Why FG Can’t Sanction DISCOS, GENCOS Over Inefficiencies- Fashola

The Minister of Power, Works and Housing, Mr. Babatunde Fashola has said it would be difficult for the federal government to randomly punish the operational inefficiencies of electricity generating and distribution companies in the country because the government had largely failed to provide them with the right tools to work with.

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Minister For works, power and housing Mr Babatunde Fashola
Minister For works, power and housing Mr Babatunde Fashola

Fashola in a statement from the Director of Press in the Ministry of Power, Mr. Timothy Oyedeji, told the joint committees of labour, power, and steel development during a public hearing on electricity tariff hike that there are operational challenges the Gencos and Discos contend with and which the government has not addressed.

He said as a responsible government that inherited a legally-backed transaction, which gave majority shareholding to private investors in the Gencos and Discos, it would not act arbitrarily but must follow due process if it wanted to punish their inefficiencies, to avoid harmful court cases.
The minister, according to the statement wondered how Discos could be sanctioned when they were not supported to improve on their operations.

He added in this instance that the government lacks the moral right to sanction them because many of its agencies still owe huge sums of money for electricity they consumed over the years.
He also spoke about the protracted controversy over the recent tariff raise, saying that contrary to insinuations, the new rates were not arrived at arbitrarily because the conditions for its periodic review are specified in the Electricity Power Sector Reform Act 2005.

The minister also asked all concerned stakeholders to consider exploring the content of the Act to identify the provisions for adjustment as the tariff has not been irreversibly fixed.

“The processes of determining tariffs are clearly outside the control of government,” Fashola said, adding that with the liquidation of the Power Holding Company of Nigeria (PHCN), the government has become a minority shareholder in the business of power, thus handing over the task of regulation of the sector to the Nigerian Electricity Regulatory Commission (NERC).

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Daniel Enisan is a content writer at edliner.com. With a degree in mass communication, Daniel is a full breed journalist. Daniel is a realist, loves the use of sarcasm, a movie and music junkie. He is also a poet and a good listener.

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