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Tag: DISCOS

  • N7.298tr budget: DisCos, contractors, others to smile

    N7.298tr budget: DisCos, contractors, others to smile

    Contractors are to smile in the New Year — if the Federal Government keeps its word to pay them.

    They and others are being owed about N2 trillion, details of which President Muhammadu Buhari said were being compiled .

    The President spoke yesterday at the presentation of a N7.298 trillion budget for the 2017 fiscal year.

    Also to be cleared are outstanding electricity bills owed the troubled Distribution Companies (DisCos).

    The presentation made at a joint session of the National Assembly has Power, Works and Housing receiving the lion’s share of N529 billion.

    Christened “budget of recovery and growth”, its implementation will be based on the economic recovery and growth strategy.

    The government proposed a budget size of N7.298 trillion, which is a nominal 20.4 per cent increase over 2016 estimates.

    Of the expenditure, 30.7 per cent will be capital — in line with the government’s determination to reflate and pull the economy out of recession as quickly as possible.

    President Buhari also said the fiscal plan will result in a deficit of N2.36 trillion for 2017, which is about 2.18% of the GDP.

    The deficit, he said, will be financed mainly by borrowing, which is projected to be about N2.32 trillion.

    He noted that the government’s intention is to source N1.067 trillion or about 46% of the borrowing from external sources; N1.254 trillion will be borrowed from the domestic market.

    On expenditure estimates, Buhari said the proposed aggregate expenditure of N7.298 trillion will comprise: statutory transfers of N419.02 billion; debt service of N1.66 trillion; sinking fund of N177.46 billion to retire certain maturing bonds; non-debt recurrent expenditure of N2.98 trillion; and Capital expenditure of N2.24 trillion (including capital in statutory transfers).

    The President added that on statutory transfers, the government increased the budgetary allocation to the Judiciary from N70 billion to N100 billion.

    The increase in funding, he said, is meant to enhance the independence of the judiciary and enable it perform effectively.

    Buhari said that the plan, which builds on the 2016 Budget, provides a clear roadmap of policy actions and steps designed to bring the economy out of recession and to a path of steady growth and prosperity.

    The President noted that as the country continues to face the most challenging economic situation in its history, nearly every home and nearly every business is affected one way or the other.

    The President said that in 2017, the government will focus on the rapid development of infrastructure, especially rail, roads and power.

    He added that efforts to fast-track the modernisation of the railway system would take priority.

    According to him, in 2016, the government made much progress getting the studies updated and financing arrangements completed.

    He noted that in 2016, the government conducted a critical assessment of the power sector value chain, which is experiencing major funding issues.

    He said that although the government, through the Central Bank of Nigeria (CBN) and other Development Finance Institutions, had intervened, it was clear that more capital was needed.

    He said the government must also resolve liquidity in the sector, adding that it made provisions in the new budget to clear its outstanding electricity bills.

    One issue that the Federal Government is committed to dealing with frontally, he said, is its indebtedness to contractors and other third parties.

    He said the government was at an advanced stage of collating and verifying these obligations, some of which go back 10 years,  and  estimated at about N2 trillion.

    The President said the government would continue to prioritise defence, spending “till all our enemies, within and outside, are subdued”.

    Buhari said they restricted travel costs, reduced board members’ sitting allowances, converted forfeited properties to Government offices to save on rent and eliminated thousands of ghost workers.

    “These and many other cost reduction measures will lead to savings of close to N180 billion per annum to be applied to critical areas, including health, security and education,” he said.

    He explained that the effort to diversify the economy and create jobs would continue with emphasis on agriculture, manufacturing, solid minerals and services.

    Buhari noted that non-oil revenues, largely comprising Companies Income Tax, Value Added Tax, Customs and Excise duties, and Federation Account levies are estimated to contribute N1.373 trillion.

    He said the government set a more realistic projection of N807.57 billion for Independent Revenues, “while we have projected receipts of N565.1 billion from various recoveries”. Other revenue sources, including mining, amount to N210.9 billion.

    Buhari said the 2017 budget was based on a benchmark crude oil price of $42.5 per barrel; an oil production estimate of 2.2 million barrels per day; and an average exchange rate of N305 to the US dollar.

    On this year’s budget’s performance, the President said: “In 2016, the budget was prepared on the principles of zero based budgeting to ensure our resources were prudently managed and utilised solely for the public good.”

    The President proposed expenditure on key capital spending provisions in the Budget to include Power, Works and Housing: N529 billion; Transportation: N262 billion; Special Intervention Programmes: N150 billion. Defence: N140 billion; Water Resources: N85 billion; Industry, Trade and Investment: N81 billion; Interior: N63 billion; Education N50 billion; Universal Basic Education Commission: N92 billion Health: N51 billion Federal Capital Territory: N37 billion;

    Niger Delta Ministry: N33 billion; and Niger Delta Development Commission: N61 billion.

    Buhari said N100 billion had been provided in the Special Intervention programme as seed money into the N1 trillion Family Homes Fund that will underpin a new social housing programme.

    “This substantial expenditure is expected to stimulate construction activity throughout the country,” he said

    He added that efforts to fast-track the modernisation of “our railway system will receive further boost through the allocation of N213.14 billion as counterpart funding for the Lagos-Kano, Calabar-Lagos, Ajaokuta-Itakpe-Warri  and Kaduna-Abuja railway projects. As I mentioned earlier, in 2016, we invested a lot of time ensuring the paper work is done properly while negotiating the best deal for Nigeria. I must admit this took longer than expected but I am optimistic that these projects will commence in 2017 for all to see.”

    President Buhari noted that given the emphasis placed on industrialisation and supporting SMEs, N50 billion had been set aside as Federal Government’s contribution for the expansion of existing, as well as the development of new, Export Processing and Special Economic Zones.

  • DisCos, manufacturers quarrel over meters

    Power distribution companies (DisCos) and indigenous manufacturers of meters are trading words over the  quality and quantity of meters produced.

    Some officials of Ikeja Electric (IE), Eko Electricity Distribution Companies (EKEDC) and Abuja Electricity Distribution Company (AEDC), who spoke to The Nation at a stakeholders’ forum, said the DisCos were not patronising local meters manufacturers because their products were of poor quality.

    The officials, who pleaded not to be mentioned, said meters imported from Europe and Asia were of better quality, adding that every organisation wants the best.

    Ikeja Electric Acting Chief Executive Officer Mr Anthony Youdewei said only a few meters were produced in the country.

    He said none of the firms approved by the Federal Government to manufacture meters could supply the needs of the market.

    He said: “After a thorough appraisal of the situation in the  electricity sector, we, at (Ikeja Electric), have realised that local manufactuters of meters are incapable of meeting the needs of power distribution firms. Though the companies are still producing meters, they supply smaller quantities to the market.’’

    He added that none of the meter companies has over 50,000 meters in stock.

    “If you visit the meter factories, you would see that none of them have 50,000 meters in stock. What they do is that they import materials, couple and sell them. The demand for meters, by DisCos, is huge, because they have millions of cusomters in their records,’’ he added.

    Electricity Meters Manufacturers Association of Nigeria(EMMAN) Secretary Mr Muhideen Ibrahim,  denied the allegations.

    He said the group comprised  five manufacturers, adding that each could supply at least 100,000 meters to the market.

    On quality, Ibrahim said DisCos, which bought meters from local manufactuters have never complained of poor quality.

    MEMCOL Nigeria Limited Managing Director Mr Kola Balogun also denied the allegation of lower production of meters, adding that a local manufacturer could produce over 100,000 meters, depending on demand.

    Balogun, whose firm manufactures meters, said MEMCOL has over 200,000 meters in stock, adding that the company produces pre-paid meters and smart meters.

    He said the meters were patronised by Ibadan, Abuja and Port Harcourt DisCos, because they meet international standards.

    ‘’Are we to talk of voltage? Are we to talk of smart technologies, which enable owners to have updates on the working of his/her meter, not minding the distance?’’ he asked.

  • DisCos ‘probing corrupt officials’

    DisCos ‘probing corrupt officials’

    Electricity distribution companies (DisCos) are investigating their employees  suspected to be corrupt, The Nation has learnt.

    The exercise will help in checking workers who extort money from consumers before attending to their electricity needs. It will also fish out those who collect bribes under the pretext of providing meters, transformers, poles, cables and other equipment to customers. Those who connive with consumers to by-pass meters and tamper with their meters, among other untoward practices, will also be flushed out of the system.

    Any official found guilty will be sanctioned.

    The DisCos have been urging customers to provide information on workers who demand bribe from them.

    An official of Ikeja Electric (IE), who pleaded not to be named, said the DisCos were requesting for coded information to shield their customers from attacks.

    Executive Director of Research and Advocacy of the Association of Nigerian Electricity Distributors (ANED), Mr Sunday Oduntan,  told The Nation that the power firms were battling corruption. Besides, he said they were meeting the Ministers of Power,  Finance, Senate Committee on Power and its counterpart in the House of Representatives on how to recover N100 billion debt.

    He said the sack of corrupt officials would enhance their operations.

    According to him, the 11 DisCos were relying on ANED to deal with corruption.

    Oduntan said: “Members of the team have been travelling from one part of the country to another to investigate officials with questionable conducts. They were  in Abuja in August, and were planning to go to Bauchi, Gombe, Jos, Yola and other areas in the North on issues that border on corruption this December.

    ‘’Besides, the association and the power companies are relying on members of the public to furnish them with information that would help them in detecting corrupt officials in the sector.’

    “ANED and the DisCos are not trying to blackmail customers; they are helping to sanitise the industry. Bribery revolves round two sets of people – the giver and taker of bribe. The body is adopting an all inclusive approach to solve problems such as corruption, illiquidity, poor power supply, estimated billings, metering, and others in the industry,” he said.

    Oduntan said corruption was widespread in the sector, because people did not follow due process. He stressed that the average consumer of electricity offers bribe to DisCos’officials for services they had paid for.

    IE’s Acting Chief Executive Officer Mr Anthony Youdeowei said the firm would deal with workers found guilty of criminalities.

    Youdeowei, who spoke to The Nation, on the sideline of a stakeholders’ forum in Lagos, said the IE would sack workers with  questionabe characters.

    He said the stealing of cables and other equipment was affecting the firm’s  operation.

  • Fashola to DisCos: stop blackmailing Federal Govt

    Fashola to DisCos: stop blackmailing Federal Govt

    The Minister of Power, Works and Housing, Babatunde Fashola yesterday warned electricity distribution companies (DisCos) to stop blackmailing the Federal Government. He advised them to prove how much Ministries, Departments and Agencies  (MDAs) are owing each of them.

    Responding to the newspaper advertorials that the DisCos have been running under its umbrella body,  Association of Nigerian Electricity Distributors (ANED), he said the group  was being economical with the truth.

    He accused ANED of failing to tell Nigerians that each of the DisCos has not presented the alleged debt profile to the Federal Government.

    He spoke at the monthly power sector meeting in Ikot Ekpene, Akwa Ibom State.

    Fashola insisted that debts are paid by quantification but not by estimation.

    He reminded them that the privatisation exercise that handed over the assets to the power companies was between the government and each separate DisCos and not through an association.

  • Why irregular power supply’ll persist, by DisCos

    Why irregular power supply’ll persist, by DisCos

    Hope of getting improved power supply will remain  a mirage for as long as the sector continues to battle liquidity gap of N809 billion and other problems, electricity distribution companies (DisCos), have said.

    Its umbrella body, the Association of Nigerian Electricity Distributors (ANED),  lamented that the sector is  confronted with problems, such as poor electricity generation and distribution, obsolete equipment, liquidity and others, arguing that stable power is difficult in Nigeria, as long as the problems persist.

    ANED spokesman, Mr Sunday Oduntan, who spoke at the World Economic Summit in Lagos with Addressing unemployment crisis in Nigeria as its theme, Oduntan said: “Getting stable power supply would continue to be a problem in Nigeria, as long as the country continues to grapple with the problems. The unemployment situation has worsened, because operators in the formal and informal sectors, do not have light to work with.

    “Productivity is poor in every sphere of the economy, because there is no regular supply of power. The Federal Government is unable to boost the economy, because power and other infrastructures are not in place.”

    The forum, organised by the WorldStage Group, brought stakeholders from  the public and private sectors.

    He said the sector would improve on its performance once the liquidity problem was addressed and stakeholders in the value chain got enough funds for their operations.

    He said sectors depend on one another for growth, adding a growth in one sector will lead to a corresponding growth in another.

    “What I’ m saying is that once the power sector records a major growth, via improved supply, there would be a spilled over effects of that growth on the economy. When economic activities improve, following an improvement in power supply, the better for Nigeria,’’ he added.

  • Debts: DisCos warn of nationwide blackout

    Electricity distribution companies (DisCos) yesterday warned that total darkness was imminent across the country as the huge debt burden owed the power firms takes toll on their operations.

    The burden of distribution, according to the companies, has become unbearable due to the refusal of electricity consumers to pay their bills.

    Electricity consumers across the country are owing electricity distribution companies over N100billion.

    The Executive Director, Advocacy and Research,  Association of Nigeria Electricity Distributors (ANED), Mr. Sunday Oduntan who spoke during a customer consultative forum in Jos, Plateau State capital accused the Nigerian Army of leading the debtors’ lists.

    Some of the customers from Jebu Bassa, the host community of the Third Armored Division, had challenged the DisCos to explain the rationale behind constant electricity supply to the military barracks and the lack of it at their community.

    “We tend to wonder why we the host community don’t have light, but our tenants in the barracks have constant light and we were told that soldiers in the barracks don’t even pay light bill, is it that the companies are afraid of them to cut their supplies as you do to other consumers?

    Responding,  Mr. Oduntan said: “Almost all the military barracks in Nigeria, not only that of Third Division, do not pay electricity bill and that is the major challenge before the DisCos.

    “Military barracks across the country are owing us over N800 billion; they are the leading debtors to the the DisCos.

    “We have put the total debt owed us by all categories of consumers across the country, and out of that debt, the military alone is owing over N800billion.

    “It is not that we are afraid of cutting supply to the barracks, but for security reasons, we cannot cut electricity supply to the barracks. Part of the reason is because, the armouries are being maintained by electricity, to the extent that if there is no supply for a day, the armoury may explode and its explosion can endanger the lives of military and civilian population around the barracks.

    “But then, the inability of concerned government agencies to pay up this debt may eventually force the DisCos out of business and there would be total blackout across the country.

    “This is imminent because at the moment, we are heavily indebted to banks and electricity generating companies (GenCos) as well as those who supply gas and diesel to us. No bank will give us credit facilities to continue to distribute electricity because we have been unable to pay for our loans.”

  • DisCos reject call for reversal of privatisation

    DisCos reject call for reversal of privatisation

    The Association of Nigerian Electricity Distributors (ANED) has rejected the call for the reversal of  power sector privatisation.

    Billionaire businessman, Aliko Dangote, had made the call while speaking at the Senior Executive Course 38 of the National Institute of Policy and Strategic Studies (NIPSS), Kuru, near Jos, Plateau State.

    Dangote said some of the people who bought power assets do not have an understanding of what they bought.

    He advised the government to negotiate with them and find solutions to the problems confronting the sector.

    “We should be as open as we can if government doesn’t intervene by taking back these assets and giving them to people who really have money that they can really inject, we will not be able to deliver on power,” he had said.

    But the distribution companies (DisCos)  said they have been doing their best, and that there can be no “overnight” solution to a sector that had been mismanaged for over 63 years.

    “Anyone who has followed the privatisation of the Nigerian Electricity Supply Industry (NESI) would recognise that the sector has been bedevilled by a number of challenges that would make the most hardened risk-seeking investor to run in the opposite direction,” ANED said.

  • NERC fines Benin, Port Harcourt DisCos N6.2m

    NERC fines Benin, Port Harcourt DisCos N6.2m

    The Nigerian Electricity Regulatory Commission (NERC) has fined Benin and Port Harcourt electricity distribution companies (DisCos) N6.220 million over their failure to comply with the decisions of Forum Offices rulings in complaints filed by their customers.

    The Commission in Directive 153 imposed a N5, 010, 000. 00 sanction on Benin Electricity Distribution Company (BEDC) for not complying with the decision of the Forum in complaints filed by Messrs Ikponmwosa Ogiesoba Barry; S. C. Ogoke; and F. E. Ubuane.

    The Commission in a statement yesterday, said the Forum Office is made up of five members of the public and handles complaints that are unresolved at the customer complaint unit of DisCos.

    Both Barry and Ubuane had filed complaints before the Benin Forum Office alleging fraudulent estimation of their electricity bills to which the Forum Office ruled in their favour, while Ogoke in his complaint contested the amount of fixed charge he was to pay the utility company.

    However, Benin DisCo ignored the directives of the Forum Office in those instances and the matter was subsequently referred to the Commission which issued Directives 153 upon completion of enforcement proceedings.

    According to Directive 153, “The Commission hereby fines BEDC N10,000 per day from April 14, 2016 to September 28, 2016 making a total N1, 670, 000 only” in each of the three instances bringing the fines to a grand total of N5, 010, 000 only.

    The Port Harcourt Electricity Distribution Company (PHEDC) in Directive 155 was sanctioned over its failure to comply with the Port Harcourt Forum Office decision in a complaint filed by one Toba Aremu Olugbemi.

  • Ex-Egbin Power chief: MDAs, others owe DisCos N80b

    Ministries, Departments and Agencies (MDAs) and the military owe the electricity power distribution companies (DisCos) over N80billion, the former Managing Director, Egbin Power Plc, Michael Uzoigwe, has said.

    Uzoigwe, who is Group Leader, Generation, Sahara Group, said the Army, Navy and Airforce are the major debtors.

    He urged the DisCos to collect their money to stay in business, adding that failure of the firms to recover the debts would further affect their operations.

    Uzoigwe, who delivered a paper entitled: ‘The present state of the privatised electricity business in Nigeria’ at the On-Grid Energy Summit organised by the International Finance Corporation (IFC) in Lagos, said electricity generation and distribution is a serious business and that no firm is ready to run its business at a loss.

    According to him, the federal agencies and ministries that were owing the firms needed not complain of power failure, arguing that it was not normal for the DisCos to provide electricity to customers, who pay their bills promptly.

    Uzoigwe said military and police maltreat officials of power firms on debt-recovery duties, which he described as unfortunate.

    He said: “The Ministries, Departments and Agencies owe the DisCos N80billion in form of bills and other charges. Anywhere I can say N80billion is being owed the energy distribution companies by the government agencies and others and I ‘m ready to defend it. Whenever we send our boys to recover debts owed the DisCos, the debtors use police to maltreat them. They lock the boys up.

    “As a distributor, what business do I have supplying power to Army or Navy barracks that refused to pay their bills? Such debtors need not complain if they are denied electricity supply. As a matter of fact, it does not make economic sense to continue to serve debtors that appear unrepentant.

    “The power distribution companies have kilowatts of electricity they supply a given area or location within a period. If a DisCos supplies, for example, Surulere 70 kilowatts of power out of 100 kilowatts budgeted for the area in a month and the residents pay for the 70 kilowatts. What is going to happen to the remaining 30 kilowatts? The firm cannot return the remaining 30 kilowatts. But it is a good decision if the DisCos supply an industrial layout that do not only consume the 100 kilowatts, but pay for the power.’’

    Uzoigwe likened the problems in the sector to a recurrent decimal, which comes up always, stressing that what people see outside the power industry is not the true picture of the happenings inside it.

    He explained that many of the critical problems plaguing the sector were hidden, because they are not known to many Nigerians.

    Uzoigwe accused Nigerians of playing what he described as a ‘blaming game’, arguing that they apportion blames wrongly.

    He said lack of practical experience about the power industry, on the part of some government officials, especially politicians, is the bane of the industry, arguing that  only theorists were appointed to head critical units.

    He urged Nigerians to report any act of vandalism to the police and other security agencies, noting that everybody has a role to play, if the sector would grow to a level where there would be energy sufficiency.

    He said failure of people to report cases such as destruction  of transformers,  cables,  poles, meters and others, they are adding more to the problems in the sector.

    He said bypassing of meters is a serious offence, adding that such  cases abound in Lagos  and other states in the country.

  • DisCos lose N1b monthly to limited transmission capacity

    • ‘TCN’s expansion plan’ll fail’

    Electricity Distribution Companies (DisCos) are losing N1billion monthly as a result of the limited   capacity of the Transmission Company of Nigeria (TCN) to wheel power to them,  especially in the North.

    Association of Nigerian Electricity Distributors (ANED) Executive Director, Research & Advocacy, Sunday Olurotimi Oduntan, said in a statement that  the situation was worsened byTCN’s inability to meet its financial obligations, thereby compromising the DisCos’ ability to meet their obligations to the Market Operator.

    He said yesterday: “DisCos are currently experiencing a monthly loss in excess of N1 billion due to limited transmission capacities in various areas of the country, especially the northern part.”  He described the TCN as “the weakest link of the old National Electric Power Authority,”

    TCN had in a press briefing identified the DisCos as the weakest link in the power sector, stressing that the companies were rejecting load allocations.

    But ANED said unless the TCN is properly funded, its capacity will remain weak.

    ANED expressed doubts over the ability of TCN to accomplish its  22 expansion projects because it was uncertain if the Federal Government will fund the plan.

    Countering the TCN’s wheeling capacity claim, the statement noted that “to date, the maximum wheeling capacity reached by TCN has been 5,074.7 Mw (attained February 2nd, 2016) versus its claims of increased capacity from 5,500 Mw to 6,000 Mw, wholly untested and unproven.”

    “It is unfortunate that the new management of TCN, with the departure of Manitoba Hydro MHI, rather than reach out, in partnership, to work with the other stakeholders of the sector, is more interested in pointing fingers and playing the blame game.

    “No matter how TCN wants to play it, whether it is scheduling an ill-advised and non-informative press conference or seeking to colour the reality of transmission shortcomings, transmission remains the weakest link in the power value chain.

    “However, it is important that the public be truly knowledgeable about the limitations in the value chain that precludes their ability to receive the consistent power supply that they have a right to expect,” ANED said, adding that given that this is the fourth quarter of the year, it is not clear that TCN has received, nor will it receive, any funding that comes close to enabling it complete the indicated projects – a continued legacy of limited and poor funding of a vital aspect of power infrastructure.