DisCos Under AMCON Management Won’t Benefit Consumers — Ex-NERC boss, Amadi

Former Nigerian Electricity Regulatory Commission (NERC) Chairman, Dr. Sam Amadi, yesterday cautioned against the management of electricity distribution companies (DisCos) by the Asset Management Company of Nigeria (AMCON).

He doubted if service delivery to consumers could improve under such arrangement.

Speaking with The Nation, Not TheNigeriaLawyer on the telephone, he insisted that the primary motive of the banks is to recover its loans to the DisCos.

According to him, the only way for consumers’ efficiency in the situation is for the new management to engage those that are technically capable to run the entities.

AMCON at the weekend took over Ibadan Electricity Distribution Company (IEBDC) for the latter’S failure to repay its loan.

Abuja Electricity Distribution Company is also in loan default with United Bank of Africa.

Asked to respond to how the consumers would benefit from the situation, Amadi said: “At this level it is very difficult to see anywhere much improvement will come from. AMCON is not electricity suppLying agency.

“Yes they may keep the same management but their bottom line is to recover their money. So, I don’t see much improvement for electricity consumers except AMCON hands to a much more technically capable operators and may be able to invite its share investors who have the experience to finance and the competence to do change management effectively.”

On the DisCos, he noted that the DisCos are going bankrupt.

He noted that some of them are finding it difficult to repay their loans.

He blamed the situation on the entire value chain in the power sector.

According to him, some of the challenges are due to inefficiencies.

His words: “There is no doubt that the DisCos are financially distressed. They were going through hard financial times. They were over leveraged so they are struggling to service their debts.

And compounded by failure in the value chain in terms of payment of revenue arising from customers paying, in terms of public offices owing commitment.

“So, the other inefficiencies in the value chain compound their crisis. They don’t have deep financial capabilities to finance short term and recover long term.

“And of course, they don’t have the financial capabilities to engineer quick turnover around of their operations. So, they are in almost like bankruptcy.

“The banks are taking over and may likely do so because the banks are through AMCON trying to recover their money by taking over the assets so they can manage them better or to guarantee themselves their asset is secure from the money they lent to those companies.”

Meanwhile, the spokesman of the Nigerian Electricity Regulatory Commission (NERC) Dr. Usman Arabi who The Nation called on phone to comment on the matter said he was on leave.

Besides, the IBEDC) yesterday urged its staff to maintain status quo.