Association of Nigerian Electricity Distributors (ANED) has said that the Federal Government has failed to pay the Distribution Companies (DisCos) the N100 billion subsidy in the privatisation document.
In a statement, Executive Director, Research and Advocacy of ANED, Sunday Oduntan expressed concern over the plan by the Bureau of Public Enterprises (BPE) to restructure five electricity distribution companies (DisCos).
According to ANED, restructuring of the DisCos is inconsistent with all the guidelines and processes necessary to comply with the framework of privatisation agreements and the rule of law.
“We believe that it is reasonable to conclude that the resultant outcome has been an expropriation or backdoor renationalisation of the DisCos by the Federal Government of Nigeria” he said, adding that such a renationalisation or expropriation must be viewed through a historical context as necessary for a proper understanding of the performance challenges that the DisCos have been faced with, since privatisation.
“Fundamentally, the basis of privatisation was flawed from the beginning, due to conditions that were not met by the federal government while expecting the DisCos to meet their performance obligations. Not only were the investors short-changed because of insufficient and unreliable data that was provided by BPE to them during the privatisation process, but the government also committed to and failed to deliver on the DisCos’ debt-free financial books” he said.
ANED also argued that the government failed to pay Ministries, Department and Agencies (MDA) electricity debt which was captured in the privatisation document.
Other commitments which the federal government failed to meet include,
implementation of a cost reflective electricity tariff (this singular unfulfilled condition has led to accrued significant debt and liabilities on the DisCos’ financial books, as they continued to sell electricity below the cost price);
“These commitments have remained largely unmet over the post-privatisation period and have belatedly been partially addressed – too late to rectify current performance challenges.
“While the DisCos are not exonerated from responsibility for performance failures, it would be unrealistic to reach related conclusions without taking into consideration the factors that have been listed previously, as well as the federal government’s contributions to these challenges.
Credit: Daily Sun