The Managing Director, Transmission Company of Nigeria (TCN), Usman Mohammed, has raised concern over the lack of return on investment on companies in the power sector.
Mohammed, who spoke at the Manufacturers Association of Nigeria (MAN) interactive forum on eligible customers regulation, said the Federal Government invested N1.5 trillion to support the companies, but the investment can be equated to water in the basket.
He said there’s a need to be worried over the lack of returns on investment, especially as the Government intends to disburse yet another N500 billion to the electricity distribution companies.
“WE SHOULD BE WORRIED ABOUT WHAT IS GOING ON IN THE NATION’S POWER SECTOR. VERY SOON, WE ARE LIKELY TO CREATE A BIG SLUSH. WE HAD IT WITH AMCON AND OIL SUBSIDY, WE ARE ABOUT TO HAVE IT IN THE POWER SECTOR.
“REMEMBER WE GIVE THE POWER SECTOR SUPPORT UNDER THE N300 BILLION CBN POWER INTERVENTION FUND; WE HAVE DONE N701 BILLION GUARANTEE PAYMENTS, GOVERNMENT IS ABOUT TO DO ANOTHER N600 BILLION UNDER THE POWER RECOVERY PLAN AND THERE IS ANOTHER DISCUSSION ON N500 BILLION DISTRIBUTION SUPPORT.
“THIS IS WORRISOME FOR THE INDUSTRY THAT IS PRIVATIZED AND GOVERNMENT IS RELEASING THIS KIND OF MONEY, IT DOESN’T MAKE BUSINESS SENSE.’’
Reason for the outcome of investment
While speaking at the forum yesterday, April 26, 2019, Mohammed said the weak distribution companies in the power sector are the reason for the lack of returns.
Mohammed warned stakeholders in the power sector to desist from utilising Government funds for illegal purposes or building up slush funds. In his view, the Government’s continuous funding of the sector is not in tandem with privatisation policy.
What is Slush fund: It is also known as black fund. It is a fund or account that is not properly accounted, such as money used for corrupt or illegal purposes, especially in the political sphere. Such funds may be kept hidden and maintained separately from money that is used for legitimate purposes.