Electricity distribution companies (Discos) may soon declare a force majeure, the Chief Executive Officer of one of the companies has confided in the Nigerian Tribune.
A force majeure is a term included in contracts to shield parties from bearing the burden of unavoidable developments which may hinder them from fulfilling contractual obligations.
The CEO, who complained bitterly about the operating environment at the weekend, said, “All of us should declare a force majeure because, given the condition under which we are operating, there is no way we can meet our obligations.”
Last year, the Federal Government had to take over one of the Discos, Yola Electricity Distribution Company, after the core investor, Integrated Energy Distribution and Marketing Company, declared force majeure on six occasions between November 10, 2013 and May 13, 2015, following incessant attacks on its facilities by Boko Haram insurgents.
Justifying the need for the Discos to declare force majeure, the CEO said, “We took loans in 2013 when the exchange rate was N155 to a dollar. Now, it is over N300 to the dollar. How can we pay back our debts?
“Apart from having to pay back debts at a higher rate, we need equipment to run this industry. Nearly 90 per cent of what we need is imported. What makes our own case peculiar is that whenever anything goes wrong, we have to replace immediately. But can we do that if we do not have access to dollar at the official exchange rate?
“The exchange rate is also affecting our corporate customers. In my own case, my corporate customers contribute 60 per cent to my revenue. But now many of them have either closed down or scaled down their operations. If my customers are out of business how am I supposed to generate revenue? How am I supposed to embark on metering? How am I supposed to pay my staff and settle my bills?”
The man said one other factor affecting the conduct of their business which might force them to declare a force majeure was the debt owed the Discos by government and its agencies.
He said, “As of today, federal, state and local governments as well as ministries, departments and agencies owe Discos over N15billion. This is talking only about the debts accumulated between 2013 and now. The government and its agencies owe us so much and they want us to improve our facilities, tell me how can we achieve that?”
On way out, he said the government had to give the Discos special concession concerning access to dollar at the official exchange rate.
“The government has to put us on the priority list for access to dollar at the official exchange rate. We need dollar to repay our debts, we need dollar to source materials. We cannot depend on the black market for dollars. So, the government has to give us a concession. Then, we cannot continue with the government and its agencies owing us in perpetuity. So, let the government make the payment of its electricity bill a priority.”
Source: Tribune
