New owners of distribution companies, DISCOs, in Nigeria have declared force majeure on power supply across the country.
The investors, who took over power distribution assets from the Federal Government on Friday, November 1, 2013, also demanded a refund of their investments if nothing is done to address what they called “the havoc, which the non-cost-reflective tariff has wrecked on their businesses.”
Force majeure is a contractual and legal announcement, which is used to declare the inability of a party to meet up with a contractual obligation with another party in business.
This force majeure, New Telegraph learnt, was contained in a letter sent to the minister in charge of power, Mr. Babatunde Fashola, who has summoned a meeting with the chief executives of the DISCOs in Abuja today. Although the Nigerian Electricity Regulating Agency (NERC) has slated February 1 for the implementation of a tariff hike, the DISCOs prayed government to adhere strictly to the pact it signed with them before the takeover.
“They want the Federal Government to refund their money for the licenses, which they plan to return if nothing is done to address the problems which government’s inability to meet up its part of the contract has caused.
“One of these is the backlog of debts of about N45 billion, which the police and military formations, ministries, departments and agencies (MDAs) of government owe them. The tariff, which is not cost-reflective, the hold back of N216 billion intervention funds from the Central Bank of Nigeria (CBN), among others, are some of the issues the DISCOs want addressed.
