The federal government has said that it would no longer provide intervention funds as a subsidy to the distribution companies (DisCos) over their continued show of incapacity, inefficiency and dishonesty in the supply of electricity to consumers despite the huge investment in the power sector since its privatisation in 2013.
The minister of power, Mr. Saleh Mamman, who stated this while briefing journalists at the end of the federal executive council (FEC), held yesterday at the Presidential Villa Abuja.
Mamman stated that even when the DisCos receive 3,000 megawatts, they shortchange the system by paying for only 1,000 megawatts.
“Government cannot continue subsidising. Government cannot continue to subsidise because what they are doing is that they collect 3, 000 megawatts and pay for only 1,000 megawatts. That is 15 per cent of what they are collecting. So, government is the one completing the payment.
“So, we cannot continue like that. If they are ready to continue, fine but if they are not ready to continue, maybe they should give way to whoever that is ready to come and invest. So, we are asking the government to review and see if they are capable, fine; but if they are not capable, they should give way,” he said.
He said the ministry had submitted a memo to the council to decide the fate of DisCos that have failed to honour their commitment to buy and distribute adequate power generated for them by the generation companies (GenCos).
“We presented achievements right from the day we took an oath of office to date. We want to tell Nigerians what we achieved in the value chains. Nigeria can generate up to 13,000 megawatts of electricity but we cannot transmit all.
“So today we presented to the council the solution to the problem of our generation. It is mainly distribution. We can transmit; we can generate 13,000 megawatts, we transmit 7,000 megawatts but can only distribute 3,000.
“There is a lot of work to be done in transmission companies and the government is now willing to take up the matter immediately.”
The minister said the proposal to hand over power distribution to Siemens was contained in a memorandum of understanding (MoU) that he submitted to the council yesterday.
He said the memorandum would be deliberated upon soon and if approved, the DisCos will be out of business.
He added: What I want to say is that most of the problems we are facing in this country is that we cannot get electricity supplied adequately and efficiently and this is because we have a problem in distribution.
“On generation, there is no more problem. We can generate up to 13,006 megawatts but the transmission, those who are taking the electricity supply can only take 7,000 megawatts; even at that, they are not taking the whole 7,000 megawatts but only 4,500 megawatts and then send for distribution. The distribution (Discos) in turn receives only 3,000 megawatts. Because of technical and commercial reasons, they cannot contain the whole power that has been generated.
“So, we have to correct the infrastructure. That is why I said that (yesterday), I submitted my observation to council and I believe the government is on it. One of the things I will tell you is that government has signed a memorandum of understanding with the German company, Siemens.
“They are to align between distribution and transmission and also generation, so that at the end of the day, if we generate 13,000 megawatts, transmission will take the whole 13,000 and will distribute same. That way, Nigerians will be happy and everyone will have 24/7 electricity supply.”
