LOCAL electricity meter manufacturing and assembling firms could face economic distress in the days ahead as the Federal government has opened a bid for a $155 million World Bank loan to import meters.
The Association of Meter Manufacturers and Assemblers of Nigeria (AMMON), worried the move could cripple the $500 million investment in the industry, has petitioned the Bureau of Public Procurement (BPP).[READ FULL ARTICLE]
AMMON, in a petition signed by its acting president, Ademola Agoro, and the secretary, Durosola Omogbenigun, urged the Bureau and the government to save the local meter manufacturing business from total collapse, as well as save jobs.
In the petition, obtained by The ICIR, AMMON stated, “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 the Phase One of the programme already awarded to some of our members since November 2022 by the Transmission Company of Nigeria (TCN), a bid process that the BPP approved.
“You may note that the TCN recently advertised a World Bank funded bid process for the supply of 1.2 million smart meters to DisCos in Nigeria. 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 not made 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.”
While lauding the “good” intentions of the TCN and the Nigerian Electricity Regulatory Commission (NERC) to achieve mass metering for Nigerians and bridge the gap in the sector towards solving the nation’s electricity problems, AMMON stated that such intentions should consider the country’s economic state, which it reminded does not support the importation of fully-manufactured products.
Illustrative picture of Nigeria’s current metering status
AMMON expressed worry that the proposed bid process would lead to a disastrous outcome for local meter manufacturing/assembling companies it stated had invested over $500 million in the industry.
It compared the industry, which it estimated as employing over 10,000 Nigerians in direct employment and more than 30,000 Nigerians in indirect labour, with competitive wages, to the communications sector.
The group urged the Federal government to direct the immediate suspension of the TCN bid process pending proper consultation with stakeholders in the power sector, especially meter manufacturers, to address members’ concerns.
It also enjoined the Bureau For Public Procurement (BPP) to direct the TCN, NERC and Central Bank of Nigeria (CBN) to honour the contract for the supply of four million meters awarded to local meter manufacturers in Phase 1 of the Mass Metering Programme.
According to a NERC report, the huge metering gap for end-use customers is still a key challenge in the industry. It is estimated that of the 12,542,581 registered energy customers as at March 2022, only 4,740,114 (37.79 per cent) had been metered.
Reacting to the development, a power sector governance expert, Chuks Nwani, told The ICIR that the government should close the metering gap with a multifaceted approach.
Nwani suggested that since the metering gap keeps widening by the day, indigenous manufacturers and meter importers should synergise to close the gap.
“No one group can close the metering gap. Metering is a major issue that affects the liquidity of the power sector. All hands must be on deck. Local manufacturers may not have the capacity to close the gap, so why shut out importation if Nigerians can access meter and not be exploited by estimated billing?” he asked.
A former NERC commissioner in charge of engineering performance and monitoring, Frank Okafor, also told The ICIR that with the Electricity Act, states can get more involved in metering to be able to close the gap.[READ FULL ARTICLE]
“This is a great opportunity for the states. Lagos and others are already showing capacity in various areas since the Electricity Act was signed. Other states can also look at opportunities in closing the metering gap,” Okafor said.