.4 billion and Kano-1.2 billion.

While electricity consumers across the country expect
the distribution companies to provide modern facilities
such as transformers, pre-paid meters etc. and render
world class services, their ability to deliver on these
expectations has been seriously constrained by fund
shortage of funds caused by huge indebtedness and
government’s inability to implement the power tariff
structure which would have made funds available to
them.

Energy analysts contend that unless this funding crisis is
resolved through prompt payment of the huge debts and
the implementation of the new power sector tariff
structure, the nation’s hope of improving power supply
may remain a mirage.

Realising the enormity of the financial challenges the
discoss are facing, the Minister of Power, Babatunde
Fashola, weeks back, called on them to divest 60 per
cent shares in the utilities, in order to access more
liquidity.

This suggestion has however, been roundly rejected by
energy experts, most of who contend that the
privatisation agreement the discos entered into with the
Bureau of Public Enterprises (BPE) was emphatic that no
investor would be allowed to sell beyond 5 per cent of
their shares in the first five years.

What the government should do, according to these
analysts, is to promptly pay the huge debts of the MDAs
so that the disco could access funds for their
operations.

These experts also urged the Federal Government to
pursue its plan to secure 309 billion Bond to finance the
shortfall in the Nigerian Electricity market.

Oduntan agreed with these experts: “One indisputable
fact is that the power sector needs to be well-funded. In
other climes, governments don’t compromise making
such a sector have access the needed funding. In
addition to immediately ensuring that the MDA’s
indebtedness to the sector is settled forthwith, the
Federal Government should also pursue this bond which
is targeted at financing the shortfall in the Nigerian
electricity market.

“It is a major way out of our electricity crisis. It is the
shortest route to industrial growth, as there can’t be
industrial growth without stable power supply,” Oduntan
said.

http://www.financialwatchngr.com/2016/05/16/fresh-power-crisis-discos-pull-plugs-historic-debtors/