The woes of the Nigerian economy is set to be compounded by the imminent reversal in the increase in electricity tariff following a Lagos High Court ruling against the electricity distribution companies. A report reveals that an enforcement of the reversal on electricity tariff may lead to over 10,000 job loss, Mr Oladele Amoda, Chief Executive Officer, Eko Electricity Distribution Company Plc (EKEDP) said.
Amoda who stated this at the company’s function in conjunction with the United States Agency for International Development, USAID in Lagos said that electricity distribution companies, DISCOs, have warned that if the court order, which directed them to revert to old tariff is obeyed, it will affect the power sector negatively.
He said,
“Over 10,000 workers may be sacked while investors will not just shy away from investing in the sector, international donors will also be discouraged from participating in the sector.
“We have appealed the court order for stay of execution. Meanwhile, that singular act will affect the power sector negatively. Investors will be discouraged from further investment in the sector; donor agencies may have a rethink.
“The biggest one is that it may lead to job loss. More than 10,000 workers may lose their job if that judgment stands. Companies cannot continue to run a business at a loss. If we are not making profit, at least we try to cover our cost.
“Another thing is that if we go to status quo as contained in the judgment, we will reintroduce fixed charges. Right now, the increase in tariff doesn’t cover our cost entirely.
Many things have to be done by reinforcing our network which is dilapidated. With this judgment, banks may not offer us credit because they will realise we may not recover our cost,’ he said.
Meanwhile, the DISCOs are set to appeal the ruling of the court.
Source
Vanguard
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