Posted by By Roseline Okere on
NIGERIA's worsening power supply crisis is taking a huge toll on the manufacturing sector.....
NIGERIA's worsening power supply crisis is taking a huge toll on the manufacturing sector.
But fresh steps have been taken by the Federal Government to prevent aggravation of the current crisis in the energy sector, by reassuring the workers of Power Holding Company of Nigeria (PHCN) that they will not lose out in the planned privatisation of the organisation.
Investigations from nine sampled companies show that they spend about N69.5 billion on independent power generation, besides the regular bills they pay to the Power Holding Company of Nigeria (PHCN).
For instance, the Managing Director of May and Baker (M&B), Mr Joseph Odumodu, told The Guardian that his company spends N120 million yearly on power generation. His counterpart at Noc-Sino, a shoe and bag manufacturing company, Mr. Jude Onyebu, put his company's expenditure on the same item at N24 million every year.
Also, the British America Tobacco (BAT) spends about N67.5 million on diesel and servicing of its generators in all its factories in Nigeria every year, according to its helmsman, Mr. Richard Hodgson.
Other companies that make huge financial commitments to get energy supply in Lagos include Haffa Industries (N18 million), Dunlop Nigeria Plc, (N96 million) and Nigerite Plc (N36 million).
Others are Friesland Foods Plc (N50 million), Cadbury Nigeria Plc (N49 million) and West Africa Portland Cement (N90 million).
Companies like BAT, Friesland Foods Plc and others are not connected to the PHCN at all. And this huge expenditure on independent power generation is the story of all Nigerians, corporate or individual.
A recent survey of the Manufacturers Association of Nigeria (MAN) revealed that industries in the country experience total outage for 16.48 hours per day.
The survey shows that industries in Edo and Delta states are the worst hit with an average daily power supply of 4.4 hours. The Ikeja Industrial Estate in Lagos has the highest supply of 12.5 hours daily.
A further breakdown of the statistics shows that the industrial estates in Bauchi, Benue and Plateau states followed with an average power supply of 4.5 hours per day.
Lamenting the situation, Hodgson told The Guardian that his company runs solely on two generators at its Ibadan factory.
According to him, the company decided to cut off from the PHCN since its erratic service was affecting its equipment moreso that the BAT could not get uninterrupted power supply for even one hour.
Hodgson called for serious investment in PHCN to make it more useful to the manufacturing companies and the citizens.
Odumodu said that his company has four 500 KVA and one 1000 KVA generators and spends "a fortune" in servicing and operating the generators every month.
More lamentable still is the cost of diesel and servicing of the generators, noting that PHCN has increased its rate charges "more than 10 times" despite its non-performance.
On the way forward, the May & Baker boss urged the government to contract PHCN to foreign partners, noting that industrialists would be willing to pay more to get regular power supply.
The deplorable situation of power supply in the country, especially as it affects the industrial estates, was even made glaring with comparison with the situation in other parts of the world.
The MAN statistics observed power supply reliability in the United States of America, Singapore, France and Nigeria.
The survey was done through four major international indices. The first is System Average Interruption Duration Index (SAIDI), which is the total duration of interruptions of supply that a consumer experiences yearly. For Singapore, the survey says it is about 1.5 minutes, USA (88 minutes) and France (52 minutes).
MAN says PHCN puts the Nigerian figure at not less than 60,000 minutes per annum.
Commenting on the situation, the president of Nigeria British Chamber of Commerce and Industry, Senator Dipo Odujinrin, said the energy problem in Nigeria is a sign of under-development.
According to him, there is no reform of government that will be meaningful without addressing the current power problem in the country.
Noting that power supply is the engine room of every type of business, Odujinrin added that even the 10,000 megawatts promised by the Federal Government in 2007 is just like scratching the problem at the surface.
He put the power requirement of Nigeria at 100,000 megawatts, calling on investors to channel their energies to the independent power projects being advertised by the government.
To the director general of MAN, Mr. Jide Mike, it is a matter of regrets that all forms of industrial production have continued to be jeopardised in Nigeria because of power energy situation.
However, through the Director-General of the Bureau of Public Enterprises (BPE), Mrs. Irene Chigbue, the government pledged to meet all obligations to the workers as agreed with their unions' leadership.
In a letter to both the workers and their unions, Chigbue explained that the BPE in collaboration with the workers' representatives' was in the process of addressing and resolving all pensions related concerns.
Mr. Chigbue Anichere, BPE's Head of Communications, in a statement issued in Abuja yesterday, told the workers that "each of you has a personal stake in the Power Holding Company of Nigeria (PHCN) transition. Importantly, the Bureau of Public Enterprises (BPE) and PHCN management respect your concerns and recognise your needs, and on a continuing basis, will address these directly with you. In time, over the next six months, we hope to introduce regular "chats" so that we can open an official, real time channel with staff and workers. We are working on this now and will have more to say soon."
The PHCN workers had threatened to embark on a strike to prompt the resolution of all labour issues before the company is sold.
The BPE chief enthused that even if it was not always apparent to the casual observer, the news emerging from the power sector was good, both for Nigeria's consumers and PHCN management and workers.
Chigbue said that the changes being introduced in the sector would protect the interests of all, and in time, lead to reliable power supply in Nigeria.
"The changes ahead at PHCN, effective July 1, she said, "reflect a long, sometimes difficult, continuing process of power sector reform. A new national policy led to the passage of the Electric Power Sector Reform Act in 2005, and in turn, to a Nigerian Electricity Regulatory Commission (NERC) and a corporate re-structuring of National Electric Power Authority (NEPA) as the Power Holding Company of Nigeria on July 1, 2005."
She said that the transition involved a legally mandated transfer of assets, liabilities, and employees to PHCN's "unbundled" successor companies effective July 1, 2006, but with the actual transition occurring over an estimated six months period during which time each successor company will gradually assume more autonomy as an independent business unit."
Chigbue pledged that both BPE and PHCN would continue to work together, with the company's unions and with the ministry, to ensure that administrative, organisational, managerial, changes are consistent with the law.
She told the workers that the National Council on Privatisation (NCP) had approved that government assume any PHCN pension liabilities and also that:
BPE, PHCN unions, and pensioners' association will address and resolve all pension related concerns;
PHCN workers who choose to leave voluntarily or who are involuntarily discharged (but not for cause) are guaranteed their severance and benefits packages; and
severance and benefits packages will reflect both skill or professional level and seniority as agreed to by unions' leadership.