A Review of the Nigerian Energy Industry

Transformer racketeering continues amid poor power supply

power_transformer05 July 2014, Lagos – Nigeria’s power problem has many faces and so does the problem faced by Nigerian consumers of electricity.

In the face of the infrequent supply of electricity in many parts of the country and despite the privatisation of the power sector, Power Talkback has learnt that transformer racketeering still continues in the country.

In December 2012, Alhaji Bola Olaokun packed into his new house at Pakuro area of Mowe, Ogun State. He, like other landlords, in the area paid more than N40,000 for the supply of a new transformer that would serve the residents of the community.

He said the residents of the area, which is a new developing and largely middle class settlement, were forced to pay because they were told that it might take many years for them to get a new transformer if they had to wait for government’s approval for the electrification of the area.

“We paid for the transformer and we paid for the cables that were used. Of course, we knew it was not supposed to be so, but are we not Nigerians? We know how things work here now. It was either we continued to suffer while waiting for government’s intervention or we help ourselves,” he said.

Stories such as Olaokun’s are common especially in Lagos where new settlements are sprouting.

There have been reports in the past, before the privatisation, of cases where residents of areas contributed millions of Naira to get transformers.

It was reported last week that an estimated 81 million Nigerians are currently not connected to the national grid or to any independent power source apart from the use of generators. If reports reaching Power Talkback is anything to go by, it seems some officials of power distribution companies are cashing in on the power situation in the country to fleece residents.

A resident of Oke-Afa in Isolo area of Lagos, told our correspondent of a similar situation in his area, but this time, not for supply of Naira transformer.

“We pay thousands regularly to maintain our transformer. We did not have any problem with that so far as we are supplied electricity. But we are really angry now because in the last four months, we have not had electricity supply. That is really annoying,” he said.

The young man said he preferred anonymity because he did not want to be identified as the whistle-blower.

In another part of Lagos, Alhaji Olugboyo, who is the Chairman of Irebami Community Development Association in Ikotun, told one of our correspondents how the issue of installation of a new transformer and purchase of cables pitched the association against some residents in the area, an issue in which the police had to intervene in.

“We levied each house so that we could raise more than N1m, which we needed to purchase a transformer and cables that would be used for its installation. As an association, we had the responsibility to look out for the welfare of our community,” he said.

But one of the landlords in the area kicked against the idea and the matter became a police case.

According to Olugboyo, before the association decided to help itself, the area had been in darkness for a long time as the people had to depend on the use of generators day in day out.

There are many cases such as these, in which Nigerians part with huge sums of money to provide transformers in their areas so that they could be connected to the national grid.

This is despite the fact that in the 2014 budget, N20.5bn is allocated for the “construction and provision of electricity.”

Also the Bureau of Public Enterprise also hinted a few days ago that the privatised electricity distribution companies in the country – Abuja, Benin, Enugu, Ibadan, Jos, Kaduna, Kano, Eko, Ikeja, Port Harcourt and Yola – would invest a total of N55.69bn in the sector this year.

This is coming on the heels of recent promise that by the year 2020, Nigeria would have achieved 75 per cent electricity connection through the use of renewable energy.

However, sources in the industry told Power Talkback that some officials collude to make huge sums of money from communities where residents want to hasten the process of procurement of transformers.

A source told one of our correspondents, “This is not a new issue. Officials have been making a lot of money on the issue of transformers for a long time. The process of applying for a transformer takes a while.

“But since a lot of people cannot afford to follow due process because of high demand, especially in a place like Lagos, they would rather pay huge sums of money to get it. Of course, someone who wants to make money would tell you to wait for a year before you can get it.”

But the spokesperson of the Ikeja Electricity Distribution Company, Mr. Pekun Adeyanju, shed light on this problem, saying that it is a scam that IKEDC is fighting against.

He said, “Nobody should pay for procurement or maintenance of transformers. We have said it many times, but it seems consumers themselves are not patient enough but would rather give their money to scammers.

“We have had cases before in which communities would get transformers for free but the community development associations would still go ahead and collect money from residents under the guise that they facilitated their procurement.

“People should be patient when they apply for transformers. We have already informed our officials of this. Any official of IKEDC that collects money from people for transformers would be sacked. That is how seriously we are taking the issue. IKEDC is not part of payment for transformers nor does money paid by consumers for transformers come to IKEDC.”


– The Punch

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