By Ohia Israel
Mr. Uche Iwu is a welder, his business centers on electricity power supply, but according to him he has been running at a colossal loss due to the erratic power supply and continuous use of Diesel for his work which is cost effective. To him, he may close shop if the dwindling nature of the country’s electricity supply continues unabated.
According to him; “Since last year, I have been encountering losses on a regular basis, due to the constant blackout in this area. Even as I encounter constant blackout, my power bill also has increased even as there is no light. “Since I started this business last year, I have not been able to find my bearing. Patronage has been low, because power has been unstable. But it became worse since November. I used to have five hours of electricity, but now I hardly get it for two hours. How do I survive?” he asked.
For Jane Uke, a Hairdresser Operator, the story is the same. According to her, the power situation in her place in Abuja is the same, as she said power has even gone abysmal since it was handed over to the Private investors.
She said; “We were happy when we learnt that PHCN has given way to private hands. Our hopes were raised. We thought we were in for better days, but in the last five months, we have not seen any improvement. We used to have 8-10 hours of electricity daily, but now we have about two hours, if we are lucky.”
The experiences of Jane and Mr. Uche are like those of other many Nigerians whose growing concern for an improved power supply, after several years of power outage, blackout and interrupted electricity supply by the defunct Power Holding Company of Nigeria, PHCN, has been dashed. Since independence in 1960, the issue of power outage and blackout has become the norm rather than the exception, such that some Nigerians believed that uninterrupted electricity supply would never be achieved in their generation.
As it is the situation was not made better by successive governments which promised to shore up the mega watts so as to give the populace the much needed regular power supply without success. Nigerians have therefore looked forward to the day power outage would be a thing of the past. It was such hope that greeted the November 1, physical handover of PHCN to private owners.
But as it is, over five months after the handover, the power situation appears to have deteriorated, while the bills have been increased drastically. Also, some hidden charges have been introduced to the shock of customers.
As gathered by DESERT HERALD there has been no significant change since the handover of PHCN to private investors. Bills are still based on estimates. For one, the pre-paid meter issue has been suspended, making it easier for estimated bills to thrive. Also, no new equipment has been installed to replace the old ones in the GENCOS and DISCOS. Moreover, more than half of the defunct PHCN workers were laid off without any replacement yet. Consequently, things are still done the old way in these successor companies.
Fundamental to the operation of the GENCOS and DISCOS is gas supply. When the former President Olusegun Obasanjo administration built some of these power plants, gas supply was not factored in. This has left them comatose. It has also contributed to the low capacity production of the companies, which culminated in power outages being experienced always. The new investors have to grapple with laying gas pipelines and signing agreement for gas supply. This means that Nigerians have to wait for a long time before they experience uninterrupted power supply.
Contrary to their high expectations of improved power supply post privatisation, Nigerians in many parts of the country woke up to total blackout in the immediate days following the handover of the PHCN assets to private investors, putting businesses and homes under acute stress.
The deteriorating power situation was blamed on massive disengagement of technical personnel at the various electricity distribution zones in the country by the new investors. Indeed, the week following the handover of the power infrastructure to the new investors was greeted with a gale of sacking of technical and support staff responsible for faults clearing at various installations – at a time many of the transformers across the country were faulty. As a result, fault clearing at the distribution networks was stalled. Reports also had it that in the wake of these disengagements, power workers across the country downed their tools, an action which put many businesses and homes in darkness as many could neither recharge their prepaid meters nor rectify electrical faults.
More so, inadequate gas supply, shortage of water in the dams, vandalism or theft of power equipment, poor funding and presence of “demons” or “mafia” as claimed by the Minister of Power, Prof. Chinedu Nebo, have been identified as major causes of the power woes.
According to analysts in the power sector; “electricity is the single biggest impediment to the industrial takeoff in Nigeria. Through the years thousands of factories, companies, and industries have died as a result of their inability to absorb the often high cost of providing power through the use of generators. By the time you factor in the cost of diesel you might as well go to China, Taiwan, India, or anywhere else and import whatever products you are making in Nigeria. There is no other way to explain it; our cost of labor remains much lower than most developing economies, but the extra cost of providing electricity often eats up the difference and more. Only those in high-end products and services who can afford to charge higher premium can withstand this cost differential.”
Speaking further he said; “There are sectors of an economy that a responsible government cannot spin off until they have invested sufficiently in that sector to the point that all the private buyers can do is maintain and improve the facilities incrementally. Electricity is one such industry. All the developing economies such as China, India, and Brazil, are currently investing massively into the power sector, and these are countries that have already achieved steady electricity supply.
China and India are each currently building on average two power stations per week, just to keep up with anticipated electricity demand. Last year, President Jonathan handed over certificates of ownership to all the new owners of various PHCN facilities. In my opinion, this is the biggest abdication of responsibility I have witnessed of any government in Nigeria. For the record, I am not opposed to privatization; I sincerely believe that there is so much deadwood agencies and facilities Nigeria need to privatize. Why not electricity and why not now?
“These are the caliber of companies that can afford to invest the tens of billions of dollars required to build new power stations. But how can they invest such money only to be held hostage to a government controlled antiquated transmission bureaucracy. I also warned that they will not show up when President Jonathan announced his privatization exercise, and they didn’t show up. Finally these facilities have now been handed over to several front men and front firms acting on behalf of men like Babangida, Abdulsalami, Atiku, Tinubu, Sambo, and so forth. I really don’t care who buys these facilities, except that I am absolutely certain that these men, no matter how much you think they have stolen from Nigeria, do not have the hundred to hundred and fifty billion dollars needed to invest into this sector in the next ten years. So far we may see some South Korean companies, even some Chinese companies sign MOU’s but I’m sure that they will not invest a hundred billion dollars into Nigerian power sector,” he said.
Under Professor Bart Nnaji, as a Minister, Nigerians experienced power generation that came close to 5,000 megawatts. Since then it has dropped to somewhere around 3,000. There are several forms of privatization, however with respect to power sector reform this write up restricts itself to three namely, outright sale of power plants to the private sector, outright sale of power plants to the public (public listing) and commercialization by which the object in question remains either fully or even partly owned by the state but run by professional managers with private sector experience. Commercialization can take various forms, the form of interest here is full concession by which the private sector is allowed to “lease” the object in question, “turn it around”, in other words bring it back to profitability and operate it until the lease expires, upon which the lease may be extended if so desired by both parties or the object is returned back to the state.
According to Professor Thomas Makanjuola of the Faculty of Arts, Obafemi Awolowo University, Ile-Ife, recently, while delivering a lead paper titled, “Otan-Ayegbaju: A Rustic Community with Extra Ordinary- Problems and Extra- Ordinary Challenges- Need for Visionary Leaders for a Time Like This’’ at the first Otan-Ayegbaju Community Development Summit, held at
Olori Ololade Oyinlola Memorial Hall, Otan -Ayegbaju.
Professor Makanjuola said the leadership of the country has failed to address the inadequate power supply imitating the progress of the country with seriousness.
He wondered why the nation’s leaders are deluding themselves with the impression that all is well with the country, when they cannot guarantee regular power supply that could make the dream of industrialisation and economic development becomes a reality. The university don lamented that the current instability of the country’s electricity supply remains a high risk factor in the nation’s economic instability, since no commercial venture, manufacturing or international business could be engaged-in without stable supply of power.
According to him, the real enemies of Nigeria are those profiting from importation of generators into the country and those who embezzle billions of naira allocated to the development of the power sector. “Our enemies in this regard are many. They are the countries that produce generators for sale in Nigeria, those who benefit from sales of generators, those tin-gods, who share the annual votes of money for provision of electricity, regarding it as their inalienable share of the national cake, even when they live far away from the oil producing states. “They are the people who enjoy the centralisation of power as it gives them the lion share of what they call the national cake”, he added.
Meanwhile, Garba Shehu Media aide to former Vice President Atiku Abubakar, in his recent article said; It doesn’t sound like we have a government in place. If we had one, someone should start worrying about the sliding power supply. I am of the generation of Nigerians who cut their teeth on candle lights and rechargeable lamps and given the way things are going, from bad to worse, I have come to the inescapable conclusion that the vision of 24-hour, seven-day-a-week electric power supply is unreachable in my lifetime.”
According to Shehu he said; “at home in Kano last weekend, neighbours said they hadn’t seen light for five days in my part of the GRA. In normal times, you got more power supply here than those who lived in slum sections of the outer city. I met someone from there who said for fifteen days, they hadn’t seen a blink.
In Abuja and the other cities, power continues to deteriorate, with just a few cities and towns enjoying very little supplies. On one of those days last week in Kano, radio news announced the allocation of 12 megawatts to the Kano distribution company with Kano, a megacity by all standard, getting six megawatts, Katsina four, Dutse two and Azare zero.”
Writing further he said; “In February 2013, soon after the Bureau of Public Enterprises, BPE executed the share sale agreements which saw the “historic” handover of the 14 of the successor companies carved out of the defunct Power Holding Company of Nigeria, PHCN, the federal government, with a fixed eye on propaganda proclaimed 2013 the “year of power”.
To him he said much hope was raised that the take-over of the generation, transmission and distribution successor companies by private investors – someone called them asset strippers – will see the new owners revamping the sector and impacting positively on the nation’s power supply. Last year, most Nigerians celebrated Christmas in darkness. Wherever a new leadership takes over a political or even a business entity, there are fleeting changes that often come with that. The new leaders start with a zeal to score quick runs, in this case, improving the level of service to make an immediate good impression. Since the new owners of the power companies took over, what Nigerians have experienced is a slip-up. Apart from introducing quite a few faces, nothing by way of improvement has come to the consumers.
“In a hot season as we are now in, with temperatures hovering above 30 degree Celsius in a majority of cities, and 40 degree Celsius and above in the fringe cities of the North, this is a period where there is usually an increase in the demand for power for cooling the environment as well as storage. An increase in demand and declining supply make for a very bad combination. With a population of 170 million, Nigeria requires an average 40,000 megawatts of electricity. As it is, less than 4,000 or 10 percent is available for both industry and domestic consumption.”
According Garba Shehu he said; “After surrendering to the deteriorating situation for many years, those citizens who believed the government that things would get better and delayed such investment decisions as the purchase of generating set are now the wiser. They are bringing out money from savings to buy their own units. For those who can’t afford to do that, there is a booming electricity supply underground by retailers who wire up shops and houses in neighbourhoods, selling power per minute and hour. Without this, women can no longer prepare soup and store food in refrigerators. They will also have to buy beef and poultry on a day-to-day basis. Government offices that cannot power a whole establishment now buy 2 – 5 KVA generators exclusively to power the office of Permanent Secretary or even Minister. As a television reporter covering the Ministry of Power, this was how bad things were in the final days of the Shagari administration. At that time, overall national output had dropped to a miserable 900 megawatts. The only difference is that you had the power sector under a state monopoly. You could then by right, hold the Minister and his government responsible for the situation.
“But state control of the power sector, as argued by many, was counter-productive and eventually was dismantled. With this so-called “significant milestone” by which generation, transmission and distribution are driven by the private sector, government officials are already pointing at the new owners as those responsible for the terrible situation. But government can’t run away from the public. With 80 percent of power plants which are gas-fired deprived of regular gas supply amidst increasing sabotage of gas and oil pipelines in the delta region as illustrated by the recent bombing of the gas supply pipeline between Excravos and Warri, it is hard for the government to play ostrich on this matter even if that is their wish. They can’t run away from responsibility by abandoning consumers to the antics of “asset strippers” exploiting the ordinary citizens to their marrow.”
As it is Shehu believes that; ‘It doesn’t sound like we have a government in place. If we had one, someone should start worrying about the sliding power supply, insisting on performance and righting the wrongs that are right there before everyone’s eyes. Should government be running from its responsibility?”