N33bn Debt: TCN Issues 14-Day Disconnection Notice To Ajaokuta Steel Company
The Transmission Company of Nigeria (TCN) says it has issued a 14-day suspension notice to Ajaokuta Steel Company Limited for non-compliance with provisions of its market rules.
In a statement signed by the TCN market operator Edmund Eje on Wednesday, ASCL accrued a debt totalling N33.71 billion as at November 2023.
“As of the November 2023 billing cycle, ASCL has accumulated a total outstanding debt of N33,071,002,129.49 (Thirty-Three Billion, Seventy-One Million, Two Thousand, One Hundred and Twenty-Nine Naira, Forty-Nine Kobo), Comprising of N30,849,749,981.01 for energy and capacity delivered by Nigerian Bulk Electricity Trading PLC (NBET) and N2,221,252,148.48 owed to Service Providers,” the statement reads.
“On the 20th of March 2023, the MO issued a notification to Ajaokuta Steel Company Limited (ASCL) for the non-compliance with the Market Rules and requested corrective actions within a specified period, as advertised in three national newspapers (The Nation, Daily Sun, and This Day).”
According to TCN, despite interventions by the minister of power, which stopped enforcement actions temporarily to give ASCL a chance to rectify its defaults, the non-compliance remains unresolved.
“To avoid disconnection, TCN said, ASCL is required to settle all outstanding invoices and provide an adequate “Bank Guarantee of N70,177,727.39 for MO’s invoice and N320,000,000.00 for NBET’s invoice, within fourteen [14] days from the date of this notice”.
“Failure to rectify these defaults within the specified period will lead to the disconnection of ASCL’s network from the National Grid, in accordance with section 45 of the Market Rules,” TCN said.
“Furthermore, should the defaults still remain unresolved after 30 business days of disconnection, the Market Operator will proceed to terminate ASCL’s Market Participation Agreement and escalate the non-compliance matter to the Nigerian Electricity Regulatory Commission (NERC) for Business Continuity Regulation to commence.”
In its 2022 annual report, the NERC had hinted at disconnecting Ajaokuta Steel from the national grid over gross indebtedness of N25.06 billion.
Hafsoh Isiaq is a graduate of Linguistics. An avid writer committed to creative, high-quality research and news reportage. She has considerable experience in writing and reporting across a variety of platforms including print and online.
