Thursday, April 9, 2020
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FG Threatens to Takeover DisCos Over Failed Electricity Distribution

By Mathew Dadiya, Abuja

The Federal Government on Wednesday, threatened to revoke the privatization license of the electricity Distribution Companies (DisCos) following their inability to improve distribution in the country.

The government was furious that despite spending over N1.7 trillion on the companies to enable them stabilize power, they are only able to distribute 3,000mw out of about 13,000 megawatts generated.

Briefing State House correspondents after the weekly Federal Executive Counvil (FEC), presided over by President Muhammadu Buhari, the Minister of Power, Saleh Mamman, disclosed that the ministry has submitted its report to the Council for necessary action.

Mamman noted that while the DisCos were collecting the 3,000mw, they were only paying for 1,000mw.

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

The government cannot continue to subside the companies without commensurate result, he said.
The minister disclosed that he has submitted to the FEC a way out of the situation, but declined to explain what he recommended to the Council hoping that it would approve his plan.

He explained that the DISCOs do not evacuate all of the about 13,000 megawatts generated by the GENCOs, and while 7,000 megawatts out of this is transmitted, the GENCOs manage to eventually pay for only 15 percent of the 3,000 megawatts they are able to distribute.

The implication is technical economic losses as the GENCOs don’t get value for the electricity they generate and the end consumers also do not get adequate electricity despite the output of the GENCOs, the Minister said.
The Minister said: “We presented our achievements right from the day we took 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 train it 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 the several financial interventions the government has made, he said “That is what we are saying, government cannot continue to subsiding because what they doing is that they collect 3,000 megawatts and pay for only 1,000 megawatts, that is 15 percent of what they are collecting.

“So government is the one completing the payment. So 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 that is ready to come and invest. We are asking government to review and see if they are capable fine but if they are not capable they should give way.”

On what becomes the fate of the Discos, Mamman said, “the DisCos are the ones manning the distribution, that is why I have submitted by observations  to the government, it is left for the government  that will have to decide.

“We just have to sit and see whether they are capable, have the technical know how because most of the problems we are having today is the loss- technical loss and commercial loss.

“They will give you light and may not collect your money or they will collect the money and pocket, or they may send light and you may not have good sub-station that may collect this power and distribute to customers. This has been our major problem and it is the responsibility of the DisCos to take care of that end.

Asked what other steps the Federal Government has taken to address the problem, the minister said, “One of the things I will tell you is that government has signed 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, transmission will take the whole 13,000 and will distribute same, that way Nigerians will be happy and everyone will have 24/7 electricity supply.”

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