In order to address the huge debt recorded by power holding company of Nigeria (PHCN), the Minister of power, Professor Bart Nnaji, has ordered an emergency retreat for the 11 distribution companies created out of the state-owned power utility.
According to sources in the Ministry, the meeting is to help create a paradigm shift because professor Nnaji believes we cannot continue with a system which has failed over the decades and still expect a different result.
The meeting, mandatory for chief executives and marketing chiefs of the 11 distribution companies, will hold at Oriental Hotel, Lagos, this weekend, with officials of the Presidential Task Force on Power in attendance.
PHCN monthly revenue, which was N11.8billion when Nnaji assumed office last July, moved up to N15.6b in December, but declined to N12.8b in January following the general strike against the removal of petrol subsidy. (Unconfirmed reports suggest it was N14.9b last month.)
The distribution companies are the sole source of revenue for the PHCN.
At an unscheduled meeting in his office this afternoon with top ministry and PHCN executives responsible for revenue mobilization, the minister directed the officials to work out strategies “that will result in a monthly revenue of at least N22.5b, the irreducible minimum which we must generate to ensure regular settlement of PHCN’s obligations to power and gas suppliers like Shell, Agip and AES”.
It is understood that the PHCN is owing Agip N60b for its power plant at Okpai in Delta State which produces 470Megawatts, Shell $78m for its power plant which generates 561MW at Afam in the Rivers State, Nigerian Gas Company N10b for 700million standard cubic of natural gas, National Integrated Power Project N6b for power supplied from its stations in Sapele in Delta State and Olorunsogo in Ogun State, and Ibom Power N300m for the 90MW generated from its plant at Ikot Abasi in Akwa Ibom State.
“When we generate N22.5b monthly,” said Nnaji, “ it will still not be big enough for our maintenance and operations, but enough for only the payment of gas and power supplies, as well as for the wage bill which has ballooned since we last June approved a 50% increase in salary as part of the incentive package for the entire 50,000workforce”.
The minister also directed the executives to search for “new and creative ways to recover the N100b owed PHCN by customers across the country”, dispelling the notion that the government debt is the cause of the debt crisis.
“What the government and all its agencies in the country owe is about only 20% of the debt stock”, he declared.
“Therefore, there must be a paradigm shift in the way we have been going about our revenue business, including the deployment of modern technology”.
He asked the PHCN Market Operators to find out companies indebted to PHCN which are still in operation and the possibility of debt discountenance.
“You may also have to consider the question of hiring professional debt collectors”, he added.
Among the issues to be discussed at the two-day retreat for the 11 distribution companies are manpower shortage and quality of manpower training in the marketing department of each company, corruption and leakages in the revenue system, acquisition and deployment of prepaid meters, the lack of statistical metering and implementation of the Service Level Agreements (SLAs) with Key Performance Indicators (KPIs) like cash improvement, customer satisfaction and frequency of power outages or trips.
“I will brief the president on decisions you arrive at the retreat, and if there is any need to start deducting money at source from the votes to ministries, departments and agencies in order to strengthen the power sector, which is very dear to him, the president will certainly not hesitate to do so”, Nnaji informed the meeting.
According to sources in the Ministry, the meeting is to help create a paradigm shift because professor Nnaji believes we cannot continue with a system which has failed over the decades and still expect a different result.
The meeting, mandatory for chief executives and marketing chiefs of the 11 distribution companies, will hold at Oriental Hotel, Lagos, this weekend, with officials of the Presidential Task Force on Power in attendance.
PHCN monthly revenue, which was N11.8billion when Nnaji assumed office last July, moved up to N15.6b in December, but declined to N12.8b in January following the general strike against the removal of petrol subsidy. (Unconfirmed reports suggest it was N14.9b last month.)
The distribution companies are the sole source of revenue for the PHCN.
At an unscheduled meeting in his office this afternoon with top ministry and PHCN executives responsible for revenue mobilization, the minister directed the officials to work out strategies “that will result in a monthly revenue of at least N22.5b, the irreducible minimum which we must generate to ensure regular settlement of PHCN’s obligations to power and gas suppliers like Shell, Agip and AES”.
It is understood that the PHCN is owing Agip N60b for its power plant at Okpai in Delta State which produces 470Megawatts, Shell $78m for its power plant which generates 561MW at Afam in the Rivers State, Nigerian Gas Company N10b for 700million standard cubic of natural gas, National Integrated Power Project N6b for power supplied from its stations in Sapele in Delta State and Olorunsogo in Ogun State, and Ibom Power N300m for the 90MW generated from its plant at Ikot Abasi in Akwa Ibom State.
“When we generate N22.5b monthly,” said Nnaji, “ it will still not be big enough for our maintenance and operations, but enough for only the payment of gas and power supplies, as well as for the wage bill which has ballooned since we last June approved a 50% increase in salary as part of the incentive package for the entire 50,000workforce”.
The minister also directed the executives to search for “new and creative ways to recover the N100b owed PHCN by customers across the country”, dispelling the notion that the government debt is the cause of the debt crisis.
“What the government and all its agencies in the country owe is about only 20% of the debt stock”, he declared.
“Therefore, there must be a paradigm shift in the way we have been going about our revenue business, including the deployment of modern technology”.
He asked the PHCN Market Operators to find out companies indebted to PHCN which are still in operation and the possibility of debt discountenance.
“You may also have to consider the question of hiring professional debt collectors”, he added.
Among the issues to be discussed at the two-day retreat for the 11 distribution companies are manpower shortage and quality of manpower training in the marketing department of each company, corruption and leakages in the revenue system, acquisition and deployment of prepaid meters, the lack of statistical metering and implementation of the Service Level Agreements (SLAs) with Key Performance Indicators (KPIs) like cash improvement, customer satisfaction and frequency of power outages or trips.
“I will brief the president on decisions you arrive at the retreat, and if there is any need to start deducting money at source from the votes to ministries, departments and agencies in order to strengthen the power sector, which is very dear to him, the president will certainly not hesitate to do so”, Nnaji informed the meeting.
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