FG Reviews 14-year -old PHCN Meter Contract, Secures Arbitration

Chineme Okafor in Abuja

The federal government has elected to settle out-of-court, a N37billion contract for the supply and installation of about three million electricity meters it signed in 2003, and has also reviewed the contract for an immediate implementation, the Minister of Power, Works, and Housing, Mr. Babatunde Fashola, has said.

Fashola, stated recently in Lagos that an out-of-court settlement had been secured by the government on the contract, which was awarded during the defunct Power Holding Company of Nigeria (PHCN), but was not executed before the power sector privatisation exercise was concluded in 2013.

According to him, a N119 billion court judgement in favour of the plaintiff was awarded against the government on its failures to execute the contract, adding that the government has negotiated the judgment to allow it go back to execute the contract.

“The government of Nigeria had in 2003 (14 years ago) issued a contract for the supply of three million meters to NEPA/PHCN. That contract was not performed until the privatisation was concluded in 2013, and was inherited by the Buhari government as a court case in which a judgment of N119 billion had been signed against government. We have worked to get the case out of court, negotiate the judgement and go back to the N37 billion contract to see how many meters it can now provide, and how to install them. We are still finalising the terms of agreement,” Fashola said.

He said the administration of Dr. Goodluck Jonathan made the mistake of failing to make metering of consumers a compulsory obligation of the 11 electricity distribution companies (Discos) in the power privatisation exercise it concluded in 2013, adding that the development was compounded by inaccurate consumer enumeration in the sector.
“One of the omissions of the privatisation carried out by the last administration was lack of compulsory metering before the privatisation. This is compounded by an inaccurate consumer projection of six million households, without a consumer audit.

These are the problems the Buhari government is now trying to fix with the Power Sector Recovery Programme,” Fashola added.
The minister also said that for Nigerian electricity consumers to enjoy reliable power supply to their homes and offices, they must accept that tariff charged them by their Discos can either go up or down.
He added that consumers should instead of contesting the tariff in courts, demand that meters to observe their consumptions are deployed to their premises by the Discos.
“If we want to experience reliable electricity, we must accept the reality of tariffs and possible upward or downward reviews. We must stop going to court to get injunctions to stop tariff reviews. We don’t do so, when exchange rate, inflation and prices of other commodities change. What we must insist on, is the provision of meters, so that we can monitor and control what we consume,” he added.