Minister of Works, Power and Housing, Mr. Babatunde Raji Fashola, on Thursday, disagreed on the N90 billion debts electricity Distribution companies, DISCOs said the Ministries, Departments and Agencies, MDAs, were owing them, stating that the only verified debt was about N27 billion.
Fashola, who made the clarification at the 3rd National Council on Power, with theme “Completing the Power Sector Reform.” holding at the Crest Hotel, Old Airport Road, Jos, the Plateau State capital, said the claims by DISCOs on the debts were not correct.
Fashola said rather, “There are invoices which show that other parts of the debt are attributable to service points at States and local governments.”
According to him, “Ladies and Gentlemen, these are some of the reform actions contained in the Power Sector Recovery Programme being undertaken at Federal Government level.
“But there are other areas of Reform where progress will be defined by what happens at the state and Local Government and this is one of the reasons why we chose to discuss this theme at this council where all the states are represented.
“For example, out of the estimated MDA debts of about N90Billion claimed by the DISCOs, only aboutN27Billion has been verified as debts owed by the FGN.
“I will urge first that states and local governments insist that their buildings are metered so that they can budget for and pay for energy they use. It will turn out to be cheaper than diesel generated power.
“It will also help reduce loss of income by DISCOs.
“Furthermore, I urge state Governments to set up small teams with audit capacity to verify debts owed by them and their local governments, ascertain the quantum and develop a payment plan which can then be budgeted for. This will help to reduce the liquidity issues and contribute to the reforms.
“More importantly the challenges of inadequate power manifest itself in households, businesses, service centres and other points of need that are located in states and local Governments.
“Therefore, the impact of insufficient power is manifest at municipal level and so will be the benefit of improved power.
“Therefore, it is only logical and necessary for states and local Governments to own and participate in the implementation of the 2005 Law and the PSRP.
“Therefore instead passing votes of no confidence in the DISCOs who serve them, I will urge that they take a more important role of engagement and consultation to help the DISCOs serve them better.
“Communities and states who want to see improved power must also sacrifice and contribute some of their land for this service to be provided.
“The land will not finish but the prosperity that comes from better power will only help improve the quality of life, the value of their land and the use of their land.
“The list of things that states can do to help improve power supply, reform the sector and implement the 2005 Law and the PSRP are only limited by imagination.”
On the privatised power assets, Fashola emphasised, “Let me set the context by once again reminding all of us that the power sector has been privatized and is largely in the hands of the private sector. Therefore, the work that needs to be done is largely the responsibility of the private sector.
“Our role as governmental institutions at Federal and State levels is to implement the laws, enunciate Policies and take actions that help the private sector play its part effectively.
“Our roles in this regard are well set out in the Electric Power Sector Reform Act 2005 pursuant to which the privatization of the power sector took place. That law, which I urge everybody to read, clearly sets out my role as minister which is to administer the Law in section 100.”
The minister stressed further, “As we are all aware, there have been comments about how effective privatization has been in the power sector and some people have called for its cancellation which I disagree with.
“However, I agree that there are problems, I understand that 4 (FOUR) years post privatization is a transition period, and some more work needs to be done before the expected benefits of privatization come to fruition.
“That is why we developed the Power Sector Recovery Programme (PSRP) which are a set of policies, programmes and actions aimed at solving Generation, Transmission, Distribution, Liquidity, Metering, Estimated Billing, Energy Theft, Safety and other challenges.
“While we are beginning to see results of increased generation up to 7001MW on 12th September 2017, Transmission up to 6,700 MW and Distribution 4,600, it is not yet enough.
“The theme of this meeting therefore provides opportunity to share with state representatives and other participants what the PSRP is about.
“Let me state emphatically that everything in the PSRP is based on the 2005 Law and that is why I urge everybody to read it.
“So, the N701B payment assurance guarantee which has driven up power Generation is consistent with Section 76(2)(b) of the Law which seeks to ensure that producers of power recover their investment and some profit.
“I will conclude by urging states to pay more attention to the provision of the Law, the PSRP, and to consult with the ministry and NERC should they need clarification.”