Meter Distribution: DisCos blames low liquidity in sector for poor run

…as consumers call for a review on privatisation

Micheal Ajayi

Abuja Electricity Distribution Company (AEDC), General Manager, Corporate Communication, Mr Oyebode Fadipe has said the pace of metering of electricity consumers is slow because of low liquidity in the sector.

Fadipe made this disclosure on Thursday in an audience participatory programme of Radio Nigeria in Abuja, where he noted that the Federal Government has pegged a limit to which the DisCos can spend its revenue.

He explained that metering is aligned with the issue of liquidity in the sector, stressing that where there is the issue of paucity of cash, it limits the firm’s capital expenditure.

Besides, he said that the DisCos have not been allowed to thrive with a cost reflective tariff.

He said: “The issue of metering is tied to the issue of liquidity. Where there are no sufficient funds for investment in the sector, there is no way you can expect everything will go on smoothly.

“For instance, the fundamental part of the challenges that the DisCos and indeed the power sector experiences are that there is a limit to your capital expenditure. You have a ceiling on your budget.

You are not allowed to spend beyond a particular revenue level. Then how do you want to provide all the things that you want?

“That is also with prejudice to the fact that you don’t even have a cost reflective tariff that is supposed to help you have the cash to enable you to purchase most of these things.”

Fadipe however, revealed that in its bid to intensify efforts at metering the customers in its franchise area, the AEDC recently purchased a single vehicle for N114 million.

He said that “We (AEDC) signed the contract for N10billion for just meters alone and it was not going to give us a much as 300,000 pieces of meters for a customer population of that is over a million.

“From this Meter Assets Provider Programme we are metering 900,000 in 36 months.

Why did the government decide that the third party should go and handle that Programme it was because clearly the DisCos don’t have the financial capacity to meet up with that cost as much as it would have done,

so let independent companies go and do it, which has its own advantage of creating employment for some people.”

Meanwhile, the Secretary-General, Network for Electricity Consumers Advocacy of Nigeria (NECAN), Mr Uket Ogbonga, in response to this recalled that the very reason for the privatization of the power, the sector was that the Federal Government had no financial capacity to run it.

Uket, while reacting to the matter further expressed concerns why the DisCos should cite excuse of cash crush, the same reason for which the entities were sold to private investors, who were presumed to have the financial, management and technical capacities.

Ogbonga called on the Federal Government to embark on a total review of the models with which the Bureau of Public Enterprises (BPE) privatized the power sector entities.

His words: “We were told that private investors with the financial, technical and management capacity were to be brought on board. And when they unbundled the defunct PHCN and they were handed over, we are hearing a different story.

“And the story is that we don’t have the resources, that they (DisCos) cannot meter customers because they don’t have the financial capacity to do that.

“So that is why we are rooting for a total review of all the models that were used for the privatization exercise.

You can’t tell me I can’t do this business because of this problem and bring in somebody that has the capacity and he is coming to tell us I can’t do it.”