Power failure: FG ‘may scrap DisCos, deplore new plans if…’




The federal government has said it would not continue to subsidise the nation’s power sector.

To this end, it called on Distribution Companies (DisCos) in the country to improve on their financial and technical capacity to deliver or the government would directly move in for a lasting solution to the nation’s epileptic power supply.

It expressed worry that despite the N1.7 trillion intervention provided for them by the federal government in three years, they still could not distribute the 10,000mw generated.

Minister of Power Saleh Maman said this Wednesday after the Federal Executive Council meeting, presided by President Muhammadu Buhari, in Abuja.

He said a plan targeted at resolving the challenges faced by the sector, had been submitted to the government.

“Government will not continue to subside the sector. If they (DisCos) are not ready, they should tell us. We have a plan on willing seller, willing buyer,” he said.

The minister further said government was in talks with a German firm, Siemens, to be part of solutions it was seeking to address the challenges.

Providing some insight into some of the challenges, Maman said the nation had the capacity to generate 13,000 megawatts and could transmit 7,000MW.

He however put the blame at the DisCos’ doorstep, saying they had the capacity to take between 3,000MW to 4,000MW only.

Above all, the minister said the distribution companies would take the 3,000MW and pay for only 1,000MW, a development that’s indicative of lack of financial capacity.

He said: “We presented achievements right from the day we took oath of office to date.

“We want to tell Nigerians what we achieved in the value chains. Nigeria can generate up to 13,000 megawatts of electricity but we cannot transmit all.

“So today, we presented to the council the solution to the problem of our generation. It is mainly distribution. We can transmit, we can generate 13,000 megawatts, we transmit 7,000 megawatts but can only distribute 3,000.

“There is a lot of work to be done in transmission companies and the government is now willing to take up the matter immediately.”

Asked what exactly the council revolved to do, the minister said: “What I want to say is that most of the problem we are facing in this country that we cannot get electricity supplied adequately and efficiently is because we have a problem in distribution. Generation, no more problem. We can generate up to 13,006 megawatts but the transmission, those who are taking the electricity supply can only take 7,000 megawatts, even at that they are not taking the whole 7,000 megawatts but only 4,500 megawatts and then send to distribution, the distribution in turn receives only 3,000 megawatts. Because of the technical and commercial reasons, they cannot contain the whole power that has been generated.

“So, we have to correct the infrastructure. That is why I said that today, I submitted my observation to council and I believe the government is on it. 

“One of the things I will tell you is that government has signed memorandum of understanding with the German government, Siemens. They are to align between distribution and transmission and also generation.

“So that at the end of the day if we generate 13,000 megawatts, transmission will take the whole 13,000 and will distribute same, that way Nigerians will be happy and everyone will have 24/7 electricity supply,” the minister further clarified.

On what wouldl become of the DisCos, the minister said: “The DisCos are the ones manning the distribution that is why I have submitted my observations to the government; it is left for the government that will have to decide.

“We just have to sit and see whether they are capable, if they have the technical knowhow because most of the problems we are having today is the loss- technical loss and commercial loss.

“They will give you light and may not collect your money or they will collect the money and pocket it, or they may send light and you may not have good sub-station that may collect this power and distribute to customers. This has been our major problem and it is the responsibility of the DisCos to take care of that end.”

On what will now happen to the several financial interventions the government has made, Mamman said: “That is what we are saying, government cannot continue subsiding because what they doing is that they collect 3,000 megawatts and pay for only 1,000 megawatts that is 15 percent of what they are collecting, so government is the one completing the payment. So we cannot continue like that. So if they are ready to continue, fine but if they are not ready to continue maybe they should give way to whoever that is ready to come and invest. So we are asking government to review and see if they are capable fine but if they are not capable they should give way.”

On how the government would address the debts between DisCos and GenCos, between GenCos and gas producers, the minister said: “Well, we have come up with a plan, that issue of willing buyer, willing seller. You know there is ardent capacity of generated electricity that we cannot pick at all.

“We are now asking the GenCos…you can imagine we are only paying them 15 percent out of 100 so where do we take the remaining 85 percent? Even if embet is collecting 100 percent, gas alone is taking 60 percent; only 15 percent is used for their overheads.

“If they cannot week outside the agreement with the embet you can see how they are struggling to get their money back. Embet buys electricity from DisCos, supplies to GenCos and collect money from DisCos and pay the GenCos, that is why we have the gaps and that is why we have to do something to correct these gaps. It is now government’s decision.”

Meanwhile, the FEC has approved additional N6.9 billion for the completion of Tada Shonga Irrigation Project.

The project is located in Shonga, Kwara state.

Minister of Water Resources Suleiman Adamu, who disclosed this, said the additional approval brought the total project cost to N10.18 billion. 

The minister said the project was first awarded in 2010 but was later abandoned due to lack of funding. 

He said the decision to do augmentation and variation on the project and complete was in line with the President Muhammadu Buhari-led administration’s stance to complete viable projects previously awarded.

He said the variation increased the size of the project from 1,500 hectares to 2,300 hectares of irrigation.

“For that purpose, we sought for the augmentation and variation in the sum of N6.9 billion, raising the project from the original sum of N3.26 billion to N10.18 billion, with the completion period of 36 months,” he said

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