After I had read a news report on a recent media session by the Director-General of the Bureau of Public Enterprises, Alex Okoh, two things flashed across my mind : firstly, the image of the man with a gong on my street in downtown Surulere area of Lagos, and then, the worrisome spectre of yet another bungling of government’s effort to straighten out the Power Distribution Companies (DISCOS), the perennially problematic distributors and retailers of electricity.
In his “interactive session with journalists” in Abuja, the BPE Chief Executive mounted a robust argument against what he described as attempts at “renationalization of the power sector” particularly the DISCOS.
According to Okoh, “it will be a fundamental error if we go in that direction.”
Rather, Okoh, who appeared to have spoken from both sides of the mouth, wants “some sort of subsidy” to be given to the DISCOS to shore up their operations.
He also blamed the woes of the companies, not on what he admitted as their “lack of capacity, whether financial or technical” but on the opaque reason that “the market dynamics of retailing power is not right.”
The DISCOS, which have been the crybabies of the power value chain since their creation seven years ago from the unbundling of the former Power Holding Company of Nigeria (PHCN), could not have found a better defender!
Against the backdrop of the creation of a committee by the National Economic Council (NEC) late last year to review the ownership structure of the DISCOS as part of a definitive action to ease the pain and suffering of electricity consumers, the “we” in Okoh’s recommendation was clearly referring to the Mallam Nasir El-Rufai led review committee. Coming from the BPE, such a recommendation preempting the way the review committee should go or not go, was quite strange, if not alarming. Thus my fear that some forces may already be at work to bungle the committee’s work.
The BPE DG’s comments had also evoked the image of the man with a gong on my street because that guy’s activities had to do with the disastrous performance of the DISCOS in the vital area of infrastructure upgrade as provided for in their contractual agreement with the Federal Government.
Like the town crier of old, the man had roused residents of six streets in my area with loud bangs on a gong-like piece of metal on four consecutive Saturday mornings late last year. His message was constant: all houses should send representatives tomeetings to deliberate and take decisive actions on how to lift the area out of “darkness”. Electricity supply to the streets concerned had suffered persistently from the decayed power equipment and installations in the area particularly the connections to the transformer serving the wider zone, weak cables, convoluted wiring, fuses on the transformer and so on. It was time for self-help, the “gong man” would say, since entreaties to the DISCO serving that part of Lagos had brought, at best, half-hearted actions while the power interruptions persisted.
To be sure, the power distribution outfits have become famous largely for prompt delivery of estimated electricity bills, disconnection “raids”, non-supply of meters, poor corporate governance and a powerful lobby. The point is that the DISCOS appear to have gotten used to having their way. For example, the responsibility to progressively bridge the huge metering gap which existed at their inception in 2013, was a critical item of the key performance indicators enshrined in the Performance Agreement when they took over the electricity distribution aspect of the power delivery and value chain. This obligation was activated by the power sector’s regulatory authority, the National Electricity Regulatory Commission (NERC) through its Credited Advance Programme for Metering Implementation (CAPMI) in May 2013. Although, the scheme was designed to help the DISCOS achieve their metering obligation, the poor response of the power distributors virtually truncated the scheme.
The apparent failure to meet this critical obligation literally forced the NERC to introduce the Meter Assets Provider (MAP) scheme, which imposes heavier immediate financial obligation on the electricity customer than the flexible CAPMI scheme. For most electricity consumers, the continued existence of the estimated billing system due to the failure of DISCOS to fulfill their metering obligations is sufficient reason for the review the operations of the distributors and imposition of appropriate sanctions, which should not preclude the withdrawal of theoperating licences of erring outfits.
Besides, many Nigerians are familiar with the disruption of the refreshingly exciting and productive “Incremental Power” phase of the road map for the power sector during the tenure of Mr Babatunde Raji Fashola, SAN, in the Power Ministry. Fashola, as one writer said, literally “cracked the DNA” of the seemingly ungovernable power sector. The initiatives he introduced saw power generation increase rapidly from 4,000 Megawatts in 2015 to a peak of 7,000 Megawatts by 2018 through a reversal of the abysmal budgetary under-provisioning for the power sector, aggressive revival of abandoned power projects and execution of new projects, amongst other fresh measures.
However, the incompetence of the DISCOS in the critical area of absorption capacity considerably dampened the impact of the “Incremental Power” phase of Fashola’s blossoming power sector road map at the time. With their dilapidated equipment and infrastructure which they refused to upgrade as required by the Performance Agreement they had signed with the Federal Government, the DISCOS simply could not evacuate the power generated by the Electricity Generation Companies (GENCOS).
Clearly the aforementioned failures and inadequacies of the DISCOS cannot be discountenanced as the Director General of the BPE, Mr Okoh seemed to have done in his media session. This would be a disservice by the BPE to millions of Nigerians suffering under the yoke of the estimated billing system and abysmal operational incapacity of the DISCOS. After all, the BPE which he superintends has, as part of its mandate “the Management of post transactional performance monitoring and evaluation” privatized public assets. In this regard, theexpectation of the Nigerian public is that the BPE should not be advocating the commitment of huge tax payers money to fund the perennially incompetent and inept companies ripping them off and which have failed to justify previous government’s regulatory interventions.
Rather than engage in such absurdity, Okoh and his team should, as required by the BPE mandate, periodically use the extant service level performance monitors to determine whether the performance of organizations such as the DISCOS meet up to the provisions in the contractual agreements they had signed, and, where they had fallen short, bring their cases before the National Electricity Regulatory Commission for appropriate sanctions.
Better still, being a government employee who should be protecting the interest of Nigerians, Okoh should, at least for the time being, keep his opinions on the operations of DISCOS from the public sphere and allow the Nasir El Rufai-led committee set up by the National Economic Council to review the operations of the electricity distributors to complete its assignment and come up with its findings.
*Bolaji Akanni is a Lagos-based public commentator.