Nigeria became the first African country to embark on large-scale privatisation of her electricity supply industry when PHCN was unbundled and subsequently replaced by 11 Distribution Companies (DISCOs),? 6 Generation Companies (GENCOs) and the Transmission Company of Nigeria, TCN, which owns and operates the Transmission Network. As with any other process, no one expected a perfect performance. Yet, it is in order to identify valuable lessons from this process in order to improve performance during future restructuring programme or privatisation of other public utilities, the time for which in my opinion, will soon be here. In addition, other African countries and or developing nations that may want to follow the example of Nigeria in this regard will benefit greatly too from the forensic evaluation of the process.

?

A serious flaw of the reform exercise is the non-availability of Gas to fire the many Gas Power Plants been built in the years running up to the eventual handing over of Assets to the new owners. Not only can the Government not guarantee the availability of gas and pipelines, most of the newly constructed Gas power Plants had no Gas Pipelines laid to their sites. In essence, there was inadequate Project Management expertise deployed. There seems to be a disarticulation between Gas and Power and both ministries moved at different speeds and wavelengths throughout the process. The synergy was not just there! It is nothing but incredulous that Gas Power Plants were established without the certainty of gas supply! Needless to say, there was no clear policy and viable commercial framework on Gas-to-Power in the many years that the reform took. This should not have been the case as it became a panacea for fatal flaw. It beats common sense that Nigeria supplies gas to neighbouring countries like Ghana whilst it cannot provide gas to fire gas power plants at home. Food for thought!

 

Another disconnect between the mediators of the reform and the realities of power systems is the non-establishment of a credible off-taker or buyer of electricity from the many licensed Independent Power Producers (IPPs). This meant that financiers became sceptical, and rightfully so, about providing required funds to build Power Plants without a guarantee that someone is committed to buying their potential power generation. In this regard, it is expected that the sufficient capitalisation of the Nigerian Bulk Electricity Trading Company (NBET) will enhance the release of required funds by financiers to IPPs that could come on stream to inject more power generation onto the National Grid.

 

The Achilles heel or weakest link of the Nigerian Electricity Power network is the Transmission system but those saddled with the privatisation process ignored this fact. The scale of reinforcement required on the Transmission Network is huge. The bureaucracy of Government in the affairs of the managing contractor led to delays in execution and operation of the terms of the contract with the consequent lack of grid wheeling capacity in the face of minimal Generation. If the Transmission Network is unable to cope with the limited Generation available now, further improvements or successes in Generation and availability of Gas, will not lead to availability of electricity in our homes because of insufficient capacity of the Transmission network to wheel available power. This again, is the result of not taking a holistic approach to this matter. At the same time, the distribution network is equally in a poor condition but with new owners not having enough power come through to sell to consumers, they did not have enough revenue to finance the much needed network reinforcement works required to improve the quality and quantity of electricity available to domestic, industrial and commercial consumers. Even if they did, electricity theft and issues of adequate metering will kill their investment. A lot of putting the cart before the horse here!!!

 

The management of information relating to the reform process was poor. Most politicians boasted of availability of electricity by the end of virtually every year since the year 2000. The citizenry became too familiar with the rhetorics after some time. The items of plant required in Power Systems take time to manufacture or procure and the project delivery guides of Long Lead items should have in the least, provided better estimates of time scales to politicians and their “technical” advisers as to the lead time before power will become available to Nigerians in Nigeria. The unending promises made Nigeria a laughing stock. TCN has failed to make people aware that lies about inadequate wheeling capacity of the Network is unfounded. when the total aggregate generation in-country is about 3GW and the quoted wheeling capacity of the transmission network is about double that amount, how is it that anyone in the right frame of mind will say the transmission network is the cause of the mayhem. This betrays the lack of knowledge of Power Systems in country and so these people can take everyone for a jolly ride to nowhere!

 

Judging by the pedigree of new owners of the power network assets, it is clear that the evaluation of technical/commercial bids of companies and partnerships that are interested in the Nigerian Electricity Power Network and Infrastructure did not put appropriate focus on the technical competencies of bidders. Yet, of all the criteria that must be used for evaluation of bids of this kind, the technical competencies of bidders should be given due importance. While the Commercial viability of a bid is important, it is equally important that those who will be saddled with the running of the electricity network of Nigeria be competent technically. Otherwise, the entire power sector reform exercise will be in futility! Ha!, this is not delightful news to anxious Nigerians who have long waited to ?See the Light?!. Those saddled with setting the criteria should have weighted each criterion in proportion to the engineering value desired. A vibrant power sector can only be as successful as the experience of the operators. If the winners of the different assets lack demonstrable competence in the management, operation, design, control, protection and maintenance of an electricity network, they will be unable to deliver. Nigeria will thus remain in darkness and the final position will be worse than the first.

 

As we speak, there are still many other things that should be on-going even now that the reform process is underway. There is need to embark on a structured training or development programme for citizens who have the bias in the Electrical Power Engineering field to be saddled in future with the task of managing the Nigerian Electricity Supply Industry (NESI). One suggestion is to sponsor different individuals on research areas (PhD courses) that border on key areas that will have direct bearing on the management of the NESI. These areas include but not limited to Economics of Power System Regulation, Power System Management, Power System Operations and Controls to mention but a few areas. This investment will yield future veritable dividends if and only if candidates are selected on merit. Studies in Electrical Power Systems are for people with very good analytical or mathematical inclination with appropriate level of ingenuity to match. There is no point using the Quota System misnomer in this regard. Let only those that are qualified and are willing to learn attend to this urgent need. When done properly, this will take a few years.

 

One area that is worth mentioning is the overall benefit of learning from the experience and mistakes of those who have embarked on similar privatisation of the ESI for over 20 years now. So many countries like The UK, USA, Canada, and some of Western Europe have gone beyond the initial huddles of running a privatised power sector. A constructive evaluation of their successes and shortcomings will be of great value to developing the Nigerian Power Sector.

 

The electricity supply industry is a technically intensive one. This is one area that the quota system syndrome will not work! You either ask help from those who know how to do it or you forget about uninterrupted power supply. As highlighted, the issues with the Nigerian Electricity Supply Industry (NESI) are huge. Yet, the journey of a thousand miles begin with a mere step! (I must add, in the right direction!)I really hope Lagos can learn from the visiting speakers from Georgia, US and the electricity supply industry (worldwide) who could attend the summit.

One critical area that is often overlooked is the human capital requirement. Without this, every effort will proof to become the square of zero. fortunately for Nigeria, she is endowed with “the most intelligent crop of individuals you will ever meet”. Hence, a carefully planned National strategy to implement the closure of the skill gap in the NESI is urgent. It will not cost so much compared to the obvious cost required to “rebuild” the Nigerian Power System.

 

An urgent requirement is for stakeholders to convoke a meeting of Nigerians working in the electricity supply industries in countries that enjoy uninterrupted or near constant electricity supply (essentially developed countries of US, Canada and Europe). These ones, if they can attend to national call, should form the bedrock of activities that will lead to the successful implementation of the power sector reform.

 

Another area that is important to look at is having a uniform set of standards for the design and quality of equipment to be deployed on the Nigerian Electricity Network. These standards, when stipulated carefully to reflect the overall intention of the EPSR Act of 2005, will prevent selfish individuals or partnerships from ?sweating? the Nigerian Asset and People. Sweating the Asset is a popular consequence of privatization of an electric power network. This is the situation where the investors win the bids, get as much money as they wish from the customers and the network, leave the network in a worse state than they have met it, and exit the business according to the rules of the game. Who loses? The country who owns the electricity network and by direct implication, the poor people suffering to eke out a living. The strategy to be used to prevent this is for the regulator, NERC in this case, to associate the earnings of investors or successful bidders to the verifiable investment in the electricity network. This is known as output measure. Otherwise, we are in for something worse than experienced with the Telecommunication sector. Yes, it was ?Privatised? but with lack of proper regulation and standards, the major players came, did a few years of genuine network infrastructural development in compliance with best practice (Nigerians enjoyed using their mobile phones during these period) and slowly, but surely, lowered the standards to the point that network failure is the tune from Nigerians when we try to use our mobile phones. Those operators in the Telecommunication sector know that their regulator lack technical ability to manage the industry and would not enforce the standards they are required to work to. The same goes with the regulators of the Oil Industry. This is why knowledge is Power! Nigeria needs to celebrate knowledge. ?Return to the era? when education was given proper attention, good teachers were celebrated and students were given quality education. That will be the beginning.

Source?idowu oyebanjo

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.