States, LGs Owe Larger Chunk of N90bn MDAs Debt to Discos

The Minister of Power, Works and Housing, Mr. Babatunde Fashola, has said that states and local governments, not the federal government owe the larger parts of the Ministries, Departments and Agencies (MDAs) debts the 11 electricity distribution companies (Discos) have frequently claimed.

Fashola, stated that out of the about N90billion the Discos have often said was owed them by government MDAs, the federal government’s share of it has been verified to be just N27 billion, with the balance owed by states and local governments.

He stated this at the just concluded annual National Council on Power (NACOP) which held in Jos, the capital of Plateau state.

According to him, “Out of the estimated MDA debts of about N90 billion claimed by the Discos, only about N27 billion has been verified as debts owed by the FGN. There are invoices which show that other parts of the debt are attributable to service points at states and local governments.”
He then urged the states and local governments to meet up with the Discos and work out a debt repayment plan, as against threats issued to the Discos.

The minister equally asked the states and local governments to request from the Discos that meters be installed at their service points to allow for precise and economic use of electricity.
This, he noted would keep the Discos in operation, as well as sustain electricity supplies to the MDAs of the states and local governments.

“I will urge first that states and local governments insist that their buildings are metered so that they can budget for and pay for energy they use. It will turn out to be cheaper than diesel generated power. It will also help reduce loss of income by Discos.

“Furthermore, I urge state governments to set up small teams with audit capacity to verify debts owed by them and their local governments, ascertain the quantum and develop a payment plan which can then be budgeted for. This will help to reduce the liquidity issues and contribute to the reforms,” he said.

Calling on states and local governments to show more interests in the power sector, Fashola said: “More importantly the challenges of inadequate power manifests itself in households, businesses, service centres and other points of need that are located in states and local governments. Therefore, the impact of insufficient power is manifest at municipal level and so will be the benefit of improved power.

“Therefore, it is only logical and necessary for states and local Governments to own and participate in the implementation of the 2005 Law and the PSRP.”
“Therefore instead passing votes of no confidence on the Discos who serve them, I will urge that they take a more important role of engagement and consultation to help the Discos serve them better. Communities and states who want to see improved power must also sacrifice and contribute some of their land for this service to be provided.”