Opinion: Power sector reform – Is there light in the tunnel?

by Abraham Ogbodo

WHEN the matter was put to vote the ayes had it. When motion was proposed at the Tuesday plenary session of The Guardian on Sunday, it was approached with some trepidation. No single individual was too sure if the entire house would agree that electricity supply has witnessed improvement lately. But the reaction was uniform. “In my place, NEPA (it is surprising why people have refused to let PHCN replace NEPA for good) is doing too much,” said a member from Alagbado area of Lagos. Another from Ikotun added, “We now have more than 20 hours of uninterrupted power supply.” Yet a third contributor from Ikorodu said, “for some time now, I only run my generator to keep the battery from running down.”

It was the member from the Journalists’ Estate in Mowe, Ogun State who refused to be impressed by “these fleeting moments of excellence” by the authorities in charge of electricity in Nigeria. He claimed to generate his own power completely outside the national grid, pending when the signals from the Power Holding Company of Nigeria (PHCN) would be much more dependable. Otherwise, across the floor, there was agreement that the phrase ‘Up NEPA’ or ‘Up PHCN’ can now apply in acknowledgement of the developments in the power sector.

One statement by the Ministry of Power last week said the country attained an unprecedented 4,237 megawatts (MW) plus 70 MW spinning reserve on August 7, 2012. This is what has translated to improved supply in the last one-month or so. But there is a problem. The seemingly good times are in spite of the industrial tensions in the power sector. The statement was actually issued to refute media reports that the 600 MW Shiroro hydro station, which is running at near full capacity (550) had been shut down by protesting electricity junior workers. It added that the damaging report would have been planted by persons in the leadership of the National Union of Electricity Employees (NUEE), “who do not consider anything sacred in their self-assigned mission of agitation and propaganda (agit-prop) against the ongoing power sector reform.”

The roadmap to reforms in the Power Sector is definite on one point. To make progress, PHCN must be unbundled and taken off the track. This is proving even a greater challenge than building facilities to enhance the power output nationwide. The Niger Dam Authority and the Electricity Corporation of Nigeria (ECN) were merged in 1972 to form NEPA, rechristened PHCN in the wake of reforms to increase the operational efficiency of the electricity company. But after 40 years of operating as the sole provider of public electricity in Nigeria, the institution and its operators are not able to comprehend the new language of competition being preached.

Instead of quitting the stage for failing to do the needful, the workers are curiously itching to make a super point they could not make in 40 years. Systematically in four decades, PHCN worked to frustrate the provision of public electricity than it worked to promote it. The result is that Africa’s second largest economy runs almost permanently on generators. When known manufacturers in Europe and Japan could not keep pace with the skyrocketing demand, China massively moved in to cover the shortfall in supply. The Chinese even conducted market studies to fully domesticate designs and make generator affordable across board. The brand called “I Pass My Neighbour” is the most basic. It generates just 500 watts, but enough to offer illumination in a three-bedroom apartment without encumbrances.

The good news though is that government has managed eventually, to take the octopus PHCN off the track and in its stead, created 17 private companies that will conduct business in two aspects of public electricity namely – generation and distribution. The arrangement allows government to wholly control the transmission of power from where it is generated to where it will be consumed. But in the spirit of the reform, the state owned Transmission Company of Nigeria (TCN) would be run by a Canadian firm with a robust track record in that area. The emerging template leaves no role for civil servants in the PHCN and government has accordingly served them notice of disengagement.

The ongoing furore in the power sector occasioned by strike threats by the workers union is over what is adequate as severance package for the about 50000 electricity workers that will be asked to make way for efficiency to reign in public electricity supply.

Both sides are bandying figures. While one side is standing on 25 per cent of a sum that is determined by the length of service, the other is talking of adoption of a 15 per cent contributory pension scheme, which is paid equally by the employer and employee. The Nigeria Labour Congress (NLC) is seeking to make it a larger labour matter by threatening to shut down the sector if government does not play ball within a specified time. A mediation session set up mid last week between the labour leaders and Emeka Wogu, labour and productivity minister to straighten the issues reportedly ended without a clear understanding.

About the same time, the Minister of Petroleum Resources, Mrs. Diezani Madueke was briefing the media on progress recorded by the ministry through its subsidiary, the Nigeria Gas Company, in ensuring steady gas supply to the thermal power stations spread across the country. She said the ministry is now fully primed to do its bit in the concerted efforts to increase electricity output. With that assurance, one major question in the operation of gas-propelled thermal stations, which account for about 70 per cent power generation might be answered. It is only left for the relevant agencies including the Joint Military Task Force (JTF) and the Amnesty Office to maintain the new found peace in the Niger Delta, so that the all important gas can flow ceaselessly from the near infinite reserves in the region into the numerous thermal power stations.

At other forums, the Power Minister Prof Barth Nnaji presented a picture that made it look as if the country is already in the Promised Land. He said more capacity would be off-loaded onto the grid from completed National Integrated Power Projects (NIPPs) between now and December to bring the national output to an unprecedented 9000mw. Estimates put current national requirement at 6000mw and if the minister’s projections faithfully come on stream, a slightly comfortable spare capacity of 3000mw would be created, enough to stabilize supply in the short run.

These are the kind of stories Nigerians want to hear after years of literally living in the dark. The point does not require emphasis. It has been empty promises of improved electricity supply since 1999. Against that ugly past, the prevailing reality of availability of public electricity is almost looking too good to be true. Perhaps the point needs to be stressed that the people may likely defend these good times with the last drop of their blood, so that the NLC, which is threatening to destroy the mood can get its perspective right. That some aggrieved workers would not give light a chance and the Federal Government has had to deploy soldiers to secure power facilities to guarantee the observed improvement is bad enough. Whatever their grievances are, will not be weighty enough to invoke the sympathy of many Nigerians who have waited patiently for this day of reckoning.

At the risk of exaggeration, if the choice is strictly between constant power supply and the severance benefits of the 50000 PHCN workers, Nigerians will go for the former. Every adult Nigerian living independently has had a raw deal with the national electricity company either as NEPA or PHCN. Due to its persistent under performance, it was sarcastically rechristened Never Expect Power Always (NEPA) and now as PHCN, the people say an appropriate description is Power Hoarding Company of Nigeria (PHCN)

This succinctly captures the profile of a public electricity corporation that is better defined by its gross inefficiency, corruption and monopolistic ruthlessness, than it is known for any glowing attribute. Under it, everybody is a victim. This is precisely why the NLC’s characteristic combativeness may fail in the PHCN workers cum government negotiation.

In fact, one group, the Northern Union, has warned the NLC to thread softly. “Where was the NLC when the PHCN was punishing innocent Nigerians?” it asked, stressing, “any strike at this moment will be seen as selfish and will not enjoy public support and sympathy.”

Like soccer, public electricity supply or absence of it is one issue that brings Nigerians on a common page. It is also an index that attracts high scores in performance rating. At the dawn of this dispensation in 1999, former President Olusegun Obasanjo had made loud statements about making public electricity available 24/7 in a matter of two years. He finished eight years, leaving the sector more confused and prostrate than he met it. His successor, late Umaru Musa Ya’Adua threatened all through to declare an emergency in the power sector, which he couldn’t do before he died.

President Jonathan changed the semantics upon assumption of office. Instead of emergency, he launched a Roadmap to Power Reforms in Lagos on August 26, 2010. It is only two years down the road and the distance covered is relatively impressive. It promises to smash for good the diesel and generators importing cabal. If there is no retracing of steps or derailment off the straight path, the distance that will be covered in another two years (that is even before 2015) could actually translate to transformation in the power sector.

Nobody has a billing metre that determines consumption; the entire area is on estimation because it is usually easier to remain on estimation than to pass through the crucible of trying to secure a PHCN billing metre. The bill is settled as presented and life continues.

 

*Op-ed pieces and contributions are the opinions of the writers only and do not represent the opinions of Y!/YNaija.

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