Published On: Mon, Nov 13th, 2017

YolaDisCo sale stalled as no potential buyers emerge

By ADEBAYO OBAJEMU

Two years after the core investors of the Yola Electricity Distribution Company, YolaDisCo, declared a force majeure owing to their inability to operate under the reign of terror unleased by Boko Haram, the Federal Government is yet to find any investor interested in operating the utility company, it has been learnt.

In 2015, owner of YolaDisCo, the Integrated Energy and Distribution Marketing Company, IEDM, had returned the company to the Federal Government.

According to findings, investors were unable to access the facility for business due to the Boko Haram insurgencies battling the state.This, by implication, brings the number of DisCos privately operated to 10 instead of 11.

According to our source who claimed anonymity due to the sensitivity of the issue, the government has been experiencing a tough time finding a buyer even at a giveaway price for which the company is being offered for sale.

“The Boko Haram insurgency has affected the sale. No investor, foreign and even local is willing to stake their funds there because of the security challenges,” he said.

“Federal Government is willing to sell it at a cheaper price compared to how much other DisCos were sold but, even at that, no one wants to invest in a war torn zone,” he added.

During the 2013 privatisation round, investors had paid $1.4 billion to acquire the 11 DisCos.

After a joint evaluation of the electricity assets as stipulated in the Bureau of Public Enterprises, BPE, and the Ministry of Power under the President Goodluck Jonathan administration, a sum of $186m was agreed to be refunded to Integrated Energy.

However, $87.8m was eventually paid to the company as payoff on the premise that $186m was too high.  The payoff included 20 percent of five years projected profit by the core investors.

After return of the company to the Federal Government, Mr. Baba Mustapha, an Engineer was appointed to run the DisCo in the capacity of an acting Managing Director. Before his appointment, he was a Deputy Director in the Ministry of Power.YolaDisCo covers Adamawa, Borno, Taraba and Yobe states.

When BusinessHallmark inquired whether YolaDisCo’s performance is better now that it is being operated by government compared to its counterparts being operated by private owners, our source replied with an emphatic “no”.

“Privatisation is the best thing that has ever happened to the power sector. So whenever people keep calling out the DisCos for inefficiency, I tell them to compare the kind of services YolaDisCo offers to those of the other DisCos”.

“Yes! Because what we have currently are perfect examples of YolaDisCo owned and run by government, versus the other 10 DisCos owned and run by private companies. So people can now compare their services and judge for themselves. YolaDisCo is doing far worse in terms of services and metering their customers. This vindicates the DisCos whenever people argue whether or not privatisation has paid off,” he said.

Following clamours from different quarters for government to reclaim the power sector, the Minister of Power, Works and Housing, Mr.BabatundeFashola, has consistently said there is no going back on privatisation.

On the part of the DisCos, lack of access to foreign exchange, absence of cost reflective tariff, energy theft, low revenue collection, high running cost, inadequate gas supply, among others, are some of the challenges inhibiting effective performances, including meeting up with the metering plan.

© 2017, Hallmarknews. All rights reserved. Reference and link to this site is required if you wish to reuse any article.

Reactions from Facebook

comments and opinions

Leave a comment

XHTML: You can use these html tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Most Shared

Recent posts

  • China offshore oil coy to invest $3bn in Nigeria

    The China National Offshore Oil Corporation (CNOOC) is to invest an additional three billion dollars in its existing stakes in offshore oil and gas operations in Nigeria. Mr Ndu Ughamadu, the Nigeria National Petroleum Corporation (NNPC) spokesman said this in a statement on Sunday in Abuja. Ughamadu said Mr Yuan Guangyu, the Chief Executive Officer […]

  • Ecobank risk assets deteriorate as Kie bows out

    By FELIX OLOYEDE The exit of Ecobank Nigeria’s erstwhile Managing Director, Charles Kie, has raised a groundswell of speculation in the financial community as sector analysts believe that his exit was abrupt, untimely and suspicious. Over a period of two years, Kie had succeeded in reversing the banks bedraggled balance sheet and profit and loss […]

  • Blood, blood everywhere: Herdsmen, rustlers on the rampage

    –  Violence, a well-articulated plot to grab land – Expert  By AYOOLA OLAOLUWA Nigeria is gradually descending into a Hobbesian state with the growing killings in the Middle Belt, in addition to the destruction of lives and properties in the North West and Boko Haram insurgency in the North East. Defenseless citizens are being killed like […]

  • 2018 budget in jeopardy

    . Delay alone has reduced performance by 13% – Experts By UCHE CHRIS In all likelihood the 2018 budget will end like the three previous budgets of the President Buhari administration: a failure. Having been passed seven months after its presentation and half year gone; and with all the controversies surrounding its passage by the […]

  • MTN to miss market listing target

    By OKEY ONYENWEAKU A weak domestic economy in Nigeria may force telecommunications giant MTN to shift its earlier proposed August 2018 date for a local listing on the Nigerian Stock Exchange (NSE). Analysts believe that the date shift will allow the parties to the Offer plan a more successful listing arrangement that would guaranty full […]

  • APC crises widen: Amaechi battles for relevance, Modu-Sheriff is new strongman

    By OBINNA EZUGWU Key actors in the ruling All Progressives Congress (APC) managed to keep up appearance to allow for a smooth transition at the party’s recently held national convention. Except for the exchange of blows among Imo and Delta States delegates, the convention was largely a success. But beneath the facade of orderliness, tensions […]

  • INEC declares Fayemi governor-elect in Ekiti

    The Independent National Electoral Commission (INEC) has declared Kayode Fayemi of the All Progressive Congress (APC) winner of the Ekiti Governorship Election held on Saturday. INEC’s Chief Returning Officer for the election, Professor Idowu Olayinka declared the result on Sunday. According to the Returning Officer, Kayode got 197,459 votes to defeat the Deputy Governor of […]

  • President Muhammadu Buhari said on Wednesday that Nigeria will soon sign up to a $3 trillion African free-trade agreement. Nigeria is one of Africa’s two largest economies, the other being South Africa. Buhari’s government had refused to join a continental free-trade zone established in March, on the grounds that it wishes to defend its own […]

  • PDP meets Obasanjo for advice on how to beat Buhari in 2019 polls

    The National Working Committee (NWC) of the Peoples Democratic Party(PDP) will meet with former President Olusegun Obasanjo in Abeokuta on Saturday to seek advice on how to achieve victory in the 2019 polls and beat incumbent Muhammadu Buhari. The National Chairman of PDP, Uche Secondus, made this known in Abeokuta while addressing journalists after a […]

  • GTBank Launches Social Impact Challenge, Aims to Fund Community Development Projects Nationwide

    Following more than two decades of consistent investment in community development, Guaranty Trust Bank plc is taking its Corporate Social Responsibility (CSR) another step further by launching a Social Impact Challenge that will fund dozens of innovative ideas designed and executed by members of the general public. Tagged #SimpleChangeBigImpact, the Social Impact Challenge invites individuals […]

  • Akpobome gives indigent girls educational lifeline

    Akpobome gives indigent girl The hope of indigent girls who have been struggling with their education has been rekindled as Mrs. Mary Akpobome, former executive director, Heritage Bank and her husband,  Mr. Atunyota Akpobome, fondly called Alli-Baba have jointly floated The Purple Girl Foundation with the purpose  of helping them live their dreams. Giving reasons […]

  • Buhari’s NLNG signature project back on track

    President Muhammadu Buhari has congratulated the board, management, staff and shareholders of the Nigerian Liquefied Natural Gas company (NLNG), the NNPC and other Joint Venture partners, Shell, Total and AGIP on the signing of the contracts for the Front End Engineering Design (FFED) of Train 7 of the Nigeria Liquefied Natural Gas Project. The President […]

  • Buhari creates unit to snoop on illegal money transfers

    President Muhammadu Buhari has signed the Nigerian Financial Intelligence Unit bill (NFIU) 2018 into law, creating a body that will henceforth monitor illegal money transfers and money laundering. The Senior Special Assistant to the President on National Assembly Matters (Senate), Sen. Ita Enang, confirmed this development while briefing State House correspondents in Abuja on Wednesday. […]

  • NCC wades into MTN’s labour issues

    The Nigerian Communications Commission (NCC) on Monday said the organisation has opened talks with critical stakeholders on MTN’s labour issues. Mr Tony Ojobo, NCC’s Director of Public Affairs, made this known in a statement by in Abuja. “NCC under the leadership of Prof. Umar Danbatta has opened talks with other critical stakeholders  through the office of […]

  • Weak purchasing power responsible for slowing inflation rate, says Chukwu

    FELIX OLOYEDE The continuous decelerating inflation rate in the country was largely due to weak purchasing power amongst Nigerians, said Johnson Chukwu, Managing Director, Cowry Asset Management Ltd. Speaking on the theme: “Economy: H1 2018 review and prospect for year end” at the second edition of the Bloomberg Media Initiative Africa (BMIA) Cohort 4 quarterly […]

  • Global outrage grows over incessant herdsmen killings

    …there is anarchy in the land – Utomi   By OBINNA EZUGWU The incessant killings in Nigeria by Fulani herdsmen seem to attracting more global attention as U.S. and U.K. have taken the government to task to stop it. During his recent visit to the U.S. by President Buhari, American President Donald had expressed concern […]