Unless the Federal Government intervenes in good time, the power sector may finally grind to a total halt, resulting from inability of the various power generating companies in Nigeria (Gencos) to meet their financial obligations to the Transmission Company of Nigeria (TCN).
Under the privatisation deal, energy generated by the Gencos is transmitted through the various distribution companies (Discos) to the electricity consumers.
But officials of TCN said the Gencos were having unsettled service-delivery bill of about $200 million as at October 15, 2016.
They said the delay in settling the outstanding charges runs contrary to the terms of agreement entered into and which the Bureau of Public Enterprises (BPE) supervised up to the signing ceremony.
Acting Executive Director (Market Operation) in the Independent System Operation (ISO), a business unit of the TCN, Moshood Saleeman, accepted that the cause of delay was liquidity challenge in the sector, but said there had been some loopholes on the part of the indebted firms to comply with rules of engagement, as required by the industry.
Saleeman also condemned non-compliance with various contractual obligations by contracting parties, and warned of the sad consequence that the development may lead to.
He said there could be dire consequences for all players in the industry when there was a known non-compliance with the contractual agreements in some sections of the Act creating the sector.
However, a spokesman of the Gencos, Mr. Peter Odunmiyi, said the inability of government to compel its department, agencies, including military formations and other security organs to pay up their debts to the discos, will continue to pose a challenge to the operators in the power sector.
But an aide to the Minister of Works, Power and Housing, Babtunde Fashola, said government was looking into the issue with a view to averting the perceived danger that the crisis can cause.
By Emma Eke….
RipplesNigeria …without borders, without fears
Latest posts by Ripples Nigeria (see all)
- Zenith Bank posts N208.6bn full year profit, declares N2.50 final dividend - February 21, 2020
- FY2019: C&I Leasing reports N578.6m rise in profit, grows revenue by 29% - February 21, 2020
- CAN says proposed move to rehabilitate Boko Haram suspects is suspicious - February 21, 2020