INTERVIEW! Federal Government is playing politics with electricity- DisCos





Chief Sunday Oduntan, is the Executive Director of Research and Advocacy, Association of Nigerian Electricity Distributors (ANED). In this interview with NIGERIAN TRIBUNE, he highlights series of challenges facing electricity distributors among other sundry issues relating to electricity supply. Excerpts:



Do you think the government is serious about having electricity supplied to Nigerians?

Well, let me start with 1989 to 1999, within that 10-year period Nigeria had four different administrations. These administrations were run by the following men: General Ibrahim Babangida, Chief Ernest Shonekan, General Sani Abacha and General Abubakar Abdulsalaam. Every year, within that 10-year period, they budgeted money for power and the population of Nigeria was also growing but they did not build one single power plant. That alone is a fraud. I do not want to make too many political statements but I keep saying that if we have had a visionary leader, like Chief Obafemi Awolowo, he would have set a template that nobody can go under in terms of performance. What we have had, has been rulers that are not leaders. From 1960 till date, no serious effort has been made to provide power. One person made some effort and that is former President Olusegun Obasanjo.

He was the one that started this reform in 2002, he even managed to get the law passed, the law that governed the power sector in 2005. He started building power plants, not without some challenges but objectively speaking, if what he started was continued by his successors, we would have had more light because what he started then was incremental power. He was positioning power plants all over so that if they bombed the one in Niger Delta there would be another one somewhere else and we can be using different types. When I was growing up, we were using hydro. Hydro is not enough, we should use different types. Later they started this thermal station.

The thermal station is the biggest in West Africa but it has never worked up to capacity. That is the leadership failure issue.

The truth of the matter is that there are too many conflicting interests in Nigeria. Without mentioning names, one of the people who wants to be president today is a major distributor of generator through some Indians and those who distribute generators do not want power. Sometime ago, I said one of the ways forward is that they should ban those of us, including myself who are actively involved in the power sector from using generators. So that if the minister of power and all heads of agencies who have something to do with power are not allowed to use generator, we would work harder and better but when we have an option, there is a comfort zone, a minister goes home and puts on his generator he doesn’t have to struggle to provide power so we are not sincere with Nigerians in terms of production of power.

The last government that privatised, when they were about to privatise, they sat down with people and signed a 10-point agreement and promised to do one to five of the agreement and expected the investors to do the remaining five. Now, the performance of six to ten is based on the performance of one to five but the government of Jonathan did not do any of them. The government could not respect the sanctity of contract in law. One of the things in that agreement is that if the investors fail to perform, they will take the Discos away from them for one dollar but I keep asking people with this epileptic supply, how come they have not taken it from them? This is because they know that they the government, have not done their bit. I love Buhari as a person particularly Osinbajo and I can vouch for their integrity but I cannot vouch for thoe working with them.

When you have a government that cannot even put its house in order, then you know that we are doomed and the same people want to come back in 2019. In summary the government of Nigeria is not sincere about power. But we know what to do.

The government cannot do it alone because there is no money. What the government needs to do is to invite  investors. The Canadian teachers’ pension alone has billions of dollars and are looking for where to invest but they do not want to come to Nigeria. They keep saying we are corrupt and Nigeria has not changed. Until some ex-governors are jailed, the power sector investors will not come and invest in Nigeria. The problem we have in Nigeria today is not that the government is not willing.



You said that the Jonathan government did not honour their agreement has there been any change now?

There hasn’t been any change. Government is a continuum. A new government that comes on board has to go back and look at that performance agreement so that before you start blaming the operators you know what they are going through. I used to be a teacher and a tailor if my boss doesn’t give me scissors then I won’t be able to cut clothes and if I don’t cut, then I cannot sew. Same with a teacher who is not provided with chalk and notes. It is the same in power. Until they do something, nothing will happen. What they are actually doing is that they are playing politics with power. There is so much disconnect in the power sector but because we are in the private sector we can say some things but even at that, we are careful because they come to us and say if you want to live long don’t say that because we know what they are doing. People are stealing and as long as they are doing that we won’t have power.



The government privatised the sector so that we can have improved power supply. Do you think that was a wise decision?

Very wise. There are many countries where government still controls the power sector. They did not privatise and they have excellent power supply but in the case of Nigeria, we went the Western world way we didn’t go east but the difference between us and them is that anything, under government is made the leaders property. If you don’t steal then you are foolish. Too many thieves. Even people in government don’t want to pay for power. Those are the people we elected. Too many people in Nigeria are indolent in power and we have them in all the states across the federation. I went to one state in the North, the governor was so wasteful and was not even paying for power so I told him that I would instruct the officials to cut off his light. Imagine using light in the government house and not paying. We cannot continue with this culture of theft. There are too many thieves. In Ogun state I caught a retired Permanent Secretary who was by passing. We caught him and he paid every bill. He was even begging us. If elite like that can behave in such a manner what do you expect from the low class? Same thing happened in Ikeja GRA we wanted to give them Pre-paid metre but they refused. Same happened in Bompai in Kano. I am the spokesman of  all the Discos, I travel round Nigeria and when I go round, I go into neighborhoods from house to house. In the course of doing that I get to see a lot of things a lot of scams some perpetrated by our own staff.



If you are running at a loss and your loss is so huge, what are you still doing in this business?

That was the reason for that force majeure and it was the second time. We did the same under Jonathan but they kept it under wraps and promised us they would perform.

We invested N2.4 billion in buying government asset and the contract has a clause that whenever the business becomes impossible to run due to circumstances beyond your control you have the right to say take your license and give me my money back. We are not willing to remain in this business. I serve all the investors and I know their problem. I told them in a meeting we had that if I had half of the money they have, I will never invest in the Nigerian power sector, I will take my money to Miami or Bahamas, put it in a bank, go by the seaside everyday and enjoy because they borrowed the money. That is the law, it was a 70; 30 per cent arrangement. You have to have 30 per cent of your own and borrow 70. They paid for this asset in dollars not naira. The exchange rate then was N157 but as at 2016 it became 198. Our current tariff is based on 198 but can anybody buy dollar for N200 now? So their repayment and interest is now like triple of what they the borrowed. So they want to get out but the government is not agreeing to it. They are still in the business because nobody is willing to give them their money and let them go. It is a regret now. Of the 11 Discos in Nigeria only one has foreign direct investor. A business man cannot give you money for free we call. It cost recovery, you have to recover your cost. The foreign investors are not coming because they can see that the business that government has done with its own people, so called friends, they have not honoured the agreement. Lack of respect for contract is what is scaring them away.



At a point you know that the Discos were trying to generate electricity, but along the line they stopped.

Embedded generation. What it involves is that a cluster can be chosen in a community and they will be generating electricity for them. It is like having a big generator and connecting some of your neighbors because even if you don’t connect them, you will still burn the same amount of fuel. Now, if we give you embedded generation you may be asked to pay up to 180 or 200 per KH, how many people will be willing to pay?

One of the problems facing that is that when we do assessments and see how much it will cost us to make it happen, it is much. Also, in most cases, we invite third parties to invest in it so it increases the expenses because we have to pay our workers and also give the investors a mark up. So when we do all our assessments we have to run away because people will not pay it. Some will even promise to pay but will scam us. What we hope will happen is that there was something the government was doing that we used to call stranded assets. Obasanjo was doing what we called NIPP away from NEPA the intention was to create some other pockets of generation that will not affect the national units. Those ones are now stranded because they are in different locations where there are no assess to fuel, in this case.

We have power plants like the Olorunsogo power plant in Ogun State, there is another one in Omotosho on the Benin expressway but they have never been able to perform up to half of their capacity. This is because when the Obasanjo regime established them they didn’t carve out an assurance of gas and until you do that, it won’t work because location matters a lot. Ogun does not produce gas and then we now have to pipe from Niger Delta but every time they break a pipe there, the turbines stop running.

So they are working on solar now but solar cannot give massive electricity but incremental which is bit by bit and can equally do a lot. They are working on different means of generating power. I believe that there is going to be light. What I know is that effort will be made in the next five years but we will not be able to see the results until another five years from now and that is if they start now. If they don’t, it will be pushing it forward. Power takes time, it is just like farm. You can’t get maize the same day you plant it. You have to wait. I have no doubt that there will be power but it will take time.



What are your expectations from customers?

We would like to change the perception of people if we could. People still look at this thing like a social service but it is not. It is a product not different from Fanta or Coke. We need our customers to know that. We need them to know that they have to pay for this product and also imbibe the culture of “see something, say something “ when people are tapping light without meters and using light without paying. People don’t speak up about ills like that.

Our expectation is for them to know that for them to have this product they must be prepared to pay. If we have 24 hour electricity today, and you have a two bed-room flat, one air conditioner, one fridge and freezer, one iron and sound system, two television sets and maybe a few ceiling fans and bulbs, the bill every month will not be less than N14,000. So if you are on minimum wage, you cannot pay.
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