Business

DisCos to disconnect MDAs over N78.6bn debts

The management of the over 11 electricity Distribution Companies (Discos) in Nigeria have set machinery in motion to carry out a nationwide disconnection of major government Ministries, Departments and Agencies (MDAs) over their increasing.

The Executive Director, Research and Advocacy, Association of Nigerian Electricity Distributors (ANED), Sunday Oduntan made this disclosure at the weekend in Abuja while briefing journalists.

According to Oduntan, as at end of April, 2016, MDAs debts stood at N78.6 billion with the military being the highest debtor with a total of N38.7 billion.

A cursory view of the debts profile showed that the Abuja Disco is owed N18.6 billion, Benin Disco N5.8 billion, Eko Disco N8.6 billion, Enugu Disco N7.2 billion, Ibadan Disco N6.8 billion, Ikeja Disco N5. 9 billion, Jos Disco N6.5 billion, Kaduna Disco N8.2 billion, Kano Disco, N1.2 billion, Port Harcourt Disco N6.8 billion and Yola Disco N2.4 billion.

Besides, the major debtors include the Nigerian Airforce with a total of N3 billion, Nigerian Navy N3.2 billion, Nigerian Police N4.6 billion while other paramilitary owe a total of N241 million. Similarly, federal ministries and parastatals owe N9.7 billion, state ministries and parastatals owe a total of N16.2 billion debt.

The ANED boss who stressed that the huge debt profile has made their operations extremely difficult, also explained that contrary to what is believed, the N230 billion Central Bank of Nigeria (CBN) loan to the power firms, have only been accessed by some of them.

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“On the N230 billion CBN intervention loan, the loan had not been released to all Discos, because the CBN itself was not comfortable with the old tariff, they wanted a tariff that can repay the loan and part of the agreement was also that legacy debt owed by the defunct PHCN should be repaid with the loan.”

On the call by the Minister of Power, Works and Housing, Babatunde Fashola, that the Discos should divest their equity shares to raise money for inputs such as meters and transformers in their various franchises, the Discos stated that the call was not feasible as contractual agreements would not allow them to.

The investors pointed out that the agreement at the point of sale of the assets does not allow them to sell more than 5 per cent of their shares in five year, even if they wish to, as it would amount to circumventing legal agreements.

However, the Discos stated that “Since government owns 40 per cent of the shares, government could consider divesting part of its own equity to help raise the needed liquidity in the sector.”

 

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We are an online newspaper, very passionate about Nigerian politics, business and their leaders. We dig deeper, without borders and without fears.
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