- Time to wield the big stick?
With hope fast turning into a mirage three years after the formal transfer of electricity entities to their current owners, the beleaguered electricity consumer must increasingly wonder whether the long advertised respite promised would ever come. Thirty-six months on, it is certainly true to say that the privatised electricity entities have neither been able to raise the bar in service delivery, nor fulfill their promise to inject capital and expertise on the basis of which a turnaround of the sector could be expected. For a group expected to bring solutions to the sector, it must be disappointing to see them roll out one alibi after another, even as the fortunes of the sector continue to dip.
Only last week, newspapers reported the chief executive officer of Eko Electricity Distribution Company (DisCo), Oladele Amoda, lamenting that the funding gap in the power sector has widened to between N900billion and N1trillion. He blamed the situation on the huge debts owed generation companies (GenCos) and DisCos by consumers. For Eko DisCo alone, he put the debt owed by ministries, departments and agencies (MDAs) across all levels of government at N10.7 billion as at July. But what the DisCos always conveniently forget to add is that many of the consumers they claim to be owing them had been getting crazy bills for years and these accumulated bills form part of what they continue to see as debts.
As if taking a cue, Amoda’s counterpart at the Port Harcourt Electricity Distribution Company (PHED) Matthew Edevbie, on Friday reported the monthly loss to unpaid bills and electricity wastage by consumers under the PHED at N2.2 billion.
His words: “In Port Harcourt for example, every 100 units of electricity that comes to our electricity network, we collect only 25 per cent equivalent of money. Even when we install meters in homes, about 90 percent of the meters are usually by-passed. For every N1 billion worth of electricity PHED brings to this region, every month we get N450 million and lose N550 million.
“PHED’s supply of electricity to four states is in excess of N4 billion every month, meaning that we lose N2.2 billion worth of investment funds on monthly basis”.
Just as the spectacle of operators perennially whining or moaning about gas or tariff issues is increasingly familiar, what must be astonishing is the continuing attempt to present these problems as either new or something that developed overnight – or that the government has done nothing about some of the problems – something we know is not true. At any rate, if the DisCos discover bypassing of prepaid meters, how many such consumers have they caused to be arrested?
Again, we understand that some of the problems are deeply structural and hence would require time and hefty capital outlay to solve. Some in fact are beyond the operators to solve and so are quite understandable. The overall conclusion is that the entire privatisation exercise has not turned out as it should. The problems, unfortunately, have more to do with the operators than any other body. This is where the Federal Government not only needs to take a second look at the issues but to approach things more dispassionately.
Today, what must confound any observer of the sector is the fact that the operators, particularly the distribution companies, have neither demonstrated serious understanding of the sector nor shown that they have the financial or technical muscle to pull it out of the morass that it has sunk. This is the context in which the current clamour for the reversal of the privatisation process deserves to be understood.
We are aware that the Minister of Power, Works and Housing, Babatunde Raji Fashola, has insisted that the Federal Government will not reverse power sector privatisation, despite the challenges facing the sector. According to the minister, the terms of agreement can be revisited, but the process cannot be reversed.
We do think that the minister missed the crucial point. While he is in order to worry about the implications of an arbitrary voiding of the contracts, the issue here is whether the operators that have not only proven to be utterly incompetent but have also not shown fidelity to both the spirit and the letters of the contracts can be further allowed to hold the nation to ransom. This, in our view, is the crux of the matter.
