Manufacturers Oppose World Bank-funded Bid for Supply of Smart Electricity Meters

*Say foreign firms being favoured in the bid process

*Insist on execution of supply contract awarded to members 

Peter Uzoho

Meter producers under the aegis of the Association of Meter Manufacturers of Nigeria (AMMN) have kicked against the World Bank-funded bid process for the supply and installation of 1.2 million smart electricity meters to the 11 distribution companies (Discos) under Phase 2 of the National Mass Metering Programme (NMMP).
The association in a letter addressed to the Director General of the Bureau of Public Procurement (BPP), dated July 4, 2023, called for the immediate suspension of the World Bank-funded bid process.

In the letter, which was jointly signed by the Acting President of the manufacturers’ association, Ademola Agoro, and the Secretary, Duro Omogbenigun, the association urged the BPP DG to direct the Transmission Company of Nigeria (TCN), Nigerian Electricity Regulatory Commission (NERC) and the Central Bank of Nigeria (CBN) to honour the pending four million meters supply contract awarded to its members since November 2022 under the Phase 1 of the NMMP.

The association argued that the World Bank-funded bid process, which was recently advertised by the TCN, only favoured foreign firms with no track of their investment in the country and was against the backward integration policy of the federal government.
It warned that the: “Tender, which closes on July 11, 2023, if left to continue, would amount to a constructive breach of the award of contract(s) for the supply of four million meters under Phase One of the programme already awarded to some of its members since November 2022 by TCN, a bid process that your office approved”, the association said.

The letter further reads: “That your office be aware that this particular bid process is being opened to foreign companies (manufacturers, suppliers, and exporters) of fully-built electricity meters with planned Custom Duty waiver granted to them to import meters into Nigeria.

 “These importers, who are primarily foreigners, have yet to make a verifiable investment in the backward integration programme of the federal government, nor have they made any investment in local manufacturing and assembling of meters in Nigeria, which has always been the standard requirements for Meter Assets Providers (MAP) in Nigeria to show proof of investments in the backward integration and must have Meter Assembling/Manufacturing Plants and factories in Nigeria.  

“You may further be reminded that TCN and NERC, under Phase 1 of the Mass Metering Project of the Federal Government, a bidding process that your office supervised and gave a “Letter of No Objection to”, awarded 4 million meters to the local meter manufacturers in 2022.”
As a result of backward integration, the body said its members had scaled up their production capacities by obtaining facilities from the banks to meet the supplies of these meters to the distribution companies.

It added that they had readied to supply these meters before the government abandoned the awards already made to its members and went ahead to advertise the World Bank-funded international procurement for 1.2 million meters under Phase 2, which the requirements, the association said were majorly in favour of foreign companies.  

Specifically, the meter manufacturers urged the BPP and the federal government to save the local metering sector from total collapse and save the investments and jobs of Nigerians.
 As part of their prayers, the association called on the BPP DG to direct the immediate suspension of the TCN bid process for Phase 2, pending proper consultation of the stakeholders in the power sector, especially the meter manufacturers.

It said such action would help to address its members’ concerns regarding the pendency of Phase 1 of the NMMP and the award of the contracts for the supply of four million meters already awarded to their members since November 2022, which had not been funded till date.
They also pleaded with the BPP boss to direct the TCN, NERC, and CBN to honour the award of contracts for the supply of four million meters as awarded to the local meter manufacturers in Phase 1 of the NMMP.
The association further requested the BPP CEO to “Direct consultation among local stakeholders during the suspension of Phase 2, to create viable options and strategies to restructure the evaluation criteria and guidelines of Phase 2 World Bank Bid to prioritise local meter manufacturers, thereby align Phase 2 with the Local Content Policy and Backward Integration Programme laws of the Federal Republic of Nigeria to catalyse economic growth and development.
“We pray and hope for your urgent intervention to address this issue”.
While appreciating the good intentions of TCN and NERC to achieve the mass metering of Nigerians and bridge the metering gap in the sector towards solving the nation’s electricity problems, the association also stated that such good intentions should be executed while taking into consideration the sanctity of contracts.
It noted that such good intentions by the TCN and NERC should reflect the present economic state of Nigeria where the nation imports fully-manufactured products but make policies that encourage building local production capacity to create employment for the teeming youthful population.  
The association, however, warned that the proposed World Bank-funded bid process would lead to a disastrous outcome for its members as well as local meter manufacturing and assembling companies in Nigeria, who have invested over $500 million in the industry.
It added that the bid process would also cause massive job losses in the industry that currently employs over 10,000 Nigerians in direct employment and more than 30,000 Nigerians in indirect labour with competitive wages comparable to the communications sector.    
“Our members have invested considerable resources in the metering sector with capacities to improve if only Government could sustain its present policy of allowing only genuine local meter manufacturers and assemblers to continue to supply meters to the Discos without skewed tender processes like the proposed World Bank Bid that seems to shut out local manufacturers from even participating in the process,” the association added.  
The association insisted that any attempt by the government to jettison the laudable policy of growing and buying made-in-Nigeria products at the expense of encouraging mass importation of products, including meters into Nigeria under any guise without comprehensive consultations with the stakeholders in the sector would only wipe out the investments of the investors in the industry.