Electricity: FG Declares DisCos Have Failed
The Federal Government has declared that Distribution Companies (DisCos) have failed in distributing power across the country.
It declared it would no longer subside the DisCos noting that despite doling out about N1.7 trillion to the companies in three years, they were only able to distribute 3000mw out of about 10,000mw generated.
Minister of Power, Saleh Mamman, said this at the end of the Federal Executive Council (FEC) meeting presided over by President Muhammadu Buhari, yesterday.
Mamman who briefed alongside his colleagues from ministries of Information and Culture, Water Resources, Industry, Trade and Investment explained that while the DisCos were collecting the 3000mw, they were only paying for 1,000mw.
He said the DisCos must show that they have capacity to distribute power or surrender for more competent companies to be engaged.
Mamman said government cannot continue to subside the companies without commensurate result.
The minister further disclosed that he presented the report before council to decide immediately.
Governor of Kaduna State, Nasir el-Rufai, at the end of last month’s National Economic Council meeting disclosed that the Federal Government has spent N1.7 trillion on electricity in the last three years.
The governor who is the head of the ad-hoc committee on power had said: “What we have agreed on is that there are fundamental problems in the electronic supply industry, and that you cannot privatise an industry and then over three years since privatisation, you pump in N1.7 trillion of government into it. That is not privatisation.
“The Federal Government has supported the electricity sector with N1.7 trillion in the last three years and this is not sustainable. So, solutions must be found. Those solutions are not going to be nice. They may be painful, but the only way to solve the structural problems in the industry is to take some very difficult decisions.”
Giving details of what transpired at the Council meeting, Mamman said: “We presented 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 transmit 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 what will become of the DisCos, Mamman said: “The DisCos are the ones manning the distribution, that is why I have submitted my observations to the government, it is left for the government to decide. We just have to sit and see whether they are capable, if they have the technical knowhow 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 money and pocket it, 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.
On how the government will address the debts between DisCos and GenCos, between GenCos and Gas producers, he said: “Well, we have come up with a plan, that issue of willing buyer, willing seller. You know there is ardent capacity of generated electricity that we cannot pick at all. So we are now asking the GenCos…you can imagine we are only paying them 15 percent out of 100 so where do we take the remaining 85 percent?”
Meanwhile, FEC has approved additional N6.9 billion for the completion of the Tada Shonga Irrigation Project.
The project is located in Shonga, Kwara State.
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