FG yet to fullfil promise to Discos

FG yet to fullfil promise to Discos – ANED

The Association of Nigerian Electricity Distributors on Tuesday projected that the electricity market revenue would record an N809.8bn shortfall by December.

The Executive Director, Research and Advocacy, ANED, Mr. Sunday Oduntan, who disclosed this at a news conference organised by the association in Lagos, said that the federal government had not fulfilled its commitment to the agreement it signed with the investors during the privatisation of the sector in 2013.

Oduntan said this projected shortfall was based on the non-cost recovery nature of the tariff.

He said that within the last three years that the sector had been privatised, the Discos had been operating at a loss.

He said that due to the delay in the implementation of Multi Year Tariff Order (MYTO ll) covering from December 2013 to February 2016, the Discos recorded a N12.8bn shortfall.

The executive director said that government had not fulfilled its commitment to the agreement it signed with the investors during the privatisation of the sector in 2013.

He explained that the government promised the investors that there would be cost reflective tariffs from its inception as specified under the Performance Agreement.

He said, “This never happened as customers were politically frozen and collection losses removed in 2015.

“Sculpting or under-recovery of cost will result in N164bn revenue shortfall, for the period of 2016 through 2018 and delay in reflecting costs means a growing increase in deficits.

“Government promised an increased access to gas supply, but presently, there is little or no improvement in gas supply due to pipeline vandalism resulting in an average of 50 per cent reduction in generation.

“It also promised that full loses will be recognised in tariffs but presently real loses are higher than what is contained in tariffs due to non-payment of electricity bills by ministries, departments and agencies .

“The generation level which was expected from 2014 to 2016 to be between 5,000 megawatts and 7,000 megawatts, is now between 2,000 megawatts and 3,000 megawatts due to gas pipeline and transmission wheeling constraints.”

He said that despite the many challenges in the sector, Discos had made progress in reducing technical and commercial losses, improved billing system and recruited thousands of skilled personnel.

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