Still On The Lessons FG, Power Firms Need To Learn

One of the most important lessons from the Transmission Company of Nigeria’s unfortunate disconnection of the nascent Aba Power company from the national grid for 10 days starting last April 21 was the need for decision-makers in Federal Government organisations that provide ancillary services in the power sector such as the TCN and the Market Operator ( a unit in the TCN,) as well as the Bureau of Public Enterprises (BPE), to develop a business-oriented consciousness.

As the case with Aba Disco in April has indicated, these government agencies seem to perceive private sector operators as rivals who should be clobbered with a sledgehammer of Federal Might, rather than as business and development partners who should be encouraged to thrive and succeed in a mutually beneficial relationship.

In his well-circulated article, Dr Yemi Balogun advised the FG firms to borrow a leaf from Professor Dora Akunyili’s National Agency for Food and Drug Administration (NAFDAC) which, though a regulatory agency or a so-called policeman of the food and drug sector, spent years educating and guiding firms producing and importing medicines and processed foods in the country; instead of using the sledgehammer on these firms anytime they erred, NAFDAC punished them with care and understanding, as a good teacher would do to his or her students. The result was that the businesses supervised by NAFDAC began to post superior profits and became more compliant quickly. On Professor Akunyili’s 50th birthday in July 2014, the food and drug companies held in Lagos an unrivaled birthday celebration in Nigerian history. An appreciative nation paid a deserving homage to a most accomplished public servant and NAFDAC became the most admired and trusted public service organisation.

READ ALSO: TCN Finally Reconnects Aba Power To National Grid

In a response to Dr Balogun’s thoughtful piece, Dr Fredrick Barde, an international management professor in the United Kingdom, called the attention of Nigerian state-owned enterprises (SoEs), including regulatory agencies, to the need to learn from their Chinese counterparts who have the mindset of businessmen and women. Chinese public officers, including regulators, go out of their way to encourage businesses to succeed. In fact, as Professor Barde has informed Nigerians, one of the major criteria for promoting executives to the next level in China, which has five tiers of government, is the number of domestic and foreign businesses they bring to their territories annually. This practice encourages healthy competition among state and Communist Party officials, resulting in China’s rapid development.

As someone who has been consulting for some power sector firms in the country, I am struck by the enormous wisdom in the articles by Dr Balogun and Professor Barde, who are authentic Nigerian patriots. There is a particular area where government agencies can easily help power firms, especially distribution companies, without losing even a kobo. One is referring to the time of the month when Federal Government organisations cut off feeders of DisCos from the grid to compel them to pay up. They frequently do so from the second part of a new month. In the case of Aba DisCo, the TCN cut off all its 29 feeders on April 21, at the height of revenue collection, and on April 26 descended on three feeders from the Kaduna Electricity Distribution Company to force it to pay N51 billion.

DisCos send out their bills to customers in the first two weeks of the month. They start revenue collection in the second part of the month, and this frequently entails disconnecting electricity users who fail to pay for the previous month(s). But the second part of the month is when the Market Operator, TCN, or even electricity suppliers like the Niger Delta Power Holding Company yank off DisCo feeders from the national grid or cut off or reduce supplies, throwing large numbers of customers into darkness. DisCo revenue officials who go out to the field during this period are regularly attacked physically by angry customers who have no electricity supplies. Some have their ladders removed and seized when they are already on the pole; their lives are thus put in great danger.

In other words, when FG agencies in the power that provide ancillary services want to force power distribution firms to pay up and cut off their feeders from the national grid and do so in the second part of the new month when DisCos are collecting revenues, they end making the distribution firms collect less. And when the DisCos have less money, they cannot meet their obligations to electricity suppliers and ancillary service providers. The situation becomes a loss-loss for every stakeholder, including the government, which loses tremendous goodwill from the public as the latter grows increasingly disenchanted.

Electricity and gas suppliers as well as ancilliary service providers can get their money only when DisCos are able to collect reasonable revenues. When the distribution companies pay, generation companies can pay gas suppliers like Shell, ExxonMobil, Chevron, ENI, Seplat, etc. As everyone knows, the electricity business is a value chain. A chain is as strong as the weakest link. Therefore, to encourage DisCos to generate more revenues which will, in turn, benefit all players in the power sector, FG agencies should not cut supplies in the second part of the month, but in the first part when electricity bills are being distributed and customers will be willing to pay to have power restored or not to be disconnected from their meters or poles.

All stakeholders in the power sector need constant meetings to know the challenges facing one another and how they can assist each. The current mindset where FG agencies see themselves as policemen in the streets who display cruelty under the guise of of instilling discipline in the electricity industry is counterproductive. They also are great losers. Nigeria needs people and organisations with a win-win mindset for the country to get it right in the critical power sector. The power sector need not remain the albatross of infrastructure development in Nigeria which has been delaying the country’s economic takeoff.

Engr Mohammed, an electricity consultant, wrote from Abuja.

Engr Abba Musa Mohammed

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