N93bn debt: Power firms to disconnect MDAs, military

Minister of Power, Works and Housing, Babatunde Fashola

Electricity distribution companies are poised for a showdown with their major debtors as the latter face mass disconnection of supply in the days ahead.

The firms 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 N93bn, also accused the military and security agencies of failing to pay up their bills.

The Executive Director, Association of Nigerian Electricity Distributors, Mr. Sunday Oduntan, said as of April ending, the total debt of the MDAs, military and security agencies stood at approximately N93bn.

This, he said, was made up of N39.1bn pre-privatisation and N39.5bn post-privatisation as well as the outstanding interest of N15bn, which the bulk trader charges discos for late payment of their energy bills arising from non-settlement by consumers.

A breakdown of the sum is as follows: Abuja Disco, N18.6bn; Eko Disco, N8.6bn; Kaduna Disco, 8.2bn; Enugu Disco, N7.2bn; Ibadan Disco, N6.8bn; Ikeja Disco, N5.9bn; Port Harcourt Disco, N6.8bn; Benin Disco, N5.8bn; Jos Disco, N6.5bn; Yola Disco, N2.4bn; and Kano Disco, N1.2 bn.

Oduntan said in October last year, the Discos together with the National Electricity Regulatory Agency, the Nigerian Bulk electricity Trader and 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.

He added, “The government was to work on the arrangement of deducting the outstanding receivables for utility bills of approximately N71.6bn 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.

“Cashstrapped 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.”

To this end, 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 will enable them 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.