By Favour Nnabugwu
The Bureau of Public Enterprises (BPE) has justified the decision to restructure the ownership of four electricity distribution companies, DisCos, saying the performance of the sacked owners was abysmal.
The Director General of BPE, Mr. Alex Okoh in a statement in Abuja reacting to opposition of the takeover by sacked owners of Benin, Kano, Kaduna and Ibadan DisCos, said the utilities were the worst performing in the market.
Okoh singled out Ibadan Electricity Distribution Company, IBEDC for particular mention, stating that the company’s performance was worse under the management of the sacked owners than pre-privatisation in 2013.
He insisted that restructuring was temporary as the government expects the commercial banks who now manage the companies to sell them to new investors soon, as they had neither the licence nor capacity to manage electricity companies.
Recall that three days ago the companies’ owners were sacked by the government after lender, Fidelity Bank called in their loans.
But the owners has resisted calling the takeover illegal. But BPE said the decision was commercial and contractual.
According to the agency, “It is envisaged that the majority interest in these DISCOs would be sold to competent private sector investors with the requisite technical and financial capacity to re-capitalize and manage these entities efficiently.
“As an interim measure, NERC and BPE met on an Emergency Basis and activated the Business Continuity Process and appointed interim Managing Directors in the affected DISCOs as follows:
Kano DISCO – Ahmad Dangana
Benin DISCO – Henry Ajagbawa
Kaduna DISCO – Yusuf Usman Yahaya
“It must be reiterated that some of the publications from the Core Investors of these DISCOs have been quite disingenuous. Beyond the financial issues I have just discussed, the DISCOs affected happen to be the worst performing ones.
“Ibadan is currently being managed by a so-called Receiver Manager as a sole administration. The Receiver Manager has absolutely no capacity to manage a utility and has not been authorised by the Regulator as a manager of a DISCO.
“Ibadan is the worst performing DISCO as per the Performance Assessment review conducted in December 2021. Ibadan DISCO has actually retrogressed in terms of their critical performance parameters as contracted in the Performance Agreement signed with the Bureau. In fact, the DISCO under the management of the Core Investor, Integrated Energy Distribution and Marketing Limited (IEDM), has performed worse than before it was privatized.
“The performance of Benin, Port Harcourt, Kano and Kaduna DISCOs have also been abysmal.
“It is necessary to state categorically that the poor performance of these DISCOs represents a clear and present threat to the power sector as a whole and no responsible government and shareholder, would stand idly by and allow this situation to persist.
“BPE wishes to assure Nigerians that notwithstanding the challenges in the sector, Government remains fully committed to ensuring optimal performance in the power sector and will not shy away from taking the necessary decisive action to achieve this”, it added.
Mr. Okoh explained that the government took action of the BPE and NERC were informed by Fidelity Bank Plc on Tuesday, 5th July, 2022, that a call on the collateralized shares of the Core Investors of Kano, Benin and Kaduna DISCOs had been activated by the lenders. The Lenders’ consortium include AFREXIM Bank, Keystone Bank, Stanbic IBTC, as well as Fidelity Bank.
“It is important to note that the action is a contractual and commercial intervention and is between the Core Investors in these DISCOs and the lenders. BPE’s involvement is to protect the 40% shareholding of the Federal Government in the DISCOs.
“It was on this basis that new boards reflecting this action were constituted as follows:
Kano DISCO: Hasan Tukur (Chairman), Nelson Ahaneku (Member), Engr. Rabiu Suleiman (Member) Benin DISCO: KC Akuma (Chairman), Adeola Ijose (Member), Charles Onwera (Member) Kaduna DISCO: Abbas Jega (Chairman), Ameenu Abubakar (Member), Marlene Ngoyi (Member)
“BPE has nominated Bashir Gwandu (Kano DISCO), Yomi Adeyemi (Benin DISCO), and Umar Abdullahi (Kaduna DISCO) as independent Directors to represent Government’s 40% interest in the aforementioned DISCOs, during this transition”, he stated