16 January 2017, Sweetcrude, Abuja – The Senior Staff Association of Electricity and Allied Company (SSAEAC) has expressed its dissatisfaction with the performance index of electricity companies in the country, and has urged the Federal Government to re-examine the privatisation agreement of the nation’s power sector.
President of the association, Mr Chris Okonkwo, who made the call at an interactive session on Sunday in Lagos, decried what he called the dwindling fortunes of the sector after the private sector took over on Nov. 1, 2013.
The Minister of Works, Power and Housing, Mr Babatunde Fashola, had on Jan. 9 told electricity distribution companies in the country to either improve their service delivery or quit the business.
“We are working as hard as we can to make the environment more responsive to you and as I have said and will repeat that as pioneers, you will carry some burdens.
“You either improve your services or quit,” Fashola told the companies at the opening of the 11th Monthly Stakeholders meeting in Lagos.
According to Okonkwo, three years after the distribution and generation companies took over the electricity sector, they have yet to meet the expectations of the people.
“We think it is time to reappraise the content of the agreement that handed over the Power Holding Company of Nigeria (PHCN) to the private sector and its implementation.
“It is time to hold those who bought the power sector down for what they had signed that they will do. We want to know if they are doing well or not,” the electricity workers’ president said.
Apparently referring to Fashola’s warning, he said the government should not ask electricity investors to shape up, but to ensure that they implemented what was stipulated in the contract for the sale of the power sector.
Okonkwo criticised government’s plans to get N309 billion fund from the bond market to “finance shortfall” in the electricity market since it had already sold it to private investors.
He said, “Issuance of a bond will amount to spoon-feeding the operators for their inefficiency. The bond will be and at a cost to Nigerians as the risk of default will affect the Government Sovereign Guarantee and lead to an energy crisis in future.’’
The union leader said that among the challenges that have affected the growth of power supply was Discos’ inability to collect revenue for the energy generated and transmitted by the generation companies.
“Critical to the survival of this sector is revenue collection. There is a deficiency in revenue collection. These companies collect revenue of 30 per cent as against 60 to 70 per cent before privatisation and this is the money the sector needs to operate with.
“Where you produce something and the money for it is not recovered through the market, that product will go extinct. That is what may happen,” he said.
Okonkwo said that another challenge was because the country operated a grid system which remained the best option for cheap power.
“The grid system is where generators very big volume are integrated and connected into cadre and energy is exchanged throughout the interconnected grid.
“Where the money for the energy is generated and put on the grid cannot come back for the Gencos to plough back into production of electricity for the transmission to recover the cost of transmitting and delivering electrify to the Disco’s, then we run the risk for the whole system collapsing.
“That is why we need to raise alarm again that the Discos have no time to be asked to perform again. What should be done is access them and act on what they have attained so far, positive or negative,” he said.
On metering of houses, Okonkwo said it was sad that consumers were not metered without noticeable improvement in the area of generation or distribution of electricity while tariffs had been increased twice since 2013.
“Government should come in, apply the terms and conditions of the sale and see if we can correct the mistake,” he said.
Okonkwo said if the private sector could not manage the sector, the government should take it over, pointing out “electricity is a socio-economic sector that other sectors such as health and the economy depend on.”