A Review of the Nigerian Energy Industry

Nigeria: Govt, Discos bicker over stalled N46bn electricity meter contract

Electricity metres
Electricity metres

15 May 2015, Abuja – There are indications that the Federal Government and the Electricity Distribution Companies (DISCos) are at loggerheads over a contract for the supply of three million pre-paid meters awarded in 2003 which is now revived to involve the power companies.

The contract was awarded to Messrs. Ziklagsis Netwrok Ltd, ZNL, and Messrs Unistar Nigeria Ltd to be executed within five years, but ended in litigations after supplying only 36, 960 units of the meters.

President Goodluck Jonathan’s administration recently intervened to end the litigations thereby directing the DISCos to participate in the project.

Source close to the contract said efforts by the presidency to involve the DISCos in the deal failed as the companies refused to buy into it after a meeting at the Villa.

The source said all the DISCos have been summoned by the presidency to sign some documents in the deal but they refused.

The companies argued that they already have their separate plans to procure meters for their customers.

The two contractors were to manufacture, supply, install and maintain the meters on behalf of the various distribution companies but the contract soon ran into difficulties “due to consistent failure by the government” to make funds available, a source familiar with the deal said.

The contractors sued the government for breach of contract, alleging it had refused to pay for the meters as they were supplied.

However, the contractors withdrew the cases following a request by the government in favour of an out-of court settlement.

Part of the deal was for the government to pay about N10 billion for the 753,002 meters to be acquired and distributed to DISCos for onward installation to customers.

The sources said the Federal Government was just desperate to pay the N10billion because at the moment the 753,002 meters are not available in warehouse.

In December last year, the President approved the proposal to raise N46.17 billion for the project from various sources.

These include $200 million (N32 billion) Eurobond facilitated by the Debt Management Office (DMO) and proceeds from the sale of government built power plants (N14.17 billion) to be used to finance the project.

When contacted, the Minister of Finance and Coordinating Minister of the Economy, Mrs Ngozi Okonjo-Iweala through her spokesperson, Mr Paul Nwabuikwu said she was not aware of the deal and referred our reporter to Ministry of Power for details.

The Permanent Secretary, Federal ministry of Power, Ambassador Godknows Igali when contacted said the meters are still on procurement. “In procurement, you must follow due process,” he said.

He said President Jonathan through his Vice President Mohammed Namadi Sambo had to set up a committee and they brought a recommendation on how the contractors can be mobilised to supply the meters.

Igali said: “That approval and funds have been gotten early this year and they are intact; but nobody can touch it until the procurement process with the Bureau of Public Procurement (BPP) is completed.”
*Hamisu Muhammad, Yunus Abdulhamid And Simon E. Sunday – Daily Trust

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