PROBLEMS OF DEBT RECOVERY IN PUBLIC ENTERPRISES

(A CASE STUDY OF NATIONAL ELECTRICAL POWER AUTHORITY (NEPA)

ABSTRACT
Debt recovery is a major problem in our public Enterprises, most especially the National Electric power Authority (NEPA). A lot of consumers ranging from the residential to the industrial/ maximum status, owed billions of Naria belonging to the authority through the consumption of electricity supply. The product ‘electricity’ is consumed before payment, so every electricity consumer is a debtor to the authority until her or she stop using the potential.

One may ask, can NEPA ever meet the demand of the present society? What about the increasing nature of the uncorrectable and bad debts?

We found that majority of the customers do not receive their bills timely and so could not settle them at the appropriate time. Due to late wills many resort to copy bills which does not represent the true position of bills consumers. We also discovered that majority of the consumers have problems of raise adjustments timely, there were also lack of cash offices, poor customers services and in-consistence power failure which does not encourage prompt payment of electricity bills consumed

CHAPTER ONE

INTRODUCTION

1.1 PROBLEM IDENTIFICATION

Problems of Debt recovery occasioned partly by mismanagement, inefficient supervision, poor revenue amongst others cannot be minimized in our society today cannot especially as it affects the public enterprises.

According to Udeme (1996). NEPA has an outstanding debt of about N3. 5b owed by its prospective consumers. Besides that, the Nigerian Telecommunication PLC to, has aboutN5billion yet to the recovered from subscribers nation wide. This is not too far from the

N 2.8b owed the Nigeria ports PLC and of course; the Nigeria National shipping line (NNSL) which have already faced liquidation as a result of poor debt management. This, certainly have contributed to the non-performance of many public enterprises in Nigeria.

Factors are responsible for the poor debt recovery experienced in NEPA are:

(1) The effect of untimely distribution of bills to customers.

(2) The influence of poor customer services on prompt of electricity bills.

(3) Effect of time rag on reconciliation of bills on customers.

1.2 RATIONALE OF STUDY

The main reason of this research is to find out the problems of Debt recovery in public Enterprises in Nigeria with special reference to NEPA management that will help item overcome the problem.

1.3 SIGNIFICANCE OF THE STUDY

A lot of money belonging to the Authority has been tied down by various consumers throughout the nation. In view of brokington (1994: 3), we understood that the objective of sales is to make profit in return, but if the services rendered are not paid for, then the business cannot function in another circle.

Therefore, identifying the problem of debt recovery through a meaningful research will improve the revenue status and function of the industry and for the nation, a better standard of living.

1.4 BACKGROUND OF THE STUDY

Electricity was said to have started in Lagos in 1886 when two 30-kilowatt generating units were installed to serve the city. As commercial activities increased there were several extension to almost 16 cities and communities

Oyeyele (1987.7( statis; “Around 1944. Lagos city undertaking was operated by the public utility department. But between 1940 and 1951 it then come under the Niger man government electrical undertaking.

Oyeyele further expressed that, there were other undertaking established and operated by locally constituted supply authority’s within this period.

On April Ist, 1951, an ordinance known as Electrical corporation of Niger is (E.C.N) was formed to assume control of the 16 local undertakings then in existence. In 1962, the corporation constructed a 132KVA interconnection from I Jona to Ibadan power station and form Ibadan to Orile and Akure, Benin and Ughelli in the west, Afam and Oji in the East, Kaduna, Aaria and Kano in the North

According to Oyeyele the first Hydro- electrical power station was constructed by private Tin mining interest as (Kwali falls) Kaduna river with a capacity of two megawatts.

Another four megawatts was installed by the Nigeria Electricity supply corporation limited at (KURA FALLS) Benin River. A major Hydro-electric feature of about 320 megawatts at 33KV operates from Kanji to Lagos in the West, Kaduna. In the North, Benin in the Midwest and Aba in the East

These facilities mentioned above provided a single supple network in Nigeria. But in 1970, the federal Government commissioned shawmout (Canada) under a financial by Canada international Development Agency (CIDA) to study the problems of the power supply Agency and make recommended a new Decree No 24, which created the National Electric Power Authority (NEPA).

But the study of Udom revealed that there was a serious manpower problem between NDA and power purchased in bulk and sold to the public.

Also Abidun (1984). In his opinion confirmed this:

“But with the amalgamation of the two bodies to form today’s NEPA market the beginning of its crises”

1.5 DEFINITION OF TERMS

Definition of terms is very useful in any research work because it helps to explain the meanings of the various technical terms implied in the study. Itence the following terms are defined.

NEPA:

According to Oyeyele (1987:7) the National Electrical power with the responsibilities and sales of electricity Power Authority is the public Enterprises charged with the responsibilities and sales of electricity supply to consumers.

ELECTRICITY:

Electricity is said to the power that is produced by various means carried usually acres that provide heat, light and cold

KILOWATT HOUR:

This is defined in Abbot (1980:84) as the energy supplied by a rate of working of 100watts for an hour.

CABLE:

Cable is the length of insulated single or more conductor (s)

ENTERPRISES:

Massie (1992:239) narrowed it to a public or private organisation set up for charity or profit. Normally, public enterprises are capital intensive hence the need for the government to control them.

UTILITIES:

There are essential services like NEPA, WATERBOARD, NITEL, AIRWAYS etc. The words utilities and enterprises can be interchanged. In macsran (1967:1969:351) it was learnt that in developed countries, most of the public utilities are controlled by private investors.

ACCOUNT NUMBER:

Account number is the specific number given to a particular consumer for the purpose of accounting.

BILL:

A bill is a conditional order written by one person to another, signed by the person concerned requesting the person to whom it is given to pay a certain amount of money at a particular date.

AUTHORITY:

The word Authority is used to identify the power centered to NEPA as specified in Decree NO 24 of 1972. The words authority, industry and NEPA will be interchanged in this work project.

MAXIMUM DEMAND CONSUMERS:

There are consumers who was the higher limit of electricity supply the industry consumers are also maximum demand consumers in NEPA