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Licenses of Electricity Distribution Companies
(DisCos) expired in October this year with a possibility of a two year
extension due to non-performing years, the House of Representatives heard
yesterday.
This was as the DisCos were yet
to repay the N88.680 billion loan granted by Central Bank of Nigeria (CBN) them
which they were supposed to pay back within 120 months.
At an investigative hearing of
the House Committee on Public Accounts, Chairman of the Committee, Hon.
Bamidele Salam had sought to know when the operating license of the DisCos will
expire.
Responding, Managing Director of
Jos Electricity Distribution Company, Abdul Bello Mohammed told the lawmakers
that the operating licences of all the DisCos expired last month (October), but
was quick to add that two years were declared as non-performing years.
He said: "The EPS 2005
provided for a tenure of 10 years licence for the Distribution Companies. But
however, there's also a provision for renewal of this licence for another 10
years and then extension by five years."
When asked when the first 10
years was supposed to elapse, Mohammed said: "It should be in October this
year."
But Hon. Salam who was apparently
not satisfied by the response, inquired further saying: "the first 10
years elapsed in October this year and we are in November already?
Mohammed said: "yes, by
implication; going by the provisions of the Act. But there are two years that
were declared non-performing years and I think they'll be added."
Probing further, Hon. Salam asked
whether the licence will extend to 2025 and automatic, saying "it has to
be applied for. The Act clearly provides that the DisCos should write.
"The Act is very clear about
it, it says that the DisCos will apply for the renewal of this licence and then
the Commission (NERC) can also extend it."
When asked again whether the
DisCos have applied for the renewal, Mohammed said: "it (existing licence)
has not expired yet because of the two years non-performing” but was quick to
add that "it is the Commission (NERC) that will actually clarify
that."
Members of the committee frowned
at the poor performance of the contractors who accessed the fund on behalf of
the DisCos, while expressing concern that the DisCos who have not been able to
access the facility, but have started repayment of the interests on the loan.
According to the DisCos’
representatives, most of the contractors engaged have not been able to access
the facility approved by the apex bank for the execution of various power
projects under their purview.
A report presented to the
committee from CBN revealed that as at August 2023 out of 50 contractors 30 per
cent has so far been able to complete the process to access the fund.
However, Hon. Salam said:
"why I asked that question was, you have a bill of 120 months loan
repayment bill and I'm afraid that if the licence expires and there's no
renewal, where do we get our money back?"
While lamenting that some of the
DisCos are not stable financially, Hon. Salam frowned at the inability of the
DisCos to access the intervention fund worked out for them through the apex
bank to boost their capacity.
He said: "We were made to
sign contract awards as DisCos and the PMO also issued the final contract
award. The projects are meant to confront the problems the DisCos. We agreed
with TCN that this money will be channeled through the distribution companies
with the purpose of addressing these bottlenecks. And that is the structure
that has been put in place through the PMO and everybody is involved."
In another breath, Mohammed said
"the payments are not DisCos projects, they are specifically TCN projects
but DisCos are used through all the lending structures to shoulder that
responsibility."
The Committee resolved to summon
all the stakeholders involved in the transactions including, CBN, NERC, Deposit
Money Banks, DisCos, Transmission Company of Nigeria (TCN), contractors, among
others.
While ruling, Hon. Salam
adjourned the investigative hearing to 13th December, 2023.
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