The Federal Government has announced its intention to revoke and potentially take over the licenses of Distribution Companies (DISCOS) that are in debt and failing to perform effectively.
This drastic step will be implemented within the next three months, as the Minister of Power, Adebayo Adelabu, revealed in a meeting with the Senate Committee on Power.
During the oversight visit led by Senator Eyinnaya Abaribe, Minister Adelabu highlighted the enduring crises in the power sector, which he noted have persisted for over six decades without a permanent resolution.
He admitted the challenges have “defied known solutions,” yet assured that proactive measures are being taken to address these issues.
Currently, several DISCOS are under the management of various financial institutions due to their inability to service loans effectively.
Notable among them, the Abuja Electricity Distribution Company (AEDC) is managed by the United Bank of Africa (UBA), while both the Benin Electricity Distribution Company and Kaduna Electricity Distribution Company are under the administration of Fidelity Bank.
Additionally, the Ibadan Electricity Distribution Company is managed by the Asset Management Corporation of Nigeria (AMCON).
The Minister emphasized that the federal and state governments, holding a combined 40 percent stake in all DISCOS, will enhance their involvement in the sector’s operations to steer toward improvement and efficiency.
This move by the government aims to ensure that the entities responsible for power distribution across the country are capable of meeting their obligations and enhancing the quality of service to consumers.
The minister called for patience from Nigerians, indicating that while the solutions may be challenging, they are within reach and could lead to significant improvements in the power sector.
He said, “Power drives economic growth and development. No sector can perform without stable power. The power sector is crisis-ridden. We were born into this crisis. These crises have defied any known solutions in the last 60 years. No sector of the economy or part of the country has enjoyed power. We plan to break the jinx.
“We are taking the right steps in the right directions. We only need to endure the reforms we are carrying out. When we are done, people will enjoy it. Our major issue in the power sector is that of liquidity. We are in debt. Customers are not allowed to pay the market value for what they consume.
“The Federal Government owes power companies about N1.3 trillion in subsidy. We owe them $1.3 billion for gas supply. We have only 13,000 installed capacity megawatts of electricity. But as a country, we have never generated more than 5,000 megawatts.
“Distribution Companies are not demanding enough power from Generation Companies. DISCOS still owing commercial banks will be sold off to technical owners. We will also break these DISCOS on a state basis. We have left the sector for too long in the hands of the private sector. We still have 40 percent stakes. We will move in.”
Senator Abaribe, in his remarks, said the Senate will, from next Monday, April 29, 2014, conduct an investigative hearing on the recent electricity tariff hike by the Federal Government, which was rolled out without due consultations.
“We are here on an oversight visit. Pursuant to a resolution of the National Assembly, we have already invited the Minister and other stakeholders of the Ministry over the payment for power by Nigerians.
“I am saying this so that in the course of discussion, nobody will delve into the issue of power tariffs. There is already an ongoing hearing by the National Assembly on that issue. And that will hold on the 29th of April this year,” Abaribe stated.
