The Minister of Power, Adebayo Adelabu, says the government would soon institute investigation into the 5-year licence extension for the 11 Distribution Companies (DisCo) in the country.
Daily Trust reports that the licences of the DisCos were due for renewal this year after the 10 years deal between the federal government and private investors, which allowed for 60 per cent acquisition of shares of the defunct Power Holding Company of Nigeria (PHCN) for the latter in 2013.
The contract had allowed for additional 5 years and another option for 10 years renewal after a review of the performance of the DisCos by the government.
But the Nigerian Electricity Regulatory Commission (NERC) announced last week during the maiden Nigerian Electricity Supply Industry (NESI) conference that the companies got the 5 year renewal to assuage fears of investors losing their money as the sector needed long term investment.
But speaking during an interactive session with journalists yesterday, the minister said it is looking at the legal and contractual basis of the basis.
“The vice chairman of NERC told me that before their tenure, the commission had extended the licences by another five years, the correctness of that, legally and contractually, we are trying to review it and I have ordered an investigation into the extension of the licences if they were in order.
“The licence is not as important as the performance bond that we signed with the private sector operators. In respective of the tenure of the licence, it can be revoked at any time, so it is not very important whether the licence is extended for another decade or not, if you are not meeting the conditions in the performance bond, all I will do is to pay you one dollar and you should walk away to get the licence back from you.”
