A Review of the Nigerian Energy Industry

Presidency directs NERC to resolve Geometric, Interstate dispute

nerc130 June 2014, Abuja – President Goodluck Jonathan has directed the Nigerian Electricity Regulatory Commission (NERC) to resolve the dispute between Geometric Power Limited and Interstate Electrics Limited over the lease agreement signed by the federal government and Geometric  power on April 28, 2005.

The agreement gave the power firm the exclusive right to distribute electricity to the rind-fenced residential and commercial consumers at Aba, Abia State, THISDAY has learnt.

THISDAY gathered that following the directive by the president, NERC had concluded plans to conduct a public hearing in July 2014 to enable the public and all the parties in the dispute to present their positions.

A source at NERC told THISDAY at the weekend that the disagreement between Geometric and Interstate, the new owners of Enugu Electricity Distribution Company over the 141megawatt-capacity Aba Power Project was a regulatory issue that falls within the mandate of NERC.

He disclosed that the failure of the federal government to abide by the lease agreement during the privatisation of Enugu Disco resulted from the apparent failure of Geometric to remind all the stakeholders involved in the privatisation of the subsisting agreement.

“The agreement is clear and unambiguous. When it was consummated in 2005, the federal government had already envisaged the privatisation of the power sector. So, the agreement provides that in the event of privatisation, Geometric shall be given the right of first refusal for the acquisition of Aba as a separate power entity from Enugu Disco. But when the privatisation took place, Geometric apparently failed to present the agreement to exercise its right. If they had presented the agreement, the government would have just asked them to match the highest bidder and take the assets. It is as simple as that. So, the fault is from both the government and Geometric,” he said.

But a source close to Geometric told THISDAY that the power firm wrote six letters to the Bureau of Public Enterprises (BPE) between 2006 and 2013, and a caveat emptor published in some national dailies, calling the attention of the bidders and other appropriate authorities to the agreement.

The source further stated that some of these letters were “dutifully” given to the bidders by BPE before the payment for the assets were made, adding that several meetings were also held and phone calls made.

“Some of these letters were given to each of the prospective bidders for Enugu Disco by the BPE itself under the leadership of Bolanle Onagoruwa in October 2010 when Expressions of Interest (EoI) were called. Some BPE top officials with vested interest have deliberately been misinforming the NERC leadership.  Some people in the BPE leadership are up to mischief and sabotage against electricity development in the country because of their personal pecuniary gains. They have even indulged in open disinformation as distinct from misinformation,” the source said.

When contacted, the Chairman of NERC, Dr. Sam Amadi, confirmed the plan by the regulatory body to hold a public hearing on the matter next month.
Amadi also confirmed that President Jonathan had directed the agency to intervene and ensure quick resolution of the dispute.

“The president has directed NERC to resolve the matter because of the confidence he has in the agency. For the president to ask us to resolve such matter between the two giants shows that he has confidence in us. NERC is adjudged the most transparent regulatory agency and we will resolve the matter from the regulatory point of view and not based on sentiment,” he said.

Following the success he recorded in 2001 in the implementation of a 22megawatt-capacity emergency power plant servicing some areas of the Federal Capital Territory (FCT), a former Minister of Power, Prof. Bart Nnaji commenced the Aba Integrated Power Project, consisting of distribution and generation infrastructures.

The Geometric Power Limited, operators of the Aba power project signed a Memorandum of Understanding (MoU) with the federal government to build the 141megawatt-capacity power plant in Aba in 2004.

Geometric in 2005 also signed the Aba concession agreement, with the defunct National Electric Power Authority (NEPA), which gives Geometric the right to lease NEPA’s distribution facilities in the area to distribute electricity in the ring-fenced Ogbor Hill, Osisoma, Factory Road, Port Harcourt Road and Owerrinta, all in Aba.

Before the emergence of Interstate as the new owners of Enugu Disco, Geometric had completed the 141mw capacity power plant; built four new substations, new distribution lines, and also rehabilitated another three old substations built by the defunct PHCN.


– This Day

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