One Strike, Numerous Challenges Of Power Sector

Nigeria’s power sector is passing through hard times as evidenced by its seemingly intractable problems. Recently, the workers suspended an industrial action which would have had abysmal effect on the economy. Though many Nigerians hailed the development, the strike however was a drawback on the sector and economy

Penultimate week, the Federal Government averted an industrial action that would have thrown the country into total darkness. Precisely on December 11, the Federal Government stopped the strike, after a meeting with the leadership of the National Union of Electricity Employees (NUEE), in Abuja.

Some of the issues which the government promised to address are compensation of 2,000 workers of the defunct Power Holding Company of Nigeria( PHCN) and recovery of properties of PHCN in the possession of the investors, who bought the assets of PHCN and the payment of severance package for the 50,000 former workers of PHCN, among others.

Based on this, the government was able to persuade the union to suspend its strike that was billed to last 21 days.

Prior to this period, there were undercurrents in the sector as operators made moves to call off the strike before it ground the country to a halt. Relevant parties to the privatisation of the sector, especially the BPE, have discussed extensively with power firms and other stakeholders in the value chain on the need to put the planned strike on hold pending the time the government resolves issues, which are germane to the growth of the sector.

On the long run, the efforts of BPE, House of Representatives and others paid off as the strike was stopped a day after it started.

While this lasted, there is the need to examine the cost and implications of the strike on the sector and the economy.

System collapse

The national grid collapsed less than 24 hours after the strike started. The issue affected supply of power, a development, which resulted in disruption of economic activities in some parts of the country.

This is one of many issues that affected the operation of the Transmission Company of Nigeria (TCN) this year. Not only did the collapse of the grid hinder TCN from evacuating power to the distribution companies, it required a lot of money to restore.

The Managing Director, TCN, Mr Mohammed Usman, reiterated the need to keep the transmission facilities working in order to avert disruption of activities in the country.

An industry official said the issue of managing electricity grid is a critical one as its requires funding and expertise.

The official said the issue of repairing a national grid is as costly as providing a new one, urging TCN to monitor its facilities well.

Effects on infrastructure

The power facilities including offices of the power generation companies (GenCos) and power distribution companies (DisCos) were shut down across the country by the striking electricity workers.

This resulted in power outages in some parts of the country, which meant that the economy would have been grounded to a halt if the strike continued.

The Enugu Electricity Distribution Company (AEDC) spokesman, Mr. Emeka Eze, said the strike partially affected the operation of the sector.

In an interview with The Nation on phone, he said the firm continued to render services to its customers amid fears of disrupting activities in the DisCo by the striking workers.

Eze said: “There was seamless operation at the Enugu DisCo during the strike. However, the strike was nationally coordinated, a development, which suggests that operation of many power firms would be affected if the strike was not suspended.”

Similarly, the spokesman, Ikeja Electric, Mr. Felix Ofulue, said operation of the firm was affected and the issue affected the company’s coverage area. According to him, it was obvious that the strike would have had a debilitating effect on the service of the firm if had lingered.

Manufacturing sector

The sector did not feel the impact of the strike heavily. The reason is because operators in the manufacturing sector have not been regularly accessing power from the grid.

However, operations of some of their facilities were affected by strike, which had undesirable consequence on their output.

Sources at the head office of the Manufacturers Association of Nigeria (MAN) said manufacturers spend billions of naira yearly on importing generators into the country in order to provide alternative power to run their operation.

Efforts to get the President, MAN, Mansur Ahmed, to comment on the impact of the strike on its members, proved abortive, as neither calls nor text messages put across to him was replied.

Improvements

The Chief Executive, Zenera Consulting Limited, Mr Meka Olowola, said the distribution segment of the power sector would experience changes if allowed to be managed by professionals who have demonstrated capacity to navigate issues in the industry.

He said issues in the distribution arm of the energy industry requires technical inputs, adding that only the professionals can provide that skills.

He advised the government to have courage to tackle head-on the issue of tariff, stressing that there are problems in the tariff structure in the power sector.

He said: “Providing appropriate tariff mechanism in Nigeria is a problem. The Nigerian Electricity Regulatory Commission (NERC) is unable to achieve this goal, and the development has caused more problems for the consumers of electricity.

“Once the government is able to resolve that issue, coupled with improvement in the facilities of the power distribution companies (DisCos), the firms would not have problem when it comes to distributing energy to the consumers.”

Government’s promises

The decision by the Speaker, House of Representatives, Honourable Femi Gbajabiamila, to examine the grievances that led to the strike and at the same time ensuring that the House resolves the problems is a good one. However, stakeholders have accused the Federal Government of not keeping to its promises.

Recalling the problems facing the implementation of Petroleum Industry Governance Bill (PIGB), an Energy Economist, Prof Wunmi Iledare, said the passage of PIGB has suffered delay due to inability of the National Assembly to fast-track the process of passing it into law.

Source: The Nation