FG to review performance of DisCos in 2019

The Bureau of Public Enterprises (BPE) says it will embark on a final performance review of the electricity distribution companies (DisCos) by 2019.

In a statement, Alex Okoh, director-general of BPE, said apart from the Kaduna DisCo, 11 DisCos will undergo the review in order to evaluate the achievement of the agreement signed with the federal government in August 2013.

He added that the agreement which became effective on the January 1, 2015 will be in its fifth year by December 31, 2019, when the final review will be done.

Okoh said the terms of the performance agreements provide for a five-year tenor which the core investors in the DisCos were expected to fully achieve far-reaching efficiency improvement targets.

“That pursuant to the successful conclusion of the privatisation transaction for 10 of the Discos, the utility companies were handed over to the core investors on the 1st of November, 2013,” the statement read.

“The associated performance agreements signed in August 2013 provided, among other performance indices, that the core investors covenanted to achieve agreed reduction targets of aggregate technical, commercial and collection losses.

“That due to lack of adequate technical information relating to the state of the infrastructure at the time of concluding the transaction, the base level of losses in the utilities imputed in the performance agreements were based on provisional estimates. That the terms of the performance agreements provide for a five-year tenor during which the core investors in the Discos are required to fully achieve far-reaching efficiency improvement targets.

“The performance agreement further provides that a study to establish the baseline level of aggregate technical, commercial and collection losses for the performance measurement will be carried out by the Discos within one year after takeover and the outcome presented to the Nigerian Electricity Regulatory Commission for approval.

“The approved loss level shall form the basis of determining the performance of the core investors by the BPE and subsequent tariff computation by NERC.

“In this regard, we wish to clarify that the five-year performance agreement for all the electricity distribution companies, with the exception of the Kaduna Disco, became effective on the 1st of January, 2015 and the fifth year anniversary for final performance review would therefore be the 31st of December, 2019.

“The bureau wishes to assure the public that the relevant agencies of government are conducting a periodic review of the performance of the Discos under the management of the core investors with a view to evaluating the achievement of the terms of covenants agreed with the Federal Government well ahead of the December 2019 dateline.”