With nine years of electricity privatisation in Nigeria, the reality today is the failure of service providers to meet the demand of businesses and households and instead of providing reliable power supply to justify the huge resources poured into the process by the federal government, electricity distribution companies, especially in Lagos, are still giving excuses, reports Festus Akanbi
In a period of the abysmal performance of most of the licensed electricity distribution companies in Nigeria, there appears to be a groundswell of opinion favouring a revisit of the 2013 power sector privatisation which put the operation of electricity generation and distribution in the hands of private sector owners.
Interestingly, governors of many of the states in the country are busy lamenting the plight of business owners over poor delivery by the respective electricity distribution companies, a development which has in turn incapacitated taxpayers from meeting their obligations to states.
This abysmal performance is coming on the heel of the announcement by the federal government that Nigeria has added at least 4,000 megawatts of power to its generation capacity, bringing the total to 22,000 megawatts of its generated power available in the country, the Minister of Power, Mr. Abubakar Aliyu, said on Tuesday.
The ministry is also said to have raised transmission capacity with additional 6,000 megawatts of power, thereby strengthening the capacity of the Transmission Company of Nigeria (TCM) to transmit more power across the country.
The minister said however that despite the increased generation, the TCM and the distribution companies are unable to receive and deliver all the generated power to the homes of Nigerians and that something was urgently being done to improve the situation.
Power Outages in Lagos
However, it has been complaint galore over the worsening performance of the two major distribution companies in Lagos and its environs despite the status of Lagos as the undisputed economic capital of Nigeria as the two distribution companies in the state – Eko Electricity Distribution Company and the Ikeja Electricity Distribution Company – have failed to satisfy electricity users.
Some Lagos residents who spoke with our correspondents last week said that power outages have reached an embarrassing proportion in the state, forcing businesses and households to rely on generators. The problem increased with the recent scarcity of petroleum products, forcing companies to work below capacity, especially in Lekki, and in Ikoyi and Victoria Island, areas that host the headquarters of leading business organisations in the country.
For instance, in the last two weeks, residents of some areas of Ikoyi have had to rely on alternative sources of power as Eko Disco failed to provide an adequate power supply. Residents said they had to endure the situation as noise and fumes from generators took over the environment with its attendant health issues.
A resident of the Ikoyi area of Lagos, who spoke under the condition of anonymity said it is a thing of shame that Eko Distribution is denying the fact that many homes and offices had to source power independently.
“It is a big shame that after nine years of the privatisation of the electricity sector in the country, we are still battling with incessant power outages.
“By denying us power supply, it means these distribution companies either do not know what they are doing, or they simply cannot meet our electricity needs after all we are operating a prepaid system which means the more power supply we get, the more revenue will flow into their accounts,” he said.
He lamented the fact that some businesses have to factor in the cost of maintaining generators into their expenditure, a development he said will impair their balance sheets at the end of the year.
Some residents said the staff of the Eko Distribution Company that came to the area to attend to the faults in some of their transformers last week couldn’t offer convincing explanations when residents confronted them.
For Ikeja Disco, complaints from electricity users include failure to replace obsolete transformers, power rationalisation and failure to distribute meters to many customers, who pay higher than those with meters.
In areas like Allen, and Ikeja with a huge population of businesses, the service is nothing to write home about. Some hotel management had to increase their charges as the bill for maintaining generators keep soaring.
In Lagos suburbs especially at the border towns between Lagos and Ogun, the problem includes a lack of adequate and functional transformers, failure to distribute meters and power shedding, among others.
The result is the increasing demand for petroleum products to power generators thereby incurring additional costs despite the huge financial commitment of the federal government to the power sector privatisation.
However, when contacted, the spokesperson for Eko Disco, Mr. Godwin Idemudia, denied the allegation of power outages, as he claimed that there was no power outage in most parts of the area, especially Ikoyi, except for faults in one of two streets.
He said: “It is not true that there was a blackout in Ikoyi. I have lived in Ikoyi for about 20 years. If our customers complain that the supply is down, we will tackle it.”
Blaming most of the power outage in Lagos on poor supply from the national grid, Idemudia said, “On merit, we cannot give what we do not have. If we have power from the national grid, we will give it out.”
He, however, promised that Eko Disco will do everything possible to satisfy its customers.
Double Jeopardy
According to a power sector analyst, Sunday Onyemaechi Eze, customers are paying through their noses for ineffective services never rendered while still buying fuel and diesel at exorbitant rates to power their businesses and homes.
“Companies are leaving Nigeria in droves as a result to nearby African countries to produce and thereafter sell to Nigerians at exorbitant rates too. The list of communities with no access to power supply for over one year abounds. Many customers are regularly confronted with unnecessary crazy bills. Customer complaints are never addressed promptly. It is now normal for communities to buy and or contribute to repair faulty transformers, pay to repair faulty lines, buy broken poles and meters etc,” he said.
Eze, who justified the recent takeover of five electricity distribution companies by Fidelity Bank, said: “The takeover revealed the sick nature of the power sector. It proved that all is not well with the privatisation and the processes which led to it. It was simply a matter of time before the consciously covered-up sectoral blunder emerged in the public domain.
“The entire privatisation process should be reversed without further delay. The ideal situation would have been for those who think they have the will and capacity to do business in the sector to come up with fresh plans and initiatives. Build from the scratch their generation and distribution companies and find a way of selling their products to customers and compete with existing government-owned companies. That they did not do!”
Wake-up Call
Already, the Lagos State Government is calling for an urgent review of Nigeria’s power generation and distribution law under the purview of the federal government given the huge amount spent on diesel daily by industries especially the manufacturing sector in the state.
The state Commissioner for Energy, Olalere Odusote, who made this call at the end of the recent 3rd Real Estate Market Place Conference and Exhibitions said that personal energy generated by individuals, corporate organisations including real estate practitioners usually come with a huge financial burden in addition to the environmental pollution that comes with it.
According to him, the country’s real estate sector is still begging for huge investments in the area of power to make the sector more viable and attractive to potential investors. He explained that this became necessary as most private individuals and businesses in Lagos utilised diesel-powered generators rather than electricity from the national grid.
In what can be described as a vote-of-no confidence, the commissioner noted that the two distribution companies in Lagos State – Eko Disco and Ikeja Electric – established nine years ago, sell about 800 to 900 megawatts initially and have only improved to 800 to 1,000 megawatts nine years after.
Power supply difficulties cripple the agricultural, industrial, and mining sectors and impede Nigeria’s ongoing economic development. The energy supply crisis is complex, stems from a variety of issues, and has been ongoing for decades. Most Nigerian businesses and households that can afford to do so run one or more diesel-fueled generators to supplement the intermittent supply.
Since 2005, Nigerian power reforms have focused on privatising the generation and distribution of assets and encouraging private investment in the power sector. The government continues to control transmission assets while making “modest progress” in creating a regulatory environment attractive to foreign investors. Minor increases in average daily power supply have been reported.
