Prepare to Pay Cost-reflective Tariffs, TCN Tells Nigerians

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Alhaji Usman Gur

Dike Onwuamaeze

The Managing Director and Chief Executive Officer of the Transmission Company of Nigeria (TCN), Mr. Usman Gur Mohammed, Thursday called on Nigerians to be prepared for the payment of cost-reflective tariffs on electricity.

Mohammed stated this during the ground breaking ceremony for the rehabilitation of Ikeja West-Alimosho-Ogba-Alausa and Ogba-Ota Tee-off 132kv Double Circuit Transmission Line with gap conductor at Ikeja West Transmission Sub Station in Lagos.

Mohammed identified the payment of cost-reflective electricity tariffs as the answer to the problem of power supply in Nigeria.

He said: “We will not move forward if we cannot pay the right tariffs for consumption of electricity. I want to assure Nigerians that there is no relationship between poverty and payment of electricity. So, let us stop deceiving ourselves that we can refuse to pay for electricity and still enjoy constant power supply. That is why I said that Nigerians should prepare to pay cost-reflective tariffs so that these contracts can be effective. Also service will significantly improve once tariffs become effective.

“We have to be prepared to remove government from the middle. This issue of government guarantees (subsidy) has not worked and will not work. Look at a place like Burkina Faso that is sitting on one of the poorest part of West Africa is having a collection efficiency of 98 percent. If that country will get electricity from Ivory Coast and pay for it I cannot see any reason someone will say that Nigerians cannot pay. I want to tell you that Nigeria has the cheapest tariff in West Africa.”

He added: “If we are not careful we will continue to sink money in the power sector and still remain on 4000mgwts power generation in the next three years.”

He noted that Nigerians must be prepared to pay for electricity in order to improve power supply.

Mohammed said no private investor would invest in the power sector without the assurance of favourable returns.

“Nigeria has done the power sector reform and handed over the distribution sector to the private sector six years ago. Within these years the federal government has sunk N1.5 trillion in the power sector because contracts were not effective and the revenue flow is not there. So the government was guaranteeing the generation companies to continue to do business.

“But do we want it to continue? No. So how do we stop it? We can only stop it when contracts become effective by assuring cost-reflective tariffs. What the poor need is effective metering of electricity to enable them manage their consumption,” he said

He disclosed that the new lines would improve capacity from the current 200mgwts to 650mgwts.

He also stated that the Ikeja West has the largest sub-station in Nigeria as well as the highest number of industries in Nigeria. “So, we want to ensure that the lines in this place will carry enough power so that we can have enough power for Ikeja.”

He also used to occasion to clarify that TCN has no controversy with the power distribution companies nor with Lagos State, which is giving the company one of its strongest support.

“Funding is not our problem as donors are knocking at our door. But we are the one saying no. We are not reckless in speeding neither are we bankrupt. Let me inform you that TCN has changed. We are not what we used to be and we hope to transform it into one of the best in the world,” he said.

The TCN boss stated that Ikeja West line, which extended from Lagos State to Abeokuta in Ogun State, was built 40 years ago with limited load capacity it could carry.

“So, we need new lines that can carry enough energy to supply the new transformers we have installed. What we are doing is to change those old wires to what we call gap conductors that can carry two and half times the capacity of the old wires and can withstand up to 210 degrees centigrade temperature. It is also lighter and will not impose pressure on the towers,” he said.

He added that “the time frame for the rehabilitation is six months. But I hope the contractor will finish earlier because there are other works he will like to take. Outage is a thing about the strength of the lines and this project will strengthen the lines and reduce outages.”

Speaking during the ceremony, the Permanent Secretary, Ministry of Energy and Mineral Resources, Lagos State, Mr. Abdulahmed O. Mustapha, assured the TCN of the readiness of the state government to provide an effective partnership that would enhance speedy execution of the project.

Mustapha said the state government would assist in resolving any issue on right of the way.