20 December 2017, Sweetcrude, Abuja – The Federal Government is willing to sell the Yola Electricity Distribution Company or Yola Disco at a cheaper price compared to how much other power distribution companies were sold during the privatisation process in 2013, SweetcrudeReports has gathered.
According to our source, who claimed anonymity due to the sensitivity of the issue, the government is ready to sell at a cheaper price to free it from involvement in the power activities, which it had left as far back as 2013.
But the source lamented that despite government’s resolve in this regard, it is yet to find any investor interested in operating the utility company two years after the core investors in the company declared a force majeure and handed it back to the government.
Integrated Energy and Distribution Marketing Company, IEDM – the owners of Yola Disco which bought the company during the 2013 Federal Government privatisation of the defunct Power Holding Company of Nigeria assets – had in 2015 returned the company to the government owing to their inability to operate under the reign of terror unleashed by Boko Haram.
According to findings, the investors were unable to access the company’s facilities for business due to Boko Haram insurgency in its area of coverage, which covers Adamawa, Borno, Taraba and Yobe states.
The stated that the government had been experiencing a tough time finding a new buyer even at a giveaway price for which the company is being offered for sale.
“The Boko Haram insurgency has affected the sale. No investors, foreign and even local, are willing to stake their funds there because of the security challenges,” he said.
“The Federal Government is willing to sell it at a cheaper price compared to how much other Discos were sold but, even at that, no one wants to invest in a war-torn zone,” he added.
During the privatisation exercise in 2013, investors had paid $1.4 billion to acquire the Yola and 10 other Discos up for sale by the government.
After a joint evaluation of the electricity assets as stipulated by the Bureau of Public Enterprises, BPE, and the Ministry of Power under the President Goodluck Jonathan administration, a sum of $186 million was agreed to be refunded to Integrated Energy.
However, only $87.8 million was eventually paid to the company as payoff with the government arguing that $186 million was too high. The payoff included 20 percent of five years’ projected profit by the core investors.
After the return of the company to the Federal Government, Mr. Baba Mustapha, an engineer, was appointed to run the Disco in the capacity of an acting Managing Director. Before his appointment, he was a Deputy Director in the Ministry of Power.
Stressing government’s determination to turn the Yola Disco to private hands, the source said, “Privatisation is the best thing that has ever happened to the power sector. So, whenever people keep calling out the Discos for inefficiency, I tell them to compare the kind of services Yola Disco offers to those of the other Discos”.