MDAs’ N93b unpaid debt threatens power sector reforms

Non-tariff increase to take 10,000 jobs, bring back fixed charges
The ability of the Power Distribution Companies (DISCOs) to supply the total installed capacity of 11,165.40 Mega Watts (MW) to consumers is being threatened by the refusal of Nigerian Ministries, Departments and Agencies (MDAs) to offset cumulated bills of over N93 billion.

Besides, the annulment of increment in electricity tariff by the Federal High Court has been described as an action that would cost 10,000 jobs, discourage investment and the return of fixed charges in the country.

Meanwhile, the Association of Nigerian Electricity Distributors (ANED) has appealed against the judgment of the Federal High Court annulling the 45 per cent electricity tariff hike.

The total amount of debt owed power distribution companies by ministries, departments and agencies at both the federal, state and local government levels was about N58 billion in December and increased to N60 billion before moving to the present level.

The Guardian gathered that a large part of this debt is owed by the military that takes pleasure in beating up DISCOs staff should there be any attempt to disconnect their electricity.

Specifically, the breakdown of debt own by government establishments, comprising ministries, departments, military formations, and security agencies to each distribution company include Abuja DISCO, ₦18.6 billion; Eko DISCO, ₦8.6 billion; Kaduna, ₦8.2 billion; Enugu- ₦7.2 billion; Ibadan- ₦6.8 billion; Ikeja, ₦5.9 billion; Port Harcourt, ₦6.8 billion; Benin-₦5.8 billion; Jos-₦6.5 billion; Yola, ₦2.4 billion; and Kano, ₦1.2 billion.

Already, Eko Electricity Distribution Plc, (EKEDP) has written to the Military requesting for payment of outstanding debt.A copy of the letter obtained by The Guardian yesterday, stated: “As you are aware, the National Council on Privatisation handed over the successor companies (Eko Electricity Distribution Plc inclusive) to the various core investors.

“As such, EKEDP is now a privately owned organization and we need to ensure that the revenue generated from the electricity distributed to customers are duly collected. Such revenue will in turn be used to enhance the network by changing the obsolete electrical equipment amongst other issues. This will invariably lead to the smooth distribution of electricity to all our customers and alleviate the current dismal power situation in the country.

“Kindly note that we are happy to discuss any issues you may have regarding the outstanding debt and/or electricity bill so as to ensure prompt resolution/reconciliation where necessary.”

Chief Executive Officer of EKEDP, Oladele Amoda, noted that the military formations and their officers within its licence area were the highest debtors.He added that about 60 percent of the debt was owed by the Army, while about 30 and 10 percent of the debt profiles were owed by the Navy and Air Force respectively.

Amoda said that the company has concluded plans to install bulk-prepaid meters in all military and other security agencies’ barracks within its operational territory.

This, it believed would totally eliminate every form of controversy regarding the accuracy of electricity bills in the barracks.Speaking on the tariff issue, Amoda stated: “On the court order for tariff reversal, we have gone to court to lodge an appeal. Preventing the tariff increase is going to discourage investors and about 10, 000 people may lose their jobs if the judgment is allowed to stand.

“If we have to maintain status quo, we have to bring back fixed charges, which has been eliminated long time ago”.Amoda said the present tariff structure is unable to cover the DISCOs operating cost, as the companies have not been making profit.