Controversy has trailed the actual Federal Government’s debt profile to electricity generating companies (Discos) in Nigeria. While the Discos had collectively claimed that the Federal Government owes them over N400 billion for electricity generated, the Minister of Power, Works and Housing, Babatunde Fashola, said government was only able to verify N27 billion.
Speaking at the 19th monthly power sector stakeholders meeting yesterday in Lagos, Fashola said that instead of claims in excess of N90 billion submitted as owed by the Federal Government, only about N27 billion has been established by verification.
Reacting to the claims by Managing Director of Egbin Power Plc, Dallas Peavey, that the Federal Government is indebted to the company to the tune of N125 billion, Fashola, said that only N27 billion could be verified.
Peavey had told the United State delegation to Egbin Power Plant that the company was facing financial difficulties with the Federal Government owing N125 billion.
Citing media reports Fashola said Peavey told the visiting U.S. senators that Government owed them N125 Billion and that Egbin Power Plant could not evacuate 700 MW of power because of TCN (Transmission Company of Nigeria) failure to provide the capacity to do so.
In trying to put the record straight, the minister said, “I am compelled to use this platform to respond to these allegations. Let me start by saying that Peavey did not tell his visitors how that N125 Billion was made up. He did not also tell them that Ministries Department and Agencies (MDAs) debts owed to Discos had been verified and instead of claims in excess of N90 billion submitted as owed by the Federal Government, only about N27 Billion has been established by verification.
He did not tell his visitors that resolutions of debts are topical views of our agenda at these monthly meetings and minutes of our discussions as recently as the last meeting in Kano on August 14th 2017 are kept”
Continuing, he said: “He did not tell his visitors that Government has approved a payment assurance guarantee for all power produced to the grid and that some payments have been made and others are being processed as reported at the Kano meeting and the Abuja meeting in July 2017.He did not tell his visitors that his company either knew of these debts when his employers bought the plant or failed to do the due diligence that will have disclosed it to them. He also did not tell them that the Ministry of Finance has announced a programme to issue promissory notes for inherited debts subject to Parliamentary approval”.
According to him: “So, we know that when Mr. Peavey told his visitors that his employers could not evacuate 700 MW from Egbin Power Plant, and blamed TCN he was lying at worst or at best was being bombastic.
“We know because this Government is constantly working to maintain records, accurately and transparently in the power and other sectors.”Fashola argued that on the 2nd September 2017, around the time when the news was reported, Egbin’s peak power production was 344 MW (and the average power production was 336 MW). This is less than 50% of the 700 MW in the report credited to Mr. Peavey that his company could not evacuate, adding “We know that Egbin has 6 (SIX) turbines of 220 MW each, with an installed capacity of 1,320 MW, It was the first power plant I visited when I was appointed Minister. We know that three turbines, ST 1, ST 5 and ST6 are not functional. ST 6 for undisclosed faults and ST 1 and ST 5 for maintenance. So Egbin Power Plc was not producing 700MW at the time”.
He said Peavey should have told his visitors that TCN’s wheeling capacity has exceeded over 6,500MW. “As if these were not enough, my attention has been brought, to allegations to the effect that Mr. Peavey is inciting other GenCos to refuse to comply with grid codes and regulations made pursuant to the Electric Sector Power Reform Act of 2005 prescribing frequency levels of operation for power generating companies.
“While we do not know why Peavey is acting contrary to our national interest, we also know that he has been in and out of Nigeria and came in on 17thAugust 2017 without a record of visa issuance on arrival” he said.
“Based on that the minister said he has directed that the matter be referred to the Immigration department for advice on his legal status vis-à-vis a valid visa and work permit. I expect that appropriate action will be taken.”
He implored stakeholders to co-operate with NERC to fast-track the completion of the Regulations for metering service providers and eligible customers, saying “They will ultimately help us to distribute over 6,000 MW of Power that we now have available, out of which we are only able to distribute about 4,000 MW because of problems at the distribution end”.