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DisCos flay TCN’s N72 billion investment in networks

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Electricity distribution companies (DisCos) have frowned at a N72 billion investment by the Transmission Company of Nigeria (TCN) in the networks without recourse to the managers.

In a statement yesterday, the Association of Nigerian Electricity Distributors (ANED) expressed fear that customers may bear the cost of the alleged unsolicited and wrongly directed investment. According to them, the government-run TCN has no capacity to invest in a private companies-led power network.

“To ensure that electricity customers do not unduly bear the cost of inefficiencies, procurement is required to be implemented efficiently and on a ‘best-value’ basis,” ANED noted.

The Managing Director of TCN, Mr. Usman Gur Mohammed, recently said the company was no longer the weakest link in the power sector value chain and that the Federal Government had directed it to invest N72billion in the DisCos’ network to improve power distribution.

But the DisCos said it was the obligation and business of the investor to access debt financing for any such investments, freeing government funds for other urgent social investments.

“Given the heavily regulated nature of the distribution sub-sector and that this planned expenditure falls outside of the legal/regulatory requirement that capital investment must be recovered through the tariff, failure to adhere to this requirement will cause a problem of lack of recovery of the N72 billion,” the association said.

According to them, the initiative creates the potential for a return to the old days of the government trying to implement projects that it is not suited for.

The DisCos said rather than government intervening in reducing the N1.3 trillion market shortfalls in the power sector, the N72billion TCN investment directed at evacuating a non-existing 2,000 megawatts (MW) would further raise the debt profile.

“We believe that the money should be directed towards filling the tariff gap, providing the commercial framework that will ensure that Nigerian electricity customers receive the benefits of increased and stable power,” the DisCos said.


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