Power: FG, Investors’ Face-off Exposes N200bn Revenue Shortfall
The five-year-old bickering between the Federal Government and investors in power sector has exposed N200 billion gap in market shortfall. This came as Nigeria’s power grid recorded six total collapses between January and March this year in contrast to just one in the preceding quarter of 2017.
The sector’s market shortfall, investigations by New Telegraph revealed, became obvious after the $2.5 billion bought over of power assets from the Federal Government, which culminated in the November 1, 2013 handover of Power Holding Company of Nigeria (PHCN) to the investors.
While government insisted, in a document commissioned by the Federal Ministry of Power, Works and Housing, that the market shortfall, a result of audit, is officially about N800 billion, the private sector operators of the power firms insisted that the shortfall is over N1tillion.
“The bickering over the number, though needless, has helped to show over N200 billion gap,” a retired auditor-general in a South- West state, said after his anonymity was guaranteed. In a “better clime,” he added, the “two major stakeholders would have avoided the embarrassment of flaunting conflicting figures in a country that has auditors in their hundreds of thousands.”
This, notwithstanding, government has earlier promised a disbursement of N210 billion Electricity Market Stabilisation Fund (NEMSF) and a report by the Central Bank of Nigeria (CBN), custodian of the funds, showed that 75 per cent, being N158.7 billion, of the funds has been disbursed to 47 firms.
The report, however, showed that the 47 power firms who benefited from the fund are still indebted to the tune of N139.3 billion outstanding repayment. They have only repaid N19.3 billion of the N158.7 billion, the report added.
The apex bank added that the inability to fully sign-on to the facility by two other firms in the distribution starum of the power industry has led to the trap of 25 per cent of the fund, about N51 billion. It read: “Effort to sign on these DisCos is already been intensified as both DisCos have made remarkable progress in this regard.”
The 11 distribution firms, Nigerian Electricity Regulatory Commission (NERC) said at the weekend, failed to remit a total of N112 billion to the Nigerian Bulk Electricity Trading Company and the Market Operator of the sector in the first quarter of this year. Also, Nigeria’s power grid recorded six total collapses during the period, in contrast to just one in the preceding quarter of 2017.
The latest Nigerian Electricity Regulatory Commission’s ‘First Quarter 2018 Nigeria Electricity Supply Industry Performance,’ which showed this, added that the DisCos did not remit N97 billion and N15 billion to the NBET and the MO respectively during the period under review. Out of the N137 billion invoiced amount to the power firms by NBET, the DisCos only remitted N40 billion, leaving a balance of N97 billion.
Meanwhile, with the N158.7 billion NEMSF’s facility, operators were to clear the legacy debts wrapped around gas and contracts that lingered before the power sector privatisation in November 2013 to improve service delivery. With a six months moratorium, the funds open up 10 years pay back term for the loan at 11 per cent interest.
On the impact of the disbursed fund, the report shows the benefitting DisCos provided N13.78 billion security cover to the Nigerian Bulk Electricity Trading Plc (NBET) and the Market Operator (MO) as required under the vesting contracts/ market rules to serve as guarantee for DisCos’ payment for energy charges and ancillary service charges.
It also helped the DisCos to purchase 704,928 meters for their customers; they also purchased and installed over 500 transformers to enhance the distribution networks.
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