Discos to Disconnect MDAs, Military over N93bn Debt

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Sunday Oduntan

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Electricity distributions companies are to start mass disconnection of their major debtors including the military, ministries and agencies of the federal government

By Anayo Ezugwu  |  May 23, 2016 @ 01:00 GMT  |

ELECTRICITY distribution companies, Discos, will soon have a showdown with their major debtors as they get set to disconnect their electricity supply in the days ahead. The Discos said for months, they had been groaning under severe liquidity constraints because of unpaid electricity bills from residential, commercial and industrial consumers as well as the ministries, departments and agencies of the three tiers of government.

The Discos, which put the total debt at N93 billion, also accused the military and security agencies of failing to pay up their bills.

Sunday Oduntan, executive director, Association of Nigerian Electricity Distributors, ANED, said as of April ending, the total debt of the MDAs, military and security agencies stood at approximately N93 billion. This, he said, was made up of N39.1 billion pre-privatisation and N39.5 billion post-privatisation as well as the outstanding interest of N15 billion, which the bulk trader charges Discos for late payment of their energy bills arising from non-settlement by consumers.

A breakdown of the sum, according to Oduntan, shows that Abuja Disco is owed N18.6 billion, Eko Disco, N8.6 billion; Kaduna Disco, 8.2 billion; Enugu Disco, N7.2 billion; Ibadan Disco, N6.8 billion; Ikeja Disco, N5.9 billion; Port Harcourt Disco, N6.8 billion; Benin Disco, N5.8 billion; Jos Disco, N6.5 billion; Yola Disco, N2.4 billion; and Kano Disco, N1.2 billion.

In October 2015, the Discos together with the National Electricity Regulatory Commission, NERC, the Nigerian Bulk Electricity Trader and the electricity generating firms met with Vice President Yemi Osinbajo and a modality for the settlement of the outstanding receivables from the government agencies was worked out.

“The government was to work on the arrangement of deducting the outstanding receivables for utility bills of approximately N71.6 billion from source. And based on this agreement, the regulator deducted the outstanding receivables of the government from the collection loss component of the sculpted tariff. As such, the revenue shortfall, which the entire industry value chain is suffering from, has been exacerbated by the government not honouring its obligations to the electricity industry.

“Cash strapped and further squeezed of working capital by the resistance that greeted the new power tariff structure, the distribution companies’ predicament has been made more precarious by the refusal of these historic debtors, particularly the MDAs, to pay for power consumed,” Oduntan said.

Because of this, the Discos placed advertorials, giving the major debtors an ultimatum to pay up or face mass disconnection of electricity. Some of the Discos, however, have started publishing the names of the debtors. The Benin Disco, for instance, started two weeks ago.

Oduntan stated that ANED was still working with the office of the vice president to resolve the issue in the interest of all stakeholders. He said the office had come up with a new template, which all the Discos were to adopt. This, he said will enable the Discos to state in clear terms what each of the ministries, agencies and departments is owing to guide the vice president’s office in the resolution of the debt crisis.

It should be recalled that the House of Representatives had in January this year tasked Electricity Distribution Companies, Discos, to intensify efforts to collect debts owed by government agencies and parastatals and stop complaining about their inability to do so. Making this call, Daniel Asuquo, chairman, House Committee on Power, wondered why Disco owners were unable to collect their bills from these organisations, even when they were aware that provisions are made in the country’s budgets for such annually.

He, however, charged the operators of the Discos to disconnect government institutions that failed to pay their bills just as they do to regular customers, saying that is the only way they could continue in business. He said, “The Discos must go all out to collect payment for electricity bills from all their customers, whether they are government agencies or not.

“They must run the discos as business and stop waiting for government directive and intervention to be able to collect debts owned by government institutions that consume their products. How do they collect bills from the ordinary consumers? They should deploy the same strategy in recovering debts owned by government agencies.”

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