Following the declaration of force
majeure by Integrated Energy Distribution and Marketing Company, the
core investor in the Yola Electricity Distribution Company, the Federal
Government has taken over the beleaguered power firm.
Consequently, the Federal Ministry of Power has taken over the management and control of the electricity distribution company.
It has also appointed Mr. Baba Mustapha,
an engineer, to lead the company in the capacity of an acting managing
director. Before his new appointment, Mustapha was a deputy director in
the Ministry of Power.
The Head of Public Communication, Bureau
of Public Enterprises, Mr. Alex Okoh, confirmed the takeover of the
electricity distribution company in a telephone interview with our
correspondent in Abuja on Thursday. He, however, declined to give
further details.
Integrated Energy Distribution and
Marketing Company had on six occasions (November 10, 2013, August 27,
2014, October 15, 2014, April 9, 2015, April 30, 2015 and May 13, 2015)
given notices of force majeure, which is an irresistible force or
compulsion such as will excuse a party from performing his or her part
of a contract.
Consequently, the matter was tabled
before the sub-committee of the Technical Committee on Power of the
National Council on Privatisation at one of its meetings.
The sub-committee recognised the reality
of the force majeure, which was in line with clause seven of the Share
Purchase Agreement and made recommendations to the technical committee.
The force majeure clause is a standard
clause in most contracts and includes events like natural disasters,
wars and other occurrences not within the power or control of the
executing party that makes implementation of the contract impossible.
Clause seven of the SPA stated that in a
war situation, where the core investor could not operate, it could
invoke force majeure on issues beyond its control.
The Yola Electricity Distribution
Company covers Adamawa, Borno, Taraba and Yobe states. Except for Taraba
State, the other three have been mostly affected by the activities of
the Islamic insurgent group, the Boko Haram, and the subsequent war
against it.
The recommendations of the sub-committee
were deliberated upon by the Technical Committee of the NCP at its
meeting in April, where the basis for the declaration of force majeure
was also acknowledged, according to the BPE.
The technical committee made
recommendations to the NCP, which at its first meeting for 2015 held at
the Presidential Villa, set up a committee comprising the Permanent
Secretary, Ministry of Power as the chairman; a representative of the
Nigerian Electricity Regulatory Commission and the Director-General of
the BPE, to explore the implementation of the terms of the force
majeure.
The Yola Disco is one of the 11
electricity distribution companies that were sold to private sector
operators in a gale of reforms of the nation’s power industry that led
to the unbundling of the defunct monopoly, the Power Holding Company of
Nigeria.
Integrated Energy Distribution and Marketing Company won the bid for the YEDC and was required to pay N9.31bn for the firm.
Many Nigerians have expressed
disappointment at the turnout of the privatisation exercise as the
significant improvement expected from the power sector following the
reform has not yet happened.
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