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Low patronage threatens local meter production

By Emeka Anuforo (Abuja), Roseline Okere (Lagos) and Nnamdi Akpa (Abakaliki)
19 July 2016   |   4:27 am
Manufacturing companies in the country say they are on the verge of losing over N50 billion invested in the production of smart meters due to low patronage by electricity Distribution Companies (DISCOs) and lack of credit from banks.
Acting chairman of NERC, Dr. Anthony Akah

Acting chairman of NERC, Dr. Anthony Akah

• N50b investement hangs in the balance
• ‘DISCOs not under obligation to buy domestic brands’

Manufacturing companies in the country say they are on the verge of losing over N50 billion invested in the production of smart meters due to low patronage by electricity Distribution Companies (DISCOs) and lack of credit from banks.
 
They accuse the DISCOs of unwillingness to phase out estimated billing of electricity consumers.It was learnt that even when the DISCOs have meters in stock, they would delay or decline altogether installation and insist on estimated billing to increase profit.

Findings indicate drastic reduction in the revenue of the DISCOs since they were forced by the Nigerian Electricity Regulatory Authority (NERC) to begin installation of pre-paid meters even as the commission clarified that the DISCOs were not under any obligation to buy meters from local manufacturers.

NERC said it was rather encouraging the distribution companies to patronise local manufacturers, especially where such meters are compatible and conform to their specifications.
 
The Guardian learnt that over N50 billion invested by the local manufacturers to produce meters to meet the demand of one million units of the product by the government may be ruined if urgent steps are not taken to increase patronage.

The immediate past administration had promised to buy one million meters from the indigenous producers to bridge the metering gap in Nigeria. But the Executive Secretary, Electricity Meters Manufacturers Association of Nigeria (EMMAN), Muideen Adebayo, told The Guardian yesterday that government had not been able to fulfill its promise of buying one million meters from the indigenous producers, a situation which, he said, resulted in idle capacity.

Adebayo stated: “The government should liberalise the metering arm of the power sector since there is no enabling law that is against this. The advantage of this laudable step is great. As we speak, the DISCOs have monopoly over metering and they are unwilling to meter their customers due to many reasons. The customers are seriously handicapped because they are not metered but always given estimated billings and unfortunately they cannot buy meters from the manufacturers directly. The government should, as a matter of utmost urgency, liberalise the sector as it was done in telecommunication.”

He canvassed embargo on the importation of meters in order to encourage the local manufacturers.Already, importation of meters has led to loss of jobs in the sector and many manufacturers are not willing to employ more staff as they are operating below their installed capacity. He described the DISCOs patronage of the foreign meter producers at the expense of the local manufacturers as a dis-service to Nigeria. “This is because it presupposes that the Discos develop other countries at the expense of our dear nation. This attitude has a lot of negative effects on Nigeria,” Adebayo said.

Acting chairman of NERC, Dr. Anthony Akah, explained that the commission had engaged many of the local manufacturers as contractors under NERC’s Credited Advance Payment for Metering Initiative (CAPMI) in which customers pay for meters.

“Essentially, we want to encourage locally manufactured or locally assembled meters or electrical equipment. On our part, we have encouraged them and engaged some of them as contractors under the CAPMI. For meter procurement controlled by DISCOs, we have asked them to patronise the producers once they are compatible with our metering code and standards.

“It is a gradual policy implementation. Because of the gaps, the DISCOs are exploring all options. We have not outlawed the importation of meters but we encourage them to patronise the local manufacturers. It is a private market driven industry.”
 
Also speaking with The Guardian on the issue, the Chairman and Chief Executive Officer of Mommas Engineering Meters Manufacturing Company Limited (MEMMCOL), Dr. Kolawole Balogun, explained that the decision to dump local manufacturers was because foreign manufacturers could not grant credit facility to the DISCO.

Balogun said that MEMMBO had the capacity to produce 250,000 smart meters per month but had only been able to produce less than 5,000 meters due to low patronage. He added that indigenous meter manufacturers are not giving credit facilities to DISCOs as a result of the hostile Nigerian business environment.
 
Meanwhile, a group called Save Ebonyi Project (SEP) has urged residents of Ebonyi State to stop paying for electricity to Enugu Electricity Distribution Company (EEDC) until they start enjoying “commensurate power supply from the company.”

Speaking to journalists in Abakaliki, the founder of the group and social crusader, Mr. Godwin Ukwu, noted that all over the world, there is no business that consistently received payment for services not rendered or goods never supplied just as there is no known law backing EEDC to be collecting payment for services not rendered.

2 Comments

  • Author’s gravatar

    So there are a lot of pre-paid meters lying idle? Why am I not surprised? NEPA, no matter the name they are given, will always be NEPA. They are forever determined to fleece Nigerians to the bones. The FG should please force their hands to buy off the cache of meters and install them for customers to enjoy better services. Greedy DISCOs.

  • Author’s gravatar

    This situation is due to failed leadership. yes the government should not ban imported meters, however they can make imported meter so expensive that local meter would be much better. The government can also mandate disco to meter it consumer and to use local meter, they have the power of sanction and funding to hold over the power sector. estimate billing is pure looting and corruption, and for a government looking to end corruption, this should have being the very first things they ended.