Vanguard (Lagos)

9 April 2014

Nigeria: Endless Agony, As Power Network Collapses

Photo: Vanguard
Electricity in Nigeria.

Lagos — Nigeria's Power situation has in the last couple of weeks attained a worrisome dimension, raising questions on the country's recent emergence as the 26th biggest economy in the world. Electricity consumers lament that they are rather paying more for darkness than light.

In the last one month, power supply across the country, especially in Lagos and Abuja, has deteriorated to the worst level since Nigeria's independence, despite promises made by the Federal Government over the years to ensure stable electricity supply.

Distribution companies are daily designing ingenious means to make consumers pay for electricity not supplied.

Former Minister of Power, Professor Barth Nnaji and chief executives of distribution companies (Discos) however blamed the energy problem on the country's power generating facilities which they said were obsolete and unreliable, dating back to 1896.

Survey

A survey by Vanguard revealed that on the average, Nigerians only have about two hours of electricity supply in a week, while some areas have gone without power for about three weeks. Residents who spoke to Vanguard in Apapa, Surulere, Ilasamaja, Isolo, Isheri, Lekki, Ikotun, Satellite Town, Iyana-Ipaja, Festac Town, Ketu, Ikorodu, Gwarimpa in Abuja, Nyanya and other areas in states across the federation, bemoaned their plight and condemned the epileptic power situation.

Some of the residents called for the cancellation of the privatisation of the Power Holding Company of Nigeria, PHCN, saying that the new owners have not displayed adequate capacity and capability to tackle the country's power situation. Efforts to get the authorities to comment on the sufferings of Nigerians as regards power supply proved abortive. as they were yet to respond to questions sent to them on the issue at press time. Officials of some of the Discos also failed to respond to e-mails, while some of them claimed that the amount of power given them has been reduced drastically.

Unearned revenue

Reacting to the power crisis, Mr. Okolie Moses, an official at Kinetic Associates in Surulere, said: "We were expecting that the new owners would in the first months give Nigerians hope. But to my surprise, they have failed to change anything. They complained that the situation was so bad, as if they were not aware of this before they bought the assets. In my area, power went off on January 22, but they could not restore it until March 5. We had no light throughout the month of February, yet we got a bill for February. If the private hands are effective, so to say, we don't expect such things to happen."

Mrs Ijayemi of KFA Monograms, said: "Power supply has gone from bad to worse. As far as we are concerned we have not seen the difference. The situation has worsened to the extent that presently, we have not had power at all for five to six days. When it comes, it only lasts for five minutes and it's gone. We really do not understand what is going on; it has never been this bad in the past 10 years; it has never been as bad as this."

On his part, Mr. Satiregun Mujide, a medical doctor at Tolu Medical Centre, Ojo Road, Ajegunle, Lagos, said: "Electricity supply has always been the way it is but this era is often bad and not encouraging. Going back, there was a little improvement in the supply but now we don't really understand if we are going from bad to worst.

"This epileptic supply affects our budget because we have our plans. Early last year, there was a fair power supply but by late last year, there was a serious drop and it is quite discouraging because, we expect these owners to be more impressive but the reverse now seems to be the case.

"We pay about N60,000 as bill and even with this poor supply our money has not dropped and that looks like fraud. Light is the bedrock of an organization and business cannot thrive without electricity supply. The government should join these owners and understand what is needed to improve the sector.

Also speaking, Mr Emeka Esume, a manager at Ndokwa Entertainment Centre, also at Ajegunle, said: "The new owners are not trying at all and it is affecting business because we have to depend on generators and that causes noise and other expenses.

"The billing system is ridiculous because the less we see this supply the more and constant our bill is. "We pay as much as N85,000 and there is no decrease even now that we are not seeing the benefit of what we are paying for."

DISCOs blame transmission

An official of a distribution company, who chose to remain anonymous, blamed the Transmission Company of Nigeria, TCN, for the epileptic power situation, saying that the country's transmission network cannot effectively deliver the entire amount of electricity generated to households across the country.

The official, who also cited inadequate supply of gas as a major problem, disclosed that prior to the handover of the power assets to the new owners, Lagos State used to get about 900 megawatts of electricity from the national grid, but it dropped to 300MW after the handover.

He said they had to grapple with the problem of distributing the 300MW to households across the state in a fair manner, hence the rationing and erratic power situation in most cases.

Also, key sources in the power sector who spoke to Vanguard on the condition of anonymity, alleged that the last privatization exercise in the power sector was designed to defraud Nigerians and not geared towards ensuring stable supply of power.

According to one of the sources, the fact that the Federal Government is supporting the N750 fixed charge, whether there is electricity supplied or not, is a pointer to the fact that government is in connivance with the new owners of the privatised assets to shortchange Nigerians.

Another source wondered why the Federal Government was more concerned about the investors recouping their investments, rather than ensuring that they improve the level of power supply in the country. The source said it is almost six months since the handover of the assets to the new owners, yet, there has been no significant improvement in power supply.

Electricity infrastructure obsolete, unreliable - Nnaji, Discos

Meanwhile, former Minister of Power, Professor Barth Nnaji and chief executives of Distribution companies (Discos), yesterday, declared that Nigeria's power generating facilities are obsolete and unreliable.

Speaking at the Seventh Lagos Economic Summit (Ehingbeti 2014), Nnaji disclosed that there is presently a wide gap between electricity supply and demand, while the transmission infrastructure are weak and inadequate. He further stated that the distribution network is overloaded, while the rate of technical and commercial losses are very high.

Nnaji suggested a short term emergency solution to the power problem in the area of embedded generation using the ring-fencing method, whereby some areas are divided into economic clusters.

He said Lagos has all the facilities to deliver stable power, adding, however, that it has to assert its influence by partnering with the distribution companies to plan for efficient and effective distribution of power within Lagos.

Also speaking, Mr. Charles Momoh, Chairman, West Power and Gas, owner of the Eko Distribution Company, emphasised the need for revamping of the country's power infrastructure, saying that the country is still using power infrastrusture that dates back to 1896. He further blamed the epileptic power situation across the country on the non-availability of gas and the reduction of power supply to the distribution companies.

Momoh further blamed the Transmission Company of Nigeria, TCN, for the "blinking" power situation, saying: "The TCN introduced frequency relays to protect their equipment, which is at the expense of consumers' appliances, because this relay is responsible for the two minutes on and off power situation in Lagos."

On his own part, Mr. Sola Adeshina, Managing Director, Sahara Power, owner of the Ikeja Distribution Company, also noted that unavailability of gas and a non-cost reflective tariff structure is hampering the effective delivery of power to consumers.

Faulty asset valuation

A former Chief Executive Officer, Nigerian Electricity Regulatory Commission, NERC, Dr. Ransome Owan, had in a document obtained by Vanguard, titled, 'Operation and Maintenance (O&M) issues in the privatised power market' disclosed that the new investors acquired assets that are problematic.

He further noted that a faulty valuation system was used in the sales process by the Federal Government. He disclosed that the privatised businesses are full of problems including the support systems, both from within and without. According to him, the transaction leading to the sale of the assets was based on government asset valuation and not a business valuation.

He further stated that the business turnaround plans tendered during the bid round require re-examination based on facts discovered.

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