Pro-labour group demands reversal of electricity tariff

02 March 2016, Lagos – Pr0-labour civil society group, on the platform of Joint Action Front, JAF, has demanded the total cancellation of the electricity tariff, and stop further pricing of electricity based on Multi-Year Tariff Order, MYTO, template. JAF is the umbrella body of civil society allies of the Labour and Civil Society Coalition, LASCO, including the Nigeria Labour Congress, NLC, and Trade Union Congress of Nigeria, TUC.

*Electricity sub-station.

*Electricity sub-station.

The group, in a position paper to the Adhoc Committee of the Senate and House Representatives on the recent hike in electricity tariff, also faulted the privatisation of the assets of the Power Holding Company of Nigeria, PHCN.

It therefore demanded the “Cancellation of the new hike in tariff, removal of fixed charges and a stop to further pricing of electricity based on MYTO template. There should be a new template of electricity pricing based on affordability using the utility allowance paid to the average workers as baseline.

“There should be unconditional metering of all consumers, reversal of the Privatisation of the PHCN, prosecution of looters and recovery of the appropriated fund ($16billion, $10billion, $12.6billion, etc) for electricity generation capacity.

“Private power operators should handover the public assets and should build their power plants with their private capital. Investment of recovered funds should be used to build additional power generation and transmission capacity. Electricity must be accessible and affordable to all.”

The Pro-labour group insisted that the privatisation of PHCN assets was a breach to the nation’s constitution which in section 16 of the 1999 , contends that  “by the provision of the 1999 Constitution, the electricity sector is a major sector of the economy and to that extent, the privatisation of such a sector amount to fraud.

“Power sector is capital intensive and public investment is the best method to deliver uninterrupted and affordable supply of electricity to the people. We hold strongly that if the privatisation of the PHCN is reversed and kept public, it can be made efficient if it is placed under the democratic control and management of elected committees of workers, consumers and representatives of the government in order to ensure that public resources spent to improve the power sector are not mismanaged or looted as has happened in the previous regimes.

“What this means is that instead of few bureaucrats appointed by the government dictating the workings of public enterprises, decisions must be taken by workers, consumers and technical experts elected into management committees at communities, state and national levels with the mandate to oversee the affairs of the power sector in compliance with the needs of the people.

In the paper by Dr. Dipo Fashina and Abiodun Aremu, JAF Chairperson and Secretary, respectively, argued that developing countries that privatised their power sectors in the past 30 years had experienced disappointing performances. These were accompanied with astronomic hike in tariffs, while millions of people are cut off from power supply as well as thrown out of unemployment. According to JAF,

“In Latin America, privatisation has been characterised by heavy job losses, failure to deliver promised new investment, absence of competition, performance failure and high cost to government and consumers. Enron used its political influence with US embassy and the CIA to win a $3billion contracts to build the Dhabol Power Plant, South of Bombay, India, in 1992. This was the largest foreign investment in India. Enron charged so much for electricity that the state government ended its agreement to buy the electricity in June 2001 and the plant was forced to shut down.

“Nigerians should know that most developing countries such as Brazil, India, Mexico, South Korea,Venezuela, South Africa and Thailand, have suspended or reversed plans for the privatisation of electricity sector. For example, the Power Generation in Iran and Nigeria 20 years ago were at par. However, Iran has moved to over 60,000 Megawatts, MW. The electricity system in Iran is entirely publicly owned. Even though, there is provision for private power generation in Iran, only 2% of electricity is generated privately.

“In the African experience, Cameroon is the only country in sub-Sahara Africa that fully privatised its power utility with one company in charge of generation, transmission and distribution. The company has only raised generation from 817MW in 2001 to 933MW at present. The euphoria that greeted the takeover has dissipated as the service has been characterised by frequent blackout, low voltage output, job losses and high tariffs. About 10 years into the takeover, the company provides services only to urban areas, and just for about 588,000 customers”.

  • Vanguard
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