Vandalism, Lack of Fund Major Challenges Facing Electricity Industry


The Managing Director and Chief Executive Officer, Frontier Oil Limited, an indigenous oil and gas firm, Thomas Dada, said that pipeline vandalism and ill liquidity are the biggest problems confronting the electricity industry.

He stated this in an interview, said though pipeline vandalism had  taken the industry many steps backwards, lack of fund due to huge indebtedness to operators had become worrisome, adding that the government was the biggest debtor.
Dada blamed the electricity distribution companies (DisCos) for the paucity of fund. He said the DisCos neither meter customers properly nor collect bills from them.
In his words, ‘’Operators of the DisCos didn’t do what they promised when they took over those distribution companies. The reality is that many electricity consumers don’t pay for the power they consume.”
Dada further said the transmission segment of the power sector value chain is the weakest. He said the NBET sat on millions of dollars, yet the sector was collapsing. He questioned the reason NBET would not use that fund to rescue the sector, noting that channeling that money into the sector would be fine.
He urged the government to support the power sector for at least 10 years, subsidize it to enable electricity supply become stable. When consumers get used to stable electricity supply, the sector could then come up with a tariff increase.
‘’There is resistance to electricity tariff increase because consumers are getting little supply but paying more. He urged the Federal Government to use the money saved from oil subsidy removal to positively ensure that the power sector is improved meaningfully.
Dada said, “Gas equals power and equals economic growth,” noting that in a country where there is no gas and no power, the economy would break down.
He warned that until gas is adequately produced for domestic use and power generated and distributed properly, the diversification of the economy which is the yearning of the people may be far from being attained.
Dada said the government got it wrong through wrong policies, even those wrong policies were inconsistently applied. Since independence, he said, the country had generated only maximum of five gigawatts of electricity.
“The government has no business running business. The power sector is not a social service, it is a business and it has to be allowed to run as a business. We have to respect sanctity of contracts. We have to keep our words, and not when an investor puts in his money today, tomorrow the rule is changed.”

The Nation


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