Why The Federal Government Had To Escrow The Discos Accounts

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CBN

Power Investors flay FG's plan to escrow discos' accounts - Businessday NG

By Kunle Kola Olubiyo

 

About Five Discos companies were making N10 Billion x 5.= N50 Billion per Month .

They were not remitting to NBET and Market Operators to fund the Cash strapped Market. Whenever they choose to remit at all, they usually remits paltry sum of 10% to 20% .

It was more or less a bitcoin currency market where there were serious in fighting between the board members, chairman of some discos were segregated and excluded .

It was cat and mouse relationship between those that hurriedly came together to form the DisCom few weeks before privatization, they can best be  described as strange bed fellows.

 

In a year the big discos made an average of N10 per  x 12 months = N120 x 5  big DisCoys .

This  is equal to N600 billion in revenue  / collection.  In three years  the money would be equal to  = N 1.8 trillion Naira in just 3  years.

 

There different caucuses and Maffians like cartels like structures and secret bank accounts only or exclusively known to two or three members of the inner causes of each of the board of Directors or Equity Stakeholders…

From one DisCoys to another, there serious mistrust amongst the investors , local and foreign partners.

They could not eat from each other’s table and could not freely take drinks from each other’s hand. It was pure mistrust.

There are several dirty board room intrigues and crafty design to go for each other’s head in a mafia like dirty fight. They smile at each other and embraces each other but there were and up till tomorrow, no one trust the other..

You recall that Equity Stakes Holding for Power Sector Privatization is 40% for Conglomerate of Local and Foreign Investors, 40% for Federal Government of Nigeria,

20% for the General Public & the Organised Labour

 

Put together or aggregates the equity shares or the combine the equity of

Federal Govt and the Public /Organised Labour = 60% Majority Shares..

 

 

Federal Govt have been providing the Payment Assurance Fund ( PAF ) for regular payment of gas, Now that has been drawn down and exhausted. the Private Sector owned gas companies that used to rush to supply Gas has shut down their machines .

They are not ready to supply on Credit. They do Cash and Carry. .

 

This is where the PRG AcuGas between NIPP /NDPHC and AccuGas and the likes come to rescue.

 

Take or Pay Obligations to Gas Suppliers or Provision of PRG  or Firm Contracted Gas Purchase Agreement between GenCos and GasCoys are inevitable and fundamental if we must be taken serious as a Nation.

 

The attempts by NBET and DisCoys to call off or pull out their

90 days Bank’s Guarantee / Bankers Guarantee or  90 days Letter of Credits from the Markets will no doubt exposed the NESI to more ridicule and make Nigeria look like unserious and make mockery of the Nigerian Power Sector in the Comity of Nations.

 

Moving forward,the Regulatory Institutions that has direct and indirect bearing on the Power Sector should rise above board, be an Incorruptible judge,  rise above Regulatory Capture, be firm ,  courageous and consistent in the strict implementation of Markets Rules , Statutory and Regulatory Framework .

 

 

This is the way to go in an ideal Regulatory Landscape. If we really want to get the best for the Nigerian Electricity EcoSystem.

 

 Kunle Kola Olubiyo is President, Nigeria Consumer Protection Network, Member ,

National Technical Investigative Panel on Power System Collapses ,

System Stability and Reliability ( June ,2013 )

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