Eko Disco: Haunted by the Ghost of NEPA

Power

Festus Akanbi, in this report, captures the agony of customers of Eko Distribution Company over the deterioration of the company’s performance, especially in Ikoyi, Victoria Island and other affected areas in Lagos, which some critics describe as a re-enactment of the defunct NEPA’s sloppiness

Two weeks ago, the management of Eko Distribution Company organised a town hall meeting to douse the simmering anger of its teeming customers in the Lagos Island District comprising Ikoyi, Lagos Island and Victoria Island over what has become a culture of shoddy performance.

It was a meeting where the aggrieved customers unleashed their anger over a spate of deteriorating service from the distribution firm as the embattled power distribution company launched into a barrage of excuses for keeping the affected areas in darkness for one week.

THISDAY investigation showed that Lekki and its environs were thrown into darkness for over a week, a development which forced the management of EKDC to organise the town hall meeting. 

Businesses in the affected areas are already complaining over additional costs being expended on alternative sources of energy even as members of the Manufacturers Association of Nigeria (MAN)  are said to have spent N425 billion on other energy sources such as gas, low-pour fuel oil, diesel and petrol between 2017 and 2021. This does not include manufacturers’ expenditure on power coming from electricity distribution companies, popularly known as DisCos. 

According to the data, expenditure on alternative energy sources by MAN members amounted to N117.38 billion in 2017; N93.11 billion in 2018; N61.38 billion in 2019; N81.91 billion in 2020, and N71.22 billion in 2021. 

Meanwhile, at the meeting called by the Eko Distribution Company, customers were said to have complained that the company’s old and overloaded distribution infrastructure was affecting supply in their communities. Many residents from Lagos Island complained about the faults as a result of weak underground cables and overloaded transformers and thus requested solutions from DisCo. 

Although the Managing Director of EKEDC, Dr. Tinuade Sanda, in a message read on her behalf by the Chief Commercial Officer, Mrs Rekhiat Momoh, had attributed the blackout to alleged damage to the cables at some construction sites on Lagos Island, the aggrieved customers wondered why they should take the blame for whatever excuses put forward by the electricity distribution company.

In a similar forum in Ajah and Ibeju, Sanda assured customers that the management was aware of the issues affecting power supply in the areas and has thus organised the platform to address the situation. Most complaints were about the inadequate power supply, while others were about metering, estimated billing, and safety issues within the company’s network.

Observers said the town hall meetings were organised to forestall a full-blown public protest like those of last year where customers challenged EKDC to sit up. 

For over two weeks, houses in Ikoyi South West, particularly those on Raymond Njoku, Awolowo Road and others, were thrown into darkness due to EKDC’s inefficiency. Sometimes, they find it difficult to resolve minor which are cable or transformer-related. Even major problems which are required to be resolved in one or two days, drag on for one week or two weeks, thereby throwing the entire area into darkness and putting extra costs on residents.

Those who spoke to THISDAY off the record said, all the inefficiency associated with NPPA and PHCN is in the hands of EKDC. They wondered why the federal government is not beaming light on the firm.

One of the customers who spoke to the newsmen, Mrs R. Omolara said: “Nigerians are deprived of basic utilities. We can’t use our fridges, fans, and air conditioners and even catch up with the news on television.”

Eko Electricity Distribution Plc currently supplies power to the southern part of Lagos State and the Agbara community in Ogun State. These licensed areas are segmented into 11 districts – Lekki, Ibeju, Islands, Orile, Ijora, Apapa, Mushin, Festac, Ojo, Ajah and Agbara. Receiving between 11 and 15 per cent of the total energy allocation from the national grid, the company procures bulk electricity from Akangba, Ajah and Ikeja West transmission stations. 

Privatisation, a Bungled Process

From all indications, the federal government may have burnt its fingers through the power sector privatisation, especially with the distribution companies’ shoddy performances, a development which is said to be bringing back the memory of the era of the defunct National Electric Power Authority (NEPA).

Today, many critics of privatisation appeared vindicated over the initial fears they expressed over the modalities employed in the privatisation process. According to them, there is no difference in terms of customer satisfaction between the eras when the defunct NEPA ran the show and now when different electric distribution companies manage specific coverage areas.

In March 2005, the Energy Power Sector Reform Act (EPSRA) came into force leading to the cessation of NEPA. Power Generation, Transmission and Distribution which were together under NEPA were separated into different business operations in the sector.

In the distribution line, 11 companies (including Eko Disco) emerged, with licences to distribute electricity to consumers. However, these companies were under the umbrella of the Power Holding Company of Nigeria (PHCN) which was later unbundled in 2013 when power generation and distribution were further privatised giving investors more or total ownership.

Burden of Debt

At least, Abuja, Benin, Ibadan, Kaduna and Kano DisCos have fallen into the hands of the banks they took credit from after they were unable to break even eight years after they were licensed.

While the DisCos are seriously fighting back, accusing the government of re-nationalising power assets, stakeholders are worried over several issues, including if investors would buy the shares seized from the old owners of the DisCos and if the balance of the banks would improve as extant challenges still lay siege to the nation’s electricity sector.

They insisted that government, via the Bureau of Public Enterprise (BPE) and Nigerian Electricity Regulatory Commission (NERC), allegedly has a hand in the failure of the power sector by not “meeting extant guidelines and regulations.”

Association of Nigerian Electricity Distributors (ANED), an umbrella body of the DisCos, in a statement, claimed that the government failed to fulfil a N100 billion subsidy and other privatisation promises made since 2013.

Executive Director, Research and Advocacy, Sunday Oduntan, said the utility companies are deeply concerned about the “restructuring” of the five electricity distribution firms, adding that the move “is inconsistent with all the guidelines and processes necessary to comply with the framework of privatisation agreements and the rule of law.”

According to him, the resultant outcome of the move has been an expropriation or backdoor renationalisation of the DisCos by the federal government.

He added “Such renationalisation or expropriation must be viewed through a historical context as necessary for a proper understanding of the performance challenges that the DisCos have been faced with since privatisation.

“Fundamentally, the basis of privatisation was flawed from the beginning, due to conditions that were not met by the federal government, while expecting the DisCos to meet their performance obligations. Not only were the investors short-changed because of insufficient and unreliable data that was provided by BPE to them during the privatisation process, but the government also committed to and failed to deliver on DisCos’ debt-free financial books, payment of Ministries, Department and Agencies (MDA) electricity debts and N100 billion subsidy.”

Uninspiring Venture

A commentator on energy issues, Mr. Sunday Onyemaechi Eze recalled that the National Union of Electricity Employees (NUEE) vehemently resisted the idea of privatisation to force the government to back out of the plan. 

He lamented that the government had already burnt its fingers by investing humongous sums of money in a private business it has no business rescuing from the onset. According to him, over N300 billion has been injected as an intervention fund for the DisCos while the nation groans in darkness. The worst-case scenario is the inability of the DisCos to service and repair back the loan/intervention facility.

He said, “It was clear from the privatisation processes that the dilemma of the power sector in Nigeria will not abate soon. The laid down rules for choosing competent bidders were grossly abused by those in positions of authority who set the rules themselves.”

In his contribution to the debate on the state of power supply to Nigerians, one energy expert at the University of Lagos, Prof. Yemi Oke was quoted as saying that BPE and NERC should share in the blame for poor the performance of the DisCos.

“There is no doubt that the current privatisation is not working as planned. The government, in my view, should not interfere directly in the takeover of DisCos, if the takeover is a strictly commercial matter. The DisCos and the banks should negotiate for settlement directly, and if settlement breaks down, then the agreed provisions should be enforced,” he said.

On his part, an energy lawyer, Madaki Ameh, was quoted as saying that time had come for the total overhaul of the sector, insisting that the overhaul is long overdue and that the takeover of the DisCos remained legally justified under the terms of the agreement, which brought them into the Nigerian Electricity Supply Industry (NESI).

Currently, the power sector owes banks around N1 trillion, while government interventions in the sector hover around N2.9 trillion. The World Bank and African Development Bank (AfDB) loan to the sector stands at about $3 billion, even as the Federal Government spends about $5 billion on some power generation and transmission projects, including the much-trumpeted Siemens deal, which has remained a mirage going by initial promises.

But will the government fold its arms and allow electricity companies to jeopardise the profitability of business owners and the comfort of residents of these affected areas while the distribution companies continue to run the show? Nigerians are understandably becoming impatient and waiting for regulatory interventions.