‘DisCos are complete failures, must be overhauled’, Senate says as minister hints at unbundling

The Nigeria Senate has described the power distribution companies (DisCos) in the country as complete failures which have added nothing significant to the Nigerian power sector.

To this effect, they called for the overhauling of the sector for optimal performance.

Senator Danjuma Goje, a member of the Senate Committee on Power made the remarks during an oversight visit to the Ministry of Power on Monday.

“The Discos have not added anything significant to the power sector, but are just going about collecting money.

“The Discos are complete failures and should be overhauled. They have failed to live up to expectations and we have so many complaints about their poor performances.”

The Senate committee also authorised an investigative hearing on the electricity tariff hike and stated that this would be held on April 29, 2024, at the Senate.

Earlier, the Minister of Power, Adebayo Adelabu also indicted the power Distribution Companies (DisCos) in the country for messing up the government’s privatization of the electricity sector.

He further disclosed that the government has commenced the process of unbundling some of the DisCos as they are too big to be efficient.

He made the government’s position known while playing host to the Senate Committee on Power, led by their Chairman, Senator Eyinnaya Abaribe during an oversight visit to the Ministry of Power on Monday.

READ ALSO:Nigerian govt threatens to sanction DisCos supplying less than 20 hours electricity to Band A customers

Adelabu said, “We are unbundling the Discos along state lines. Some of the Discos are too big for efficiency. They are too big for effectiveness. Ibadan Disco covers seven states. It is practically impossible for them to be efficient.

“So, we are rearranging and restructuring the Discos along state lines so that each state government will know the responsible Disco for their states. Also, the federal and state governments should start exercising their rights in the operation and management of the Discos because we still own 40 per cent in the firms.

“But we have left it for the private sector operators for too long and they have messed it up. So, the government must come back to take over its own right in the Discos. We are also planning to franchise the unserved communities under the Discos.”

The minister went ahead to state that “we will start seeing regulations about franchising. The fact you are Eko Disco doesn’t mean that you cannot have smaller Discos that are ready to invest in your unserved communities. So, we are looking at franchising.”

He said the Nigerian Electricity Regulatory Commission has been made to realise that it must sanction Discos that fail to perform, as the licences of some of the power firms might be withdrawn for non-performance.

“We are transforming the Discos and very soon you’ll see that a lot of tough decisions will be taken against these Discos because they are the last mile in the sector. If they don’t perform then the entire sector is not performing.

“So, we have put pressure on NERC to make sure that it raises the bar on the activities of the Discos. If it has to withdraw licences for non-performance, why not? If it has to change the boards and management, why not?

Also, he disclosed that the Federal government has ordered the sales of four DisCos that were taken over by Deposit Money Banks (DMBs) and the Assets Management Corporation of Nigeria (AMCON).

Currently, four Discos are under bank or AMCON management, they include; the Abuja Electricity Distribution Company under the United Bank of Africa (UBA), and the Benin, Kaduna, and Kano Electricity Distribution Companies under Fidelity Bank over their failure to repay their loans. The Ibadan Electricity Distribution Company is also under AMCON’s management due to financial challenges.

“And all the Discos that are still under AMCON (Asset Management Corporation of Nigeria) and some lenders (banks), within the next three months they must be sold to a technical power operator with a good reputation in utility management.

“We can no longer afford AMCON to run our Discos. We can no longer afford the banks to run our Discos. This is a technical industry and it must be run by technical experts,” the power minister stated.

By: Babajide Okeowo

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now