By Kunle Kola Olubiyo
About Five Electricity Distribution Companies were making N10 Billion x 5 DisCoys = N50 Billion per Month.
They were not remitting to Nigerian Electricity Market Pool managed by
Nigerian Electricity Bulk Trading Company PLC (NBET) and Market Operators to fund the cash strapped market.
Whenever they choose to remit at all, they usually remits paltry sum of 10% to 20% of Total Monthly Revenue.
It was more or less like a bitcoin crypto-currency market or an Investment Ponzi Scheme where there were serious Market’s Risks and attendance in fighting between the board members, chairman of some discos were segregated and excluded largesse.
It was a cat and mouse relationship between those that hurriedly came together to form the DisCom few weeks before privatization, they can best be described as strange bed fellows.
In a year the big discos (the big 5 )
made an average of N10 Billion Naira per x 12 months = N120 Billion x 5 big DisCoys. This is equal to N600 billion in revenue/collection per annum.
In three years the money would be equal to = N 1.8 trillion Naira in just 3 years yet no remission.
The Open Book Review carried out by NERC were jettisoned or abandoned due to dearth of the courage to implement them or what industry stakeholders largely described as regulatory captured.
There were different caucuses and Maffians like cartels like structures and secret bank accounts exclusively known to two or three members of the inner causes of each of the board of Directors or Equity Stakeholders were managed and operated in the most secretive manners.
From one DisCoys to another, there were serious mistrust amongst the investors, local and foreign partners.
They could not eat from each other’s table and could not freely take drinks from each other’s hand.
It was purely an outright cases of profound mistrust.
There are several dirty board room intrigues and crafty design to go for each other’s head in a mafia like dirty fight.
They smile at each other and embraces each other but there were and up till tomorrow, a well pronounced trust deficits.
You recall that Equity Stakes Holding for Power Sector Privatization is 40% for Conglomerate of Local and Foreign Investors, 40% for Federal Government of Nigeria, 20% for the General Public & the Organised Labour
Put together or aggregates the equity shares or the combine the equity of Federal Govt and the Public/Organised Labour = 60% Majority Shares.
Federal Govt have been providing the Payment Assurance Fund ( PAF ) for regular payment of gas, Now that has been drawn down and exhausted. the Private Sector owned gas companies that used to rush to supply Gas has shut down their machines.
They are not ready to supply on Credit. They simply wants Cash and Carry.
This is where the PRG of AcuGas that is place between NIPP/NDPHC and AccuGas and the likes comes to rescue.
Take or Pay Obligations to Gas Suppliers or Provision of PRG or Firm Contracted Gas Purchase Agreement between GenCos and GasCoys are inevitable and fundamental if we must be taken serious as a Nation.
The recent attempts by NBET and DisCoys to call off or pull out their 90 days Bank’s Guarantee/Bankers Guarantee or 90 days Letter of Credits from the Markets will no doubt exposed the Market to more ridicule and make Nigeria look like an un- serious Nation or make mockery of the Nigerian Power Sector in the Comity of Nations.
Moving forward, the Regulatory Institutions that has direct and indirect bearing on the Power Sector should rise above board, be an Incorruptible judge, rise above Regulatory Capture, be firm, courageous and consistent in the strict implementation of Markets Rules, Statutory and Regulatory Framework.
This is the way to go in an ideal Regulatory Landscape.
If we really want to get the best for the Nigerian Electricity EcoSystem.
- NB: Kunle Kola Olubiyo is the President, Nigeria Consumer Protection Network. Also, Member of National Technical Investigative Panel on Power System Collapses, System Stability and Reliability (June ,2013) and the Presidential Adhoc Committee on Review of Electricity Tariff (August, 2020).
