Enugu Disco: Court to settle ownership claims of Aba, Ariara business units

Aba Power Limited and Geometric Power Limited are at the Federal High Court, Abuja to excise the ring-fenced islands at Aba and Ariaria from the entire Enugu Electricity Distribution Plc (Enugu Disco) on the basis of lease agreement between the Federal Government, Aba Power Limited and Geometrics.

Aba Power and Geometric Power Limited recently dragged the Bureau of Public Enterprises (BPE) to the court, claiming ownership of the Aba and Ariara Business Units of the Enugu Disco and sought to restrain the BPE from listing the two business units among government-owned companies slated for privatisation.

Aba Power claimed that it signed an agreement on April 28, 2005 with the National Electric Power Authority (NEPA) which leased all its assets at Aba and Ariara to Aba Power.

But Interstate Electrics Limited, winners of Enugu Disco following recent privatisation of PHCN successor companies, has affirmed that the Aba area – Owerrinta, Osisioma, Ogbor Hill, Factory Road, and Port Harcourt Road in Aba, Abia State – with its assets is an integral part of the Enugu Disco coverage and cannot be excised, saying that the Electricity Power Sector Reforms Act of March 11, 2005 had stripped NEPA of the authority to negotiate or enter into any agreement for the lease or transfer of the power distribution assets to any third party including Geometrics and Aba Power.

In a suit instituted by Aba Power Limited and Geometrics Power Limited against BPE seeking for the enforcement of the said agreement, Interstate Electrics Limited is seeking to be joined as an interested party.

In its counter affidavit in opposition to originating summons dated February 20, 2013 deposed to by Onochie Anyaoku, Interstate Electrics stated “that the legislation that currently governs the electricity industry in Nigeria is the Electric Power Sector Reform (EPSR) Act, 2005, which came into force and effect on March 11, 2005; that the lease agreement of April 28, 2005, that purported to grant the plaintiffs the power to distribute electricity within the areas specified in the lease (the ring-fenced islands) was made at a time when the plaintiffs did not possess an electricity distribution licence, contrary to the provisions of Section 62(1) and (5) of the EPSR Act.”

The company said the plaintiffs only obtained an electricity distribution licence on December 7, 2006, when by the provisions of Clause 4.1.1(a) of the purported lease agreement, the plaintiff was supposed to commence electricity distribution within the ring-fenced islands not later than 12 calendar months from April 28, 2005, adding that the purported lease agreement of April 28, 2005 was made after NEPA had ceased to exist sequel to the repeal of the NEPA Act (as amended) by Section 99 of the EPSR Act and that the purported supplemental agreement dated August 31, 2006 was not executed by BPE and the Ministry of Finance Incorporated, the two shareholders and owners of Enugu Disco as provided under Section 9 of the EPSR Act.

According to Anyaoku, the transaction between BPE and Interstate is the sale and purchase of 60 percent shares in Enugu Disco, and not the sale of the company’s distribution equipment or other assets and “that all the assets, including those within the ring-fenced islands at Aba and Ariaria, still belong to Enugu Disco.”

Enugu Disco is one of the successor companies created to take over the assets and liabilities of the initial holding company within Enugu coverage areas and environs including Aba.

It was gathered that Aba Power Limited, prior to instituting the above suit, participated in bidding for Enugu Disco but lost out to Interstate Electrics Ltd.

“Negotiation may have allegedly commenced between officials of NEPA and Aba Power in 2004, but unfortunately for Aba Power Ltd, before the conclusion of the said negotiation for the gratuitous ceding of Aba distribution networks and assets of NEPA to the promoters of Aba Power, the National Electric Power Authority Act 1990 (as amended) was repealed by the Electric Power Sector Reform Act, 2005 which came into operation in March 11, 2005”, an official of Interstate Group explained.

Enugu Disco was incorporated on November 8, 2005 and licensed to distribute electric powers in Aba, Abakaliki, Awka, Enugu, Onitsha, Owerri, Umuahia and environs.