We shall meet in court, Fashola tells GenCos
Fresh crisis is looming in the power sector, and this time the theater will be at the Federal High Court, Abuja, as the Federal Government says it is ready to slug it out with GenCos, accusing them of blackmail and holding citizens hostage.
Following the decision of the Federal Government to grant Azura Power a guarantee deprived other GenCos, thereby prioritising the settlement of its obligations to Azura IPP from the N701 billion fund, BusinessDay exclusively reported last week that five power generation companies including Egbin, Transcorp, Mainstream and two others have instituted a suit against the government.
Babatunde Fashola, minister of power, works and housing, at the 25th monthly power sector operators meeting held in Uyo yesterday, which excluded many of these GenCos, seemed to tell them to bring it on.
“They must explain to this public court whether they went to court before government approved a N701 Billion payment Assurance Guarantee to pay their monthly power bills. They must disclose to this court that they owed debts, from the pre-Buhari era, because their income had reduced to less than 50%.
“They must disclose to this court that they now receive about 80% income, and that this Government is now paying them revenues collected from international customers from the Republics Benin, Niger and Togo, in Dollars, as against the Naira payment they used to receive.
“In both courts, they must disclose how they felt when some DisCos went to court to stop the enforcement of Provision of Promissory Notes, which was a condition that denied them access to the CBN NEMSF low interest loans.
“They must tell the court of public opinion that the reason for going to court is because Government is making 100% payment to a new GenCo who has a different contract with a Partial Risk Guarantee, which they do not have.
“They must also disclose to both courts that they held a meeting with Government and tabled their demands, which Government promised to look into one week before they went to court.
‘They must, in good conscience, tell the two courts whether one week was enough time, to go to court and whether this action at the time when the sector is making progress does not suggest an intention to blackmail Government and hold the citizens hostage,” Fashola said.
BusinessDay contacted Joy Ogaji, executive secretary of the Association of Power Generation Companies (APGC), a non-profit and non-political organisation that represents generation companies, for reaction to the minister’s speech, but she declined comment, saying it was inappropriate to comment on a matter before a court.
The decision to pay Azura from the N701 billion guarantee was taken to forestall a possible default by the Nigerian Bulk Electricity Trading (NBET) of its obligation to pay for power supplied to the national grid in December by Azura. But the generation companies are concerned that not only is Azura getting favourable treatment, it would now happen at their own expense.
A source with knowledge of the Federal Government deal with Azura told BusinessDay that Azura was paid the sum of $100,000, as settlement for the test power it sent to the national grid in December.
According to the source, the payment was made in two tranches and the delay experienced was as a result of internal process and approvals required to effect the payment.
Azura IPP had said in a December release that, “The sums involved are relatively small, the symbolism of this will be noted by investors around the world and will, no doubt, help to boost the Nigeria’s credit rating during the first quarter of next year.”