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Some Power Firm Managers Award Inflated Contracts to Relatives –Fashola

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  • Some Power Firm Managers Award Inflated Contracts to Relatives –Fashola

The Minister of Power, Works and Housing, Mr. Babtunde Fashola, on Monday alleged that the managers of some power distriubtion firms were awarding inflated contracts to their relatives.

He also threatened to sanction the firms for their continued inability to deliver on agreed terms.

While condemning the recent statements by the firms, a visibly angry Fashola declared that the power firms had failed in many aspects.

According to him, allegations of obsolete infrastructure in the power sector by the companies are unnecessary because they were aware of the state of the facilities when they purchased the assets.

The minister, who spoke during the 15th monthly meeting of power sector stakeholders in Jos, Plateau State, also demanded that participants should cast a vote on whether to carry on with the meeting every month or to put an end to it, as he expressed worry over the poor attendance at the forum.

Fashola was particularly pained by the actions of the power distribution companies, who according to him, are bent on frustrating the stakeholders’ meetings, adding that the Discos had failed in providing meters and electricity feeders, as well as remitting very poor revenue to the market and making false allegations against the government, among others.

The minister, who chaired the meeting, also lamented the electrocution of seven persons at a football viewing centre in Calabar, Cross River State recently, and blamed it on man-made errors of the power companies.

“Whilst the accident is regrettable and the consequences very saddening, they were clearly man-made and avoidable; and if we must learn any lessons from the accident, it is to honestly and truthfully admit that it occurred as a result of non-compliance with laws and regulations,” he said.

On how the Discos frustrate efforts of the government, Fashola said the firms had formed themselves into an association of power distribution companies and had persistently issued statements on issues they either did not present for discussion at meetings, or which contradicted the communiqué jointly agreed and released after each meeting.

The minister, however, declared that his ministry reserved the right to recognise or deal with the Discos as a body, adding that the Nigerian Electricity Regulatory Commission and the Nigerian Bulk Electricity Trading Plc would communicate a similar position to the firms.

Picking on the issues raised by the Discos in their statements, Fashola said the firms alleged that attempts to escrow their revenue accounts would amount to nationalisation or an intrusion into their business, but failed to state that the condition was agreed by the firms with Central Bank of Nigeria.

He stated that the agreement between the Discos and the CBN was a condition for the bank to offer the firms stabilisation funds by way of loans to fund the business they invested in because commercial banks were reluctant to do so.

Fashola said, “What you (Discos) also failed to state was that the loan was at 10 per cent interest, which is well below the commercial rate. What you also failed to state is that you also agreed under that arrangement to establish letters of credit to guarantee future payments to the NBET and Transmission Company of Nigeria’s Market Operator, that the agreed commercial terms of the letters of credit authorises the NBET and the Market Operator to draw on the letters of credit for any default in payment to them, and that such defaults have occurred and continue to occur.

“Any right-thinking person will accept the principle that any person lending you money must have the right to know what you are doing with the money, especially when under-collection and underpayment have been a major feature of many Discos’ performance.

“As far as the regulation on your procurement is concerned, what the public needs to know, which your statement was silent on, is that you are entitled to fully recover your costs and investments by law, and this is the function of how tariffs are calculated.”

The minister said the government had 40 per cent stake in the Discos and that it had a duty to ensure that they buy parts and other equipment at reasonable and competitive market prices, and “not through inflated contracts to relatives as we have seen in some Discos in respect of which NERC will take action in due course and sanction those who are involved.”

He added that many of the firms had failed to invest in feeders and distribution equipment to get power to consumers, noting that this had led to load rejection in an economy that did not have enough electricity.

“Your statement does not address the ill-logic of standing in the way of a consumer seeking to get by himself what the service provider has failed or is unable to give him,” Fashola said.

On corporate governance at the Disco level, he stated that the power firms had failed to provide up-to-date audited financial statements as required by their licences.

The minister said, “If a company cannot produce all the records of its transactions and accounts, does that not allude to gaps in its governance? Does the fact that consumers go beyond their service provider who collects the money monthly to complain to government, who does not collect money for their power, not call for a look in the mirror about your corporate governance?

“Good corporate governance will ignite the conscience of an electricity business to first provide meters to its customers before seeking tariff increase, so that a metered consumer will at least have the ability to fairly measure from his meter how he is being billed.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

Once Again The National Grid Collapsed

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Nigeria’s electricity transmission system, also known as the National grid, has suffered another system collapse, plunging Lagos, the country’s commercial capital, Kano and other major cities into a blackout.

The collapse, which occurred about 11.00 am on Tuesday, was confirmed by two of the country’s electricity distribution companies in separate messages to their customers.

“We regret to inform you that the power outage being experienced across our franchise – Kaduna, Sokoto, Kebbi and Zamfara states – is as a result of the collapse of the national grid,” Kaduna Electric said on Twitter.

Eko Electricity Distribution Company Plc, in a text message to its customers, said: “Dear customer, there is a partial system collapse on the national grid. Our TCN partners are working to restore supply immediately. Please bear with us.”

The grid, which is being managed by the government-owned Transmission Company of Nigeria, has continued to suffer system collapse over the years amid a lack of spinning reserve that is meant to forestall such occurrences.

Spinning reserve is the generation capacity that is online but unloaded and that can respond within 10 minutes to compensate for generation or transmission outages.

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Economy

FG Consider Diversification To Generate Revenue

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As revenue from oil nosedives following incessant global price fluctuations, the Federal Government is now channeling efforts to the development of minerals in the mines and steel industry to shore up foreign exchange earnings.

Officials of the Federal Ministry of Mines and Steel Development said on Wednesday that while there had been concerted efforts to develop various minerals in the sector, much emphasis had been placed recently on the development of bitumen, barite and gold.

They told our correspondent in Abuja that the government through the mines and steel ministry was striving to diversify the Nigerian economy away from oil as the major foreign exchange earner for Nigeria.

They also confirmed that large quantities of gold had been discovered in various locations in Zamfara and Osun states.

Asked if the government had initiated programmes to explore the minerals and boost revenues now that the country’s income had plunged, the Special Assistant on Media to the Minister of Mines and Steel Development, Ayodeji Adeyemi, replied in the affirmative.

He said, “Indeed, the ministry has the mandate to generate revenue and diversify the economy through the mines sector.

“And bitumen is one of the key resources which the nation is abundantly endowed with, that has been identified for strategic development.”

To buttress his position, Adeyemi shared some recent presentations of the Minister of Mines and Steel Development, Olamilekan Adegbite, where the minister said his ministry was gathering data on some bitumen fields across the country to attract investors.

“A lot of people are interested in bitumen, which is coming from both local and foreign investors. However, we are still acquiring data in some of the fields,” the minister stated.

On barite, the minister said the mines and steel ministry was working on raising the quality of barite produced in Nigeria to an internationally acceptable standard, as certified by the American Petroleum Institute.

Adegbite said his ministry had contracted a consultant to help raise the standard in the local production of barite to ensure that oil industry players make use of barite produced in Nigeria as against importing the commodity from other countries.

He said, “Barite is a critical weighting material in drilling fluids used in the oil industry. We have a lot of barites but the issue is that it is not produced to API standards. However, we are putting a system in place which would be ready to launch in about July.

“We have got the millers who can produce barite to API standard. Hence we will be able to compete with foreigners and it would save Nigeria a lot of foreign exchange in import substitution.”

On the development of gold, officials at the ministry further stated that the commodity had been aggregated for the production of bullion bars and that this was the first time that such aggregation was happening in Nigeria.

They stated that the gold was sourced from artisanal miners, while the final refining to bullion was done in Turkey.

The sources stated that the ministry had registered two refineries that would now refine to LBMA standard when they come on stream. LBMA is the de facto standard, trusted around the world.

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Economy

Nigeria Sovereign Investment Authority Generates N160.06 Billion in 2020

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Naira Exchange Rates - Investors King

The Nigeria Sovereign Investment Authority (NSIA) generated revenue of N160.06 billion in 2020, according to the latest audited financial reports announced by the Managing Director of NSIA Mr. Uche Orji.

The NSIA income came from devaluation gain of N51 billion, and core income of N109 billion compared to N33.07 billion in 2019.

But Orji lamented: “Covid-19 adversely affected logistics around infrastructure projects, especially the toll road projects and the presidential fertiliser initiative.

Despite the pandemic, the Authority achieved 33 percent growth in Net Assets to N772.75 billion compared to the previous year’s performance of N579.54 billion.

Orji said the NSIA “received additional contribution of $250 million; and provided first stabilisation support to the Federal Government of $150 million withdrawn from Stabilisation Fund last year.”

The same year, the NSIA received $311 million from funds recovered from the late General Abacha from the United States Department of Justice and Island of Jersey for deployment towards the Presidential Infrastructure Development Fund (PIDF) projects of Abuja-Kaduna-Kano Highway, Lagos Ibadan Expressway and Second Niger Bridge.

In response to COVID-19, Orji said: “NSIA partnered the global Citizen, a not-for profit group, to form the Nigeria Solidarity Support Fund. Separately NSIA acquired and distributed oxygen concentrators to the 21-teaching hospital as part of corporate social responsibility; in addition to staffing support to the Presidential taskforce on COVID-19.”

In 2020, the NSIA “invested additional capital into NG Clearing, the first derivative clearing house in Nigeria to maintain NSIA’s shareholding at 16.5 per cent following the company’s rights issue of 2020″ Orji said.

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