Nigeria: As Electricity Discos Throw In The Towel

By Sunday Onyemaechi Eze

Keen observers and genuine opposition to privatisation of the power sector must be giggling with smiles at the recent turn of events. Core investors of Electricity Distribution Companies are beginning to throw in the towel, after five years of privatisation characterised by ineptitude and abysmal performance. This was coming on the heels of government’s determination to wield the big stick and correct the anomaly prevalent in the power sector for ages.

Government’s position has already sent shivers down the spine of stakeholders especially DISCOs known to have persistently violated the rules of engagement. In its bid to blackmail the government to soft-pedal on certain decisions, the Distribution Companies registered the Association of Nigerian Electricity Distributors (ANED).

This new association is a procured vehicle positioned to champion the interests of DISCOs and downplay their obvious incompetency. It opposes and dares government on virtually every decision taken on power which it feels did not favour its pay masters. Since inception, ANED has vigorously launched unwarranted offensives against government agencies especially on the ministry of power which is determined to instill sanity in the power sector. Consequently, there have been raging wars of words and running battles between the minister of power Raji Fashola and ANED for quite some time now. The recurring public spats have rather woken government to its responsibilities and exposed the weaknesses of DISCOs and their penchant for abusing the Electric Power Sector Reform Act.

Having read the handwriting on the wall, DISCOs, affirmed their readiness to quit if their funds were made available to them by the federal government. Alhaji Tukur Modibbo, the Chairman and Chief Executive, Jos Electricity Distribution Company, JEDCO, while speaking at the media parley, agreed to sell the power assets he bought at $82 million five years ago for $72 million. “I paid $82 million to acquire the power assets but I am ready to sell the power assets for $72milion to whoever wants to buy it.” 

The chairman literally begged investors to come forward to buy even with over ten million dollar discount on the original price. While reflecting on the prevailing challenges of DISCOs, John Ayodele, the Chief Operating Officer Ibadan Electricity Distribution Company, said, “the Distribution Companies could not embark on physical due diligence of the privatised power entities before taking over the assets. There was no accurate technical, physical due diligence on what Distribution Companies bought.’’ It would be recalled that the Distribution Companies paid 1.4 billion dollars (about N427 billion) to acquire the distribution assets in 2013.  

According to press report, “the investors who met to state their side of story on the wobbling and declining state of power supply in the country, however, painted a gloomy picture of disaster waiting to hit the nation’s electricity supply system in the nearest future, if certain measures were not taken.”  DISCOs could be likened to over pampered, spoilt brats of the rich fool who even at forty years old expect cookies at the return of every Daddy’s journey. And when the cookies are not forthcoming, the brats chose to raise dust and create unnecessary scene.

The position of the chairman of Jos DISCO reflects the rising frustration of others as well to effectively run an important business dear to the growth and development of our country. It exemplified the near hopelessness, total collapse and dwarfed business initiatives prevalent in DISCOs. Modibbo, who insisted that the minister of power should convene stakeholders’ meeting, said the Distribution Companies had been sidelined in the scheme of things in the power sector. “We have been relegated to the background of the issues affecting the power sector value chain. We want the minister to call us together and ask us why we are not investing in the distribution infrastructure. Blaming the electricity distribution companies alone cannot solve the many of problems in the sector. We have been relegated to the background and that is why we are calling on the minister to meet with us so that we can give our own of the story.” Distribution companies are now private ventures which must contend with the usual vagaries associated with businesses to survive. It is laughable that a business owner would want an official of government to ask him why he is not investing appropriately to boost his business.

It was evident at the point of sale of power assets that the DISCOs were technically incompetent but those in charge still went ahead to sell despite the concerns raised. The dummy sold to Nigerians by government of that era claiming that privatisation was the only solution to the intractable problems of power supply failed flat and has continued to. Those who left the nation in darkness to satisfy their personal business interest will be judged harshly by posterity. How would they feel looking back at the bleak legacy they left behind? Truth no matter how long it is covered will in due time surface despite all odds.  Nigerians will quite agree that stakeholders in the power sector value chain especially DISCOs added little or no value to the existing services. It is common to find many communities groaning in darkness for months as a result of minor repairs of a faulty transformer. 

Responsibilities of the service providers are taken over by these communities who levy themselves to speedy these repairs in order to have power supply. It is frustrating that at the end, DISCOs will still come forward with questionable bills resulting from unavoidable fracas with customers and their staff. In fact, it could be said without any contradiction that the state of power supply is worse now than in pre-privatisation era.

At the moment, Nigerians can no longer be held hostage by those who after due consideration have scored themselves low in technical and financial competencies of modern business. Those who bought the power assets judged the book by its cover. Power sector investment is capital intensive and the return on such investment evidently takes longer time which only government could cope with unlike short term investors. Excellent and efficient power sector service delivery gives the desired impetus to socio economic growth and technological development of nations. Nigeria must embrace this globally acclaimed fact and run with it.  

Government should diligently discharge its responsibilities creditably without compromising existing standard for the benefit of a few powerful elements. It is only by doing it right that government could be brave enough to invoke the appropriate laws against any defaulting stakeholders in the power sector value chain especially DISCOs.

*Sunday Onyemaechi Eze is a Media and Communications Specialist. (sunnyeze02@yahoo.com)