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Power firms groan under poor revenue, gas shortage

By BusinessNews Staff on April 5, 2014

Private investors who bought over the electricity generation and distribution assets of the defunct Power Holding Company of Nigeria are bitter over the continuing vandalism of gas pipelines and the refusal of consumers to pay their bills.

According to them, the development has increased their losses and is stalling the growth of the power sector since the handover of the assets to them last November.

Our correspondent gathered on Thursday that the Abuja Electricity Distribution Company, for instance, took its grievances to the Nigerian Electricity Regulatory Commission earlier in the week and complained that it was running at a loss.

It was learnt the AEDC made the commission to realise that despite its efforts and vision to deal with customer complaints after it took over the firm, it had not been making profits.

The Managing Director, CEC Africa, Mr. Michael Tarney, who revealed that the firm was financing the AEDC up to 99 per cent in collaboration with the United Bank for Africa, said gas supply constraints had adversely impacted the distribution company’s revenue.

Tarney, in a document made available to our correspondent by the NERC, affirmed that the Nigerian environment was accommodating to private investors, but frowned on the bottlenecks that had plagued investors since the privatisation of the power sector.

Tarney, said the company was operating at a loss at present due to gas constraints and the challenge of getting paid for power supplied to customers.

He, however, informed the commission that the firm was working to improve the revenue collection mechanism and reduce the losses.

Tarney further said it had not been easy getting the financial support of international institutions as the firm had to show evidence of financial strength to win investors’ confidence.

He noted that CEC Africa and UBA envisaged increased revenue collection in the shortest time.

The Managing Director/Chief Executive, AEDC, Mr. Neil Croucher, stated that the Disco visited the NERC to intimate the commission of its vision in the light of the expectations of electricity customers and the industry at large.

According to him, the company is in the process of establishing a call centre to deal with consumer related issues.

The managing director of a power generation firm wondered why vandalism of gas pipelines had not been checked by the Federal Government.

The official, who pleaded not to be named, told our correspondent that unless the firms get adequate gas supply, the electricity supply woes in the country would persist.

“We are not just running at a loss since we took over, but the country generally is feeling the pains of erratic power supply. And unless something tangible is done to stem vandalism, I am afraid to say that power supply may not improve as we expect, despite the privatisation exercise,” the CEO said.

The Chairman/Chief Executive Officer, NERC, Dr. Sam Amadi, while responding to the presentation by the AEDC, said the involvement of UBA as a debt provider was highly commendable, but cautioned the company not to fail in its duty as this might in turn affect the bank adversely.

[Punch]

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