The businesses asserted that the government broke its pledges to provide a N100 billion subsidy and other privatization initiatives since 2013.
The federal government’s proposal to restructure the nation’s power distribution businesses has been opposed by the Association of Nigerian Electricity Distributors (ANED).
It further stated that the government had broken its 2013 commitments to provide a N100 billion subsidy and other privatization initiatives.
Sunday Oduntan, the executive director for research and advocacy, revealed in a statement.
At least five DisCo enterprises, including those in Abuja, Benin, Ibadan, Kaduna, and Kano, were taken over by the banks from which they had borrowed money when they failed to turn a profit.
Stakeholders said the current situation might make the industry’s difficulties worse, citing an alleged breach by BPE and NERC, a few days after NERC proposed a contract-based power market.
According to both NERC and BPE, the majority of the equity in the enterprises will be sold to knowledgeable investors in the private sector who will re-capitalize and effectively run the companies.
The National Mass Metering Program is one of the market efforts now under process that the government claimed to have confirmations that Fidelity Bank would actively participate in.
However, the organization asserted that the Bureau of Public Enterprise (BPE) and Nigerian Electrical Regulatory Commission (NERC), acting on behalf of the government, are responsible for the collapse of the electricity sector by failing to “meet existent standards and regulations.”
The “restructuring” of the five electricity distribution firms, according to Mr Oduntan, gives the utility companies serious concern because the action “is inconsistent with all the guidelines and processes necessary to comply with the framework of privatisation agreements and the rule of law.”
According to the announcement, the Federal Government has indirectly or directly renationalized the DisCos as a result of the action.
“Not only were the investors short-changed because of insufficient and unreliable data that was provided by BPE to them during the privatisation process, but the government also committed to and failed to deliver on DisCos’ debt-free financial books, payment of Ministries, Department and Agencies (MDA) electricity debts and N100 billion subsidy,” he said.
“For a correct understanding of the performance issues, the DisCos have encountered since privatization, such renationalisation or expropriation must be seen in the historical context that it requires.
“Fundamentally, the basis of privatisation was flawed from the beginning, due to conditions that were not met by the Federal Government, while expecting the DisCos to meet their performance obligations,” he said.