Some core investors in the electricity distribution companies (DisCos) in Nigeria have called for a meeting with the minister of Power, Works and Housing, Mr. Babatunde Fashola to resolve the lingering crisis bedeviling the sector.
Making the call in Abuja yesterday, a director of Jos DisCos, Alhaji Tukor Modibbo, stated that the government need to do more to support the DisCos as their decision to invest in the sector was borne out of patriotism hence they should be encouraged rather than being castigated.
Speaking at a press conference organised by the association of Nigerian electricity distributor (ANED), Modibbo said investors in the power sector are committed to working with government in achieving the objectives of the power sector reform. He however expressed disappointment that the government has failed to adhere to the terms of the performance agreement they signed with the Bureau of Public Enterprises (BPE) on its behalf in 2013.
Answering question on the level of his preparedness to quit the business since it appears not to be profitable, Modibbo who disclosed that they acquired Jos DisCo for $82 million, offered to give government a 10 per cent discount to collect only $72 million and leave within 24 hours.
On his part, Egnr. Abimbola Odubiyi, director, Corporate Services, Abuja Electricity Distribution Company, (AEDC) called on everyone to put heads together to solve the challenges facing the sector instead of throwing blames.
Earlier in his address, ANED’s executive director, Research, Mr. Sunday Oduntan, noted that the fundamental problem facing the sector is tariff gap.
He described tariff gap as the gap between what the government has specified as the price of the electricity that the DisCos as retailers sell the product and the true cost of the product. “It is this gap that has solely contributed to the excess of N1.3 trillion that the DisCos are carrying on their financial books, an impediment to both the sustainability of the electricity market and the ability of the investors to meet the obligations of their Performance Agreement with the government, which should result in the improved metering, customer service, increased customer connections that electricity consumers demand and deserve. This gap remains unaddressed by the government,” he said.
According to him, the DisCo investors, who paid $1.4 billion (N427 billion) for the distribution assets have not made any return on their investment after the five years stressing that it is a condition on which every investor basis of the investment decisions.