FREE METER PROGRAMME AND UNPAID DEBTS
The mass metering project is in danger, writes Akintunde Ojetimi
The national mass metering project embarked upon to provide prepaid meters to electricity customers who have suffered from the estimated bills by the distribution companies, known as DISCOS is in very serious danger of failure.
· It will be recalled that the meter provision end of electricity distribution had always been plagued by non-availability of prepaid meters to consumers who are being exploited on a monthly bases by the marketers of DISCOS who harass them with deliberately high estimated bills. During the tenure of Mr. Babatunde R. Fashola when he combined the portfolios of Power, Works and Housing Ministries (2015 to 2019) a meter program called Meter Assets Provider (MAP) scheme was introduced through the Nigerian Electricity Regulatory Commission (NERC), the main regulatory body in the electricity industry. Although this program and the guiding rules was enacted by NERC in 2018, serious meter installations under this program did not begin until 2019 and it ran through most of 2020 with measured successes in various DISCOS area of franchise. Under this program, consumers of electricity were able to pay for their meters in a joint account run by DISCOS and the MAP entities that import, assemble or manufacture the meters.
However, when government made an assessment of the impact of MAP, one of the drawbacks was the inability of many customers to pay for the meters. As the country’s micro and macro-economic indices became more unfavourable for Nigerians (especially with the onset of Covid-19), government intervention in meter provision became necessary. This situation brought the introduction of National Mass Meter Program (NMMP), in which the federal government will enter into contractual agreements with the Meter Assets Providers and the DISCO under whom they operate to provide particular number of meters to be installed for the customer in each location. Under the first stage of this program, a total of one million meters is supposed to be installed (based on a document sighted by this reporter titled: “Analysis of Meter Deployment Across DISCOS Report for the Month of November 2020”). A staff of one of the Lagos-based DISCOS informed me that the total number of meters installed under this first stage of mass meters is still being compiled by the NERC but that everyone is preparing for the second stage of mass meter deployment, as government recorded high success in the first stage.
Unfortunately, the take-off of the second stage may not happen so soon, as feelers from operators in the meter business (MAP companies) are owed huge sums of money by the government after the conclusion of the first stage. As a result of this debt being owed by government, many of the MAP companies who supplied the meters on behalf of government also owe those who supplied goods (mostly the various parts that make up a complete meter, like circuit breakers, seals, wires, etc.) and also those who provided services by the installing of the meters. This reporter made various attempts to contact the different meter importers and manufacturers for confirmation of this development but none was prepared to volunteer any information. One of the foreign based meter manufacturer whose chief executive was sent email about three weeks ago by this reporter refused to respond. Also, a major Nigerian-owned meter manufacturer with meter supply contracts under a lot of DISCOS refused to respond to questions about the debt situation but a key staff who wishes to remain unanimous admitted that they are owing their contractors but the amount poses no problem to the company as they are in a position to offset debts owed, with or without government paying the balance owed them. The same source also confirmed that they had settled the bulk of debts to its contractors at the end of the first stage of the program. Other MAP companies contacted also failed to shed more light on this situation as they were not prepared to volunteer any information.
· However, a source in NERC directed this reporter to the Presidency, Ministry of Power and the Central Bank of Nigeria to know why the debts owed have not been settled. The same source claimed that the amount being owed to the meter supply companies should not prevent them from paying their contractors as they are expected to have a level of healthy cash flow based on the contracts entered into with them on one hand and government on the other hand. Probing this source further, it was revealed that most of the MAP meter suppliers had received various huge sums from government but immediately took those funds out of the country under the guise of procuring more meters. What government expected of the companies was to reserve a fraction of those funds in Nigeria to help them take care of the liabilities of those who supplied goods and services to them. Our NERC source also disclosed that an investigation is ongoing to know what each company has been paid so far, how much has been moved out of the country and what is outstanding for settlement by government. The source, which said the exact amount owed each company by government cannot be verified from NERC’s end, disclosed that it is not so much to the level of stopping the meter suppliers from discharging their financial duties to small companies under them. The source further claimed that this administration had done a whole lot in the area of providing prepaid meters to Nigerians as no previous government had considered this action as the right step to ensuring steady power supply. Government had paid several billions of Naira to the MAP Meter suppliers and this should have trickled down to the small companies under them.
· I have not been able to speak with anyone from the Presidency, Ministry of Power or CBN, despite various efforts at making contact with the relevant officials as at the time of writing but it is hoped that government will address all the issues when this article is published to enable the public have its own side of the story.
· Some of the contractors spoken to expressed reluctance in resuming the provision of services to the MAP meter suppliers if their debts are not paid, since many of these small companies are facing financial crisis. Many of them owe their workers and finance companies and banks from which they borrowed money to execute jobs for the MAPs. Given the situation most of these contractors have found themselves, the important poser to the MAP companies is that why are they linking the payment due to these small companies to the debts owed them by government? The contract they signed with government has nothing to do with the contracts of supply they signed with the small companies. Most of these poor businesses being owed by the MAP companies are afraid of going to court to seek justice because of the fear of being victimized as they would not want their means of future business to be truncated by the bigger MAP companies who would likely band together through their Association (named Association of Meter Asset Provider Companies) to blacklist the small contractor who dares to make such suicidal move.
· Therefore, it is the consumer of electricity who is expecting to be provided prepaid meters upon the start of the next stage of mass meter that will be the ultimate looser in this unfolding drama. This reporter sincerely believes that the government will urgently look into these debt issues and quickly deal with it before it is too late. It is very wrong for parties in a contract not to follow the letters of that contract. This is how past governments have behaved and ended up paying judgment debts to many unfulfilled contracts. It has become the normal thing in Nigeria that the bigger an organisation thinks it is, the more it wants to disobey the tenets of agreements signed with small companies. Even foreign companies operating in Nigeria quickly imbibe such bad behavior against small contracting companies working under it. And the nature of our legal system is permissive of such bad behaviour. An online research done by this reporter shows that other African countries like Ghana, Kenya, Rwanda, Tanzania, Zambia and several Francophone countries take the protection of their small businesses very serious. They have worked very hard to ensure that no entity, no matter how big, can owe their small businesses beyond the agreed date. Not so in Nigeria. Even some of the business agreements signed between the MAP companies and the smaller service companies can only be compared to modern slavery. An agreement sighted by this reporter between a major MAP company operating under Ibadan DISCO and the small meter installation company will bring revulsion to any fair human. Some sections of this agreement only betray the MAP company as being unwilling to meet up with its obligations. The big companies bully and intimidate the struggling small businesses trying to break even. At the end, it is only the country that will be the bigger looser. All over the world, small businesses are responsible for over 40 per cent of employment, especially “blue collar” jobs. But when the harsh operating environment is killing off these small businesses on a daily basis, where would the employment and regeneration of the country’s economy emerge?