Last week’s standoff between the electricity distribution companies and the Organised Labour over tariff hike has, in a manner of speaking, exhumed a corpse which both parties have suffered the illusion of laying to rest but which in fact remains ‘live’. One here talks of the farce that the post-Power Sector Reform Act 2005 has ushered in – a sector that is liberalised only in name. We may have come a long way from when the debate on the provision of the public was split along ideological lines; what we could not have bargained for is the motley assembly of anaemic rent collectors described as Discos under a so-called market environment.
Eleven years after the institutional framework designed to usher in the regime of liberalisation is said to have kicked in, our old nightmare may have changed hands, the problems that dogged theancien regime have magnified in geometric proportions – far beyond our wildest imagination. Some two and half years after the handover of the assets to the 14 privately-owned successor-companies of the Power Holdings Company of Nigeria (PHCN), it is increasingly clear that the sector, in the hands of the new owners, is headed nowhere.
I have taken time to peruse the issues at the heart of the current dispute. I must confess that it was, initially, somewhat tempting to dismiss this latest agitation by labour as just of those things. To start with, I understand that labour, like any body of consumers would loathe any idea of a tariff hike no matter how justifiable. But even much more than that is my growing frustration with the group over what I consider as its fixations with old ways and means in a vastly changing world! I cite a ready example in the oil subsidy debate over which labour was needlessly obdurate even when it was so apparent that the subsidy burden had become an albatross too heavy a burden for the treasury to continue to bear. I have never seen a more destructive fixation than that! One can therefore understand the basis of my initial irritation.
This time around however, things are different. Labour is right. It’s time for the Discos – or whatever they are called – to sweat for their money. At this time, no one denies that the issue of tariff review has been on the table for so long; indeed, it is one of the key pillars of the power sector reform. Moreover, that is not what labour’s agitation is about.
I must concede that the NLC President, Comrade Ayuba Wabba did a fantastic job of distilling the issues in his joint statement with his Trade Union Congress counterpart on their plan to picket the Discos last week. Among the many factors cited were: an alleged non-compliance with section 76 of the Power Sector Reform Act 2005 in effecting the increase; the lack of appreciable improvement in service delivery compounded by the non-compliance with the signed privatization Memorandum of Understanding (MOU) of November 1, 2013, which stipulates that within 18 months gestation period, all consumers are to be metered. There was also reference to an alleged disobedience of a subsisting Court Order by Justice Mohammed Idris of the Federal High Court, Ikoyi, Lagos, dated May 28, 2015, prohibiting further increment until the determination of the substantive suit; and finally, that the timing of the increase aside negating the current economic realities would further impoverish Nigerians.
Without question, the issues, as outlined by the labour leaders, aptly capture what has now become the unending regime of frustrations of the electricity consumer in the hands of the operators. Today, steady electricity remains a rarity. While it is bad enough that the massive investments promised by the new entities have failed materialise, or worse still, unimaginable that the sector is still looking up to the federal government to bail it out, it is outrageous to imagine a technology-driven sector like power insisting on doing things by the rule of the thumb in 2016! That, to me is the crux of the matter.
Again, labour is a pain in the ass. Now, I am not even certain that I would endorse its methods 100 percent! But that is not the issue. What is at issue is a service provider insisting on reaping before turning the soil around! And now labour says NO! As far as winning the argument goes, I’ll give the moral advantage to our men on the agitation front as theirs has become a public duty imposed by the exigencies of the time in the event of the failure of the regulatory agencies to act in their defence.
Where do we go from here? Honestly, it is difficult to answer. As flawed as the process of privatisation has turned out to be, going back on the process will certainly prove difficult if not impossible. Truth is – the feud over tariff obviously masks a more fundamental problem; it is in fact symptomatic of a deeper problem – which is the absence of capacity, both technical and managerial, by the current crop of players. As it appears, we are stuck in the middle of a deep sea with no rescue in sight!
I guess the least we can do at this time is getting the different companies to live up to the obligations spelt out in their MOUs with the understanding that failure comes with hefty sanctions. Such options as possible force sale should not be ruled out. That should not prove difficult for the government.
Finally, the federal government may want to sit back and ask itself if the business of liberalisation stops at parcelling out the power firms as against attracting the huge funds it claimed it could not afford into the sector. How about committing the investors into a clear roadmap with timelines? Why would the power companies insist on sucking the juice and asking the consumer to feed on the roughage? Is that what their liberalisation teach?
NATION
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