Minister threatens to revoke DisCos, GenCos’ licence over poor performance

The Minister of Power, Adebayo Adelabu, has threatened to revoke the licences of Distribution Companies (DisCos) and Generation Companies (GenCos) over their poor performance in the country.

Adelabu declared that the companies must sign a performance bond with the government, saying failure to live up to the agreement would lead to licence revocation.

The minister said this during an interactive session with journalists in Abuja on Wednesday, November 8, 2023.

He stated that an investigation will look into how the licences for DisCos and GenCos were renewed for another five years unilaterally by the Nigerian Electricity Regulatory Commission (NERC) shortly before the inception of President BolaTinubu’s administration.

The probe, he said, will look into whether the extension was legally and contractually in order, insisting that the government has the power to revoke a licence on the ground of non-performance.

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Adelabu said the federal government reserved the right to revoke and recover operational facilities from licencees after paying them off, adding that his ministry plans to enter into a practical and realistic performance bond with the licencees before the end of the year.

He said: “The licenses I saw were for 10 years (2013 -to -2023). But along the line, it was the Vice Chairman of the Commission who told me that before their tenure, the Commission had extended the licenses for another five years.

“The correctness of that legally and contractually, we are trying to review it. We have also ordered an investigation into their extension of the licenses if they were actually in order.

“So, it is not very important whether the license has been extended for another decade or not, if you are not meeting the conditions in the performance bond, all I need is to pay you and get the licence back from you.

“We are in the process of doing that; the performance bond expired in 2017 and was due in 2019. It was reviewed for another two years. So, it expired in 2021.

“We want to sit down with power sector operators in the generation and distribution segments to agree on a new practical and realistic performance bond which they must meet. That is what actually matters to us here.”

The minister added that the federal government  had begun further investigation into the extension of the licenses “not by this administration, not by the current management of the current NERC, but by the previous one, so we have to investigate what actually happened, how legally correct was it, how contractually correct was the extension.”

The Star