As a result of the large sizes of the power distribution companies in Nigeria, the Federal Government declared on Monday that is in the process of unbundling them along state lines in order to improve their efficiency and effectiveness.
It also directed the sale of Electricity Distribution Companies (DisCos) that have been taken over by Banks and the Assets Management Corporation (AMCON) from its original investors/owners.
Addressing the Senate Committee on Power on Monday, Minister of Power, Chief Bayo 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 of 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 return to take over its rights in the DisCos. We are also planning to franchise the unserved communities under the DisCos,” he said.
The five Discos currently under the management of Banks and AMCON are;
Abuja Electricity Distribution Company
Benin Electricity Distribution Company
Kaduna Electricity Distribution Company
Kano Electricity Distribution Company.
The Ibadan Electricity Distribution Company is under the AMCON management.
The Discos went under Bank management after being unable to repay the loans they acquired from the financial institutions.
The government is of the view that those who acquired the Discos during the privitisation exercise about a decade ago lacked the required expertise and resources to run the companies.
The Minister also revealed that over hundred projects of the Transmission Company of Nigeria (TCN) have not been completed in the last two decades, even though he noted that the government had invested heavily.
“We have about 62 lines projects across the country that were started and have not been completed. And these are being affected by exchange rate calculations, inflation, variations, etc. One thing about power projects is that if they are not completed 100 per cent, you cannot energize them,” Adelabu stated.
He lamented that most of the investments were becoming white elephant projects but he hoped that many of them will be completed under his watch.
