Fashola, electricity distribution firms trade blames over poor performance

Babatunde Raji Fashola
Minister of Works, Power and Housing, Babatunde Raji Fashola

The Minister of Power, Works and Housing, Babatunde Fashola, and Electricity Distribution Companies (DISCOs) on Sunday continued to trade blames over the poor performance of the electricity sector.

On Friday, the minister told reporters the Association of Nigerian Electricity Distributors (ANED) was sabotaging the country’s economy by refusing to carry directives aimed at resolving key constraints to sector performance.

Briefing reporters on the status of the country’s power sector, the minister blamed the poor performance of the sector on lapses traced to the DISCOs.

Apart from insufficient meters to customers, the industry is grappling with inadequate power generation and transmission problems.

The minister had directed the Nigerian Electricity Regulatory Commission (NERC), Bureau of Public Enterprises (BPE) and Nigeria Bulk Electricity Trading (NBET), the contracting parties to liaise with the DISCOs to see how they could be resolved.

But, the Executive Director, Research and Advocacy of ANED, Sunday Oduntan, in his reaction dismissed the minister’s directive to the agencies as “political” and incapable of saving the power sector from collapse.

Miffed by the comment, the minister said Mr Oduntan’s reaction not only reflected the mindset of someone who did not have any stake in the industry, but also “revealing of the mindset of a saboteur, not a builder.”

“He (Oduntan) should tell the public whether he is an investor in a DISCO and in which Disco he has invested and what he invested. If ANED is not a licensee, who is ANED? An NGO? If so, they should listen to consumers, because nothing is going on about poor service.

“I do not recognise him, because the law that guides my functions does not recognise him. His statement that no directives from me will save the power sector from collapse is consistent with the views of someone who has no skin in the game,” the minister said.

But, on Sunday the DISCOs again accused the minister of consistently promoting policies that have deepened the confusion in the power sector on metering, power generation, transmission capacities and stranded electricity.

Also, they accused the ministry of infringing on the roles of the various sector players, including the independence of the regulatory agency; disrespecting contracts as well unilaterally redefining privatization laws.

They claimed the DISCOs were losing about N48 per kilowatt hour (KWH) of electricity as a result of the refusal of the Minister to approve the review of tariff since February 2016.

“Through the regulatory and policy actions that have been principally driven by the Minister, the DISCOs have been forced to sell their product at an average retail price of N32/kWh, against more than N80/kWh average that it should be,” the DISCOs said.

ANED said Nigerians were not getting value for taxpayers’ funds, as government was channeling same to fund “misguided projects by REA (Rural Electrification Agency), the Transmission Company of Nigeria (TCN) and “friends”.

The association listed the projects to include the three megawatts (MW) project in Sokoto allegedly constructed at about $5.6 million (about N5.2 billion) per megawatt; and $2.02million (about N4.04bn) per megawatt for two megawatts project in Anambra.

In a free market situation in which the effective price of a product is suppressed to less than its true cost, due to government’s concern about consumer affordability, ANED said the DISCOs would need about N1.3 trillion to address this pricing gap if they must survive.

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