Discos’ scam and post power privatisation

By  Inwalomhe Donald

You bought pole, you bought the cable & you bought the meter. And you contributed money to buy or replace the community transformer. As soon as you have done all these, they automatically become DISCOS’ property. Then the fraudster electricity distribution companies will, without taking the meter reading, send outrageous estimated bills to you for power never consumed. And if you dare raise a question against their barefaced robbery, they will come and remove the cable you bought with your money as their property. Then you will be charged what they call re-connection fee to get your cable fixed back. And you will have to bribe their personnel to replace a melted fuse or you will remain perpetually in darkness and still pay the bill at the end of the month. The most heinous part of their corporate crime against the people is the revenue target they set for their personnel as to how much they intend to rob Nigerians every month.

President Muhammadu Buhari government needs strategic intervention in the post power privatization crisis in Nigeria. The reality that emerged after privatisation for states and local governments to limit investment in power sector since 2013. A lot needs to be done in areas of reinforcing and re-strengthening the existing 33/11KV network. President Muhammadu Buhari government needs strategic intervention in the distribution of transformers, ranging from 100KVA to 500KVA that are already overloaded. Consequently, the DISCOs have embarked on a daily load-shedding of these transformers in order to keep them in service and to meet its customers’ needs.

President Buhari needs to take strategic intervention because power privatisation was meant to attract foreign and local investments, create jobs, stimulate every other sector of the economy, transfer skills and technology and make local products competitive and the necessity of alternative power provision. This agreement is preventing Buhari from taking action on the power privatisation. President Buhari needs to take strategic intervention in the five-year performance agreement of post power privatization crisis, which was due for review last December. It has been abandoned. Instead, there are plans afoot to sign another five-year agreement with the current investors, according to reports. This is more or less an endorsement by the government, the basis of which is still unclear. The 5-year Performance Agreement for all the electricity distribution companies has hindered and sidelined President Buhari’s efforts in revamping power sector in Nigeria. The terms of the Performance Agreement provide for a 5-year tenure during which the core investors in the Discos were required to fully achieve far-reaching efficiency improvement targets.

Obviously, power privatization of 2013 has failed and President,Muhammadu Buhari should take strategic decision to give electricity to Nigerians.. More than six years after the erstwhile public power monopoly was split into 18 enterprises and 17 of them sold through a skewed privatisation process, perhaps the only thing that can readily be associated with the sector, aside from its perennial ineptitude, has been the periodic clamour for higher tariff, with little or no corresponding improvement in the quality of service delivery. Nigerian businesses confront serious energy costs that threaten jobs and raise the prices of goods and services. When the privatisation was consummated on November 1, 2013, it was hailed as the beginning of a journey to liberation from perennial power cuts and other ills that were the hallmark of the defunct Power Holding Company of Nigeria. The new investors were supposed to provide the electricity that would drive Nigeria’s economic growth and accelerate industrialisation.

President Muhammadu Buhari government has no definite road map to untangle the mess of 2013 power privatisation because of the dubious associated performance agreement signed in August 2013 which was based on political patronage. President Buhari is sidelined by 2013 performance agreement which provided, among other things, performance indices that the core investors covenanted to achieve, agreed reduction targets of aggregate technical, commercial and collection losses. This means that operating licences of the hopelessly incompetent DisCos would not be cancelled based on this agreement. This agreement treats Discos very well that lack track record, technical and managerial expertise, financial capacity and transparency. Those that drafted and signed the power privatisation agreement are also accusing President Buhari for inaction in the power sector. The discos that got billions of naira as bailout fund have accused President Buhari of not putting much investment to improve on power supply.  Power supply today is an admission that the Goodluck Jonathan administration that superintended over the power sector privatisation dealt so selfishly, so cavalierly and so treacherously with Nigerians. Shamsuddeen Usman, a former National Planning Minister under that regime, confirmed recently that politicians and officials circumvented safeguards as they scrambled to corner stakes in the unbundled DisCos and GenCos. Usman, a former director-general of the TCPC, forerunner of the Bureau of Public Enterprises, recalled how transaction principles were “side-stepped and the outcome, therefore, influenced by political considerations as against economic and technical capacities of the eventual preferred bidders.”

BPE set December 2019 for Final Performance Review of Discos as those that sold NEPA bought NEPA. NEPA was sold by the then PDP led federal government and bought by the business men within the then ruling party. They gave Nigerians fixed charge to pay, whether you have power supply or not. DISCOS have created a dedicated line of power supply to serve the rich people and leave the poor people in darkness. Exactly six years since 11 power distribution and six generating firms were handed over to some “private investors,” it is a bleak anniversary, rendered gloomier still for Nigerians and businesses by the missteps and disarticulation of the power privatisation. President Muhammadu Buhari government does not know what to do with the mess it inherited. President Muhammadu Buhari government is considering reviewing the controversial power privatisation of 2013. The Bureau of Public Enterprises (BPE) announced December 31, 2019 as the final performance review date of 10 of the 11 electricity distribution companies (Discos) in the country, with the exception of Kaduna Disco. The much-publicised power sector reforms in Nigeria, under the Electric Power Sector Reform Act of 2005, have yet to yield desired and anticipated fruits largely due to corruption and impunity of perpetrators, regulatory lapses and policy inconsistencies.

Ordinary Nigerians continue to pay the price for corruption in the electricity sector–staying in darkness, but still made to pay crazy electricity bills.”

President Buhari needs to take strategic steps in the five-year performance agreement of post power privatization crisis the undertakers of the privatisation exercise as contained in the (EPSR Act 2005) only took cognizance of the legal framework, not minding the role of states and local governments’ investments in power sector and the engineering framework. The electricity industry was not ripe for privatisation at that particular point in time; it was carried out in a hurry and haphazardly which led to the neglect of states and local governments investments in the power sector.

Inwalomhe Donald writes via inwalomhe.donald@yahoo.com

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