The statutory instrument that the Minister of Energy signed states its source of authority which is section 15 of the Electricity Act of 2019 under which the Minister has declared CEC infrastructure as a Common Carrier. This action is normally taken under very compelling circumstances which are not applicable in the current situation, such as CEC unreasonably refusing to avail its infrastructure for other users. The situation at hand is a purely commercial one in that CEC is exercising its contractual rights under a legally binding PSA with KCM (which PSA was duly endorsed by the authorities) to recover a huge debt which KCM acknowledges but which, for inexplicable reasons, it has virtually declined to honour. If the government compelled KCM to settle this debt as it has been done before, the current impasse would not arise. It is the unnecessary invocation of the SI and the manner in which it has been done, which has given rise to legitimate concerns among various local and international stakeholders and investors that it effectively amounts to a government takeover of CEC assets.
What is the legal framework for the Government’s “takeover of CEC assets”? Print
Modified on: Fri, 5 Jun, 2020 at 10:10 AM
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