Nobody Forced You to Buy Assets – Fashola Tells Discos

The Minister of Power, Works and Housing, Babtunde Fashola, has threatened to sanction power distribution companies, Discos, for their continued breach of agreed terms and epileptic service.

The minister, who spoke during the 15th monthly meeting of power sector stakeholders in Jos, Plateau State declared that the power firms had failed Nigerians in many aspects.

Mr. Fashola, who condemned a statement released by the Discos recently, said the alarms raised by the power firms were “wholly misleading and substantially untrue, because they conceal facts from the public.”

Earlier, the distribution companies had, among other issues raised, alleged that the infrastructure in the power sector were obsolete and affect their operations.

But in his reaction, the minister said the allegations were unnecessary because the power firms were aware of the state of the facilities when they purchased the asset.

Commenting on how the Discos frustrate efforts of the government, Mr. Fashola said the firms had formed themselves into an association of power distribution companies and had consistently issued statements on issues they either did not present for discussion at meetings, or which contradicted the communiqué jointly released after each meeting.

He, however, said that the power ministry reserved the right to recognise or deal with the Discos as a body, but would only deal with them as individual power firms if the need arises.

The minister, who expressed worry over the poor attendance at the forum, said the distribution companies are bent on frustrating the stakeholders’ meetings.

Mr. Fashola also alleged that the Discos had failed in providing meters and electricity feeders to consumers, adding that they had been remitting very poor revenue to the market and making false allegations against the government.

On the allegation made by the firms that attempts to escrow their revenue accounts would amount to nationalisation or an intrusion into their business, Mr. Fashola said the firms failed to state that the condition was agreed upon by the firms and the Central Bank of Nigeria, CBN, noting that the agreement between the Discos and the CBN was a condition for the bank to offer the firms stabilisation funds by way of loans to fund the business they invested in because commercial banks were reluctant to do so.

“What you (Discos) also failed to state was that the loan was at 10 per cent interest , which is well below the commercial rate,” the minister said.

“What you also failed to state is that you also agreed under that arrangement to establish letters of credit to guarantee future payments to the NBET and Transmission Company of Nigeria ’s Market Operator, that the agreed commercial terms of the letters of credit authorises the NBET and the Market Operator to draw on the letters of credit for any default in payment to them, and that such defaults have occurred and continue to occur.

“Any right-thinking person will accept the principle that any person lending you money must have the right to know what you are doing with the money , especially when under – collection and underpayment have been a major feature of many Discos’ performance.