#minimumfunding

  What little attention has been paid to the transmission grid, Step 4, has been haphazard, badly managed and sometimes hindered by suboptimal political decisions, particularly regarding the timing, funding, direction and location of transmission lines and transmission substations. The distribution sector too, Step 5, that is meant to be the customer-facing sector, and ensure prompt, quality service has seen inconsistent and hopelessly inadequate investment for as long as anyone can remember. In the recently ended NEPA/PHCN era, the mantra for management and staff of every electricity company was “minimum funding”. This meant pay only salaries, do some essential work and forget customer care and everything else. Somehow, though, they always managed to find money each year for spanking new Corollas, Camrys, Prados and Land Cruisers for the bosses. All other investment money came from “intervention funds” or “special funds” or “subsidy”.

The consequence was that electricity companies could never plan and whenever money did come, it would be used to pay for the most urgent repairs and recurrent bills (a favourite being “medical expenses”). The problem at Federal level was compounded by those States whose Governors, rather than properly appreciate the nature of the problem, insisted on building electricity generating stations entirely with public funds. None of them realised that in order to deliver public value, they also had to assure gas supply, build transmission lines and refurbish the distribution network across their States. They failed to see that no State Government in Nigeria owns or has access to gas production or supply, the transmission grid or the distribution network in its State. Indeed, a certain State in the South-South spent so much money building over 400MW of generation capacity, far more than any other except the FG, all to no avail. It is in these States that the cautionary tale of “generator no be light” is most painfully but graphically illustrated.

With hindsight, it speaks a lot about the quality of governance in Nigeria (or lack of it) that these States embarked on these projects, in some cases, AFTER the establishment of the Nigerian Electricity Regulatory Commission (NERC), but did not bother to inquire about what they could properly do and how best they could go about it. They now know that, however rich they think they are, none is rich enough, nor possessed of the project management capacity to focus both on dealing with the urgent need to provide basic amenities of life to its citizens, simultaneously manage the complexities of investing in all the six processes listed above and then run the electricity systems themselves. Even with the need to improve standards of living, States’ foray into the generation business has generally been a horribly spectacular illustration of “money miss road”.

This also explains the dilemma of the now over seven years old Nigeria Integrated Power Programme (NIPP) - an extremely ambitious multi-sector engineering programme to develop the fuel supply, generation, transmission and distribution infrastructure to deliver energy to our homes from 9 power plants located in the Niger Delta and 1 in Kogi State, a total of just under 4800MW. NIPP must rank as one of the largest, most extensive integrated infrastructure programmes ever undertaken globally, and in pretty inhospitable terrain too. However, the measure of its success lies in the fact that each of these power plants is now being privatised, most before their full commissioning.

The question is still very much open on whether embarking on NIPP in 2006, after assenting to legislation in 2005 saying it would privatise all its electricity assets, rather than single-minded focus on implementing reform (as we have seen since 2010), has been the best use of Executive Authority and the common wealth of Nigeria. The question is even more poignant when we consider that 7 years later, much less than 50% of NIPP’s total generating capacity is actually delivering energy to citizens. Politically, however, I would say that NIPP has been a resounding success; but then, at what cost? The verdict is becoming more apparent but it would be interesting to hear your opinion on this and on the news that NIPP’s next venture is to use funds from its ongoing privatisation to build hydro power plants in Northern Nigeria.

“Generator no be light” is a cautionary tale in four parts. The bottom line is that building and commissioning a power plant, however big, however expensive, after much huffing, puffing and heavy spending, is just one in a 6-step process that must all come together in a well-managed programme before we see steady “light” in our homes. The efficient management of the complex financial, commercial, engineering and customer-service activities that deliver the simple result of seeing light at the flick of a switch all over Nigeria; and breaking the invidious dichotomy between “urban” and “rural” Nigeria is our millennial challenge. Deliver to every nook and cranny of Nigeria the light that electricity brings and true socio-economic development shall follow.

With NIPP Part 2 warming up and raring to go, even as the FG has barely finished selling its legacy PHCN electricity assets, the question looms: Is this challenge most effectively dealt with by the model of Government’s intervention in everything from policy to regulation through to construction and operations? Or is it better for Government to work with the private sector in a more collaborative model that enables each to do that which it is best equipped to do? Again, we wait eagerly and expectantly for an answer…but there is no time to waste.