DisCos Must Sit Up Or Leave – Minister

DisCos Must Sit Up Or Leave – Minister

Nigeria’s major electricity problem is in the transmission and distribution of electricity, the power minister, Saleh Mamman, has said.

Mr Mamman told journalists after the Federal Executive Council (FEC) meeting Wednesday that he submitted a report to the FEC on the problem.

He said Nigeria is currently able to generate 13,000 megawatts (MW) of electricity but can only transmit about 7,000MW and can only distribute about 3,000 MW.

“Nigeria can generate up to 13,000 megawatts of electricity but we cannot transmit all,” he said.

So today, we presented to the council the solution to the problem of our generation. It is mainly distribution. We can generate 13,000 megawatts, we can transmit 7,000 megawatts but can only distribute 3,000.”

After Nigeria’s electricity privatisation programme, the government privatised the generation and distribution companies with government only manning the Transmission Company of Nigeria (TCN).

Mr Mamman said the distribution companies are a major hindrance to the success of the electricity sector and must sit up or “give way.”

“We cannot continue like that,” he sais. “So, 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.”

Mr Mamman is not the first power minister to accuse the distribution companies of inefficiency. His predecessor, Babatunde Fashola, repeatedly had clashes with the DisCos while in office. The DisCos have, however, mentioned inadequate infrastructure and poor pricing of electricity as hinderances to their performance.

Read Mr Mamman’s interview with State House reporters below.

Mamman: We presented achievements right from the day we took 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 can 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.

Q: You left us hanging, what has government resolved to do?

Mamman: What I want to say is that most of the problem we are facing in this country that we cannot get electricity supplied adequately and efficiently is because we have a problem in distribution. Generation, 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 to distribution, the distribution in turn receives only 3,000 megawatts. Because of the 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 today, 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 memorandum of understanding with the German government, 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.

Q: So what will become of the DisCos?

Mamman: The DisCos are the ones manning the distribution, that is why I have submitted my observations to the government. It is left for the government that will have to decide. We just have to sit and see whether they are capable, have the technical know-how because most of the problems we are having today is the loss – technical loss and commercial loss. They will give you light and may not collect your money or they will collect the money and pocket, or they may send light and you may not have good sub-station that may collect this power and distribute to customers. This has been our major problem and it is the responsibility of the DisCos to take care of that end.

Q: What happens to the several financial interventions the government has made?

Mamman: That is what we are saying: government cannot continue to subsidize 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. So 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 government to review and see if they are capable fine but if they are not capable they should give way.

Q: How are you trying to address the debts between DisCos and GenCos, between GenCos and Gas producers?

Well, we have come up with a plan, that issue of willing buyer, willing seller. You know there is ardent capacity of generated electricity that we cannot pick at all. So we are now asking the GenCos…you can imagine we are only paying them 15 per cent out of 100. So where do we take the remaining 85 per cent. Even if NBET is collecting 100 per cent, gas alone is taking 60 per cent, only 15 per cent is used for their overheads. So if they cannot work outside the agreement with the NBET, you can see how they are struggling to get their money back. NBET buys electricity from GenCos, supplies to DisCos and collects money from DisCos and pay the GenCos, that is why we have the gaps and that is why we have to do something to correct this gaps. Now it is government’s decision.