A Win-Win Local Content Policy Is Best For The Power Sector – Croucher
In this exclusive interview with the MD/CEO of the Abuja Electricity Distribution Company, AEDC, Mr. Neil F Croucher, he expatiates the need to strike a balance in the Nigerian Local Content Policy as sacrosanct to woo Direct Foreign Investment – FDIs, among other issues needed for a speedy electricity stability in the country. He spoke with SOLA AKINGBOYE in his Abuja office. Excerpts:
Tell us about yourself and your organisation.
My names are Neil Croucher. I am the Managing Director of the Abuja Electricity Distribution Company, as the name imply, we cover four states and it’s a large area of about 133,000 square kilometers, with big cities such as Abuja in the outline areas.
At what level is AEDC implementing the National Local Content provision?
At this stage most of the equipment we purchase is local. In terms of employment, we have less than 8% of expatriates; or about 10 out of over 2000 people that are coming in from outside like myself. The aim is to turn the business around. When I retire a Nigerian can take over. Certainly, one must also be careful about protectionism because it can have adverse effects. So in my view, local content should always be competitive with oversea products. Though local content can help the country rediscover itself, but no nation wants to be seeing as a closed economy. This is because every country also needs foreign direct investments, FDIs. So you need to strike a balance between an open economy where investors feel that they are coming with money and to get something in return. Only, that should not happen at the expense of local development.
What about training and knowledge transfer?
In our own bid we have indicated what our own training programmes would be. Some particular areas are in computerization; we have seen a big gap in computer literacy. We need to introduce management information system. Even basic computer training is very necessary. Also, state-of-the-art maintenance for preventive maintenance is required. For example, we use infrared cameras to detect hotspots on monitoring substations, transmission lines and other electrical equipment. We are conscious of manpower development and technicality of our staff, in order to guard against any catastrophic failure.
Are there unanticipated challenges your company encountered after the acquisition of assets from PHCN?
One of the outstanding features I found on assumption of office is the fact that there were very few management information systems in place, many of which have been reviewed. When we talk about billing system, you can’t make management decisions without proper management information system. When we came in we were able to identify a huge backlog in the area of distribution transformers, about 300 units need replacement as quickly as we can; we have already done about 150. We do also have a capital projects plan that requires capital injection of about $200millionover five years. And it is meant for increasing the capacity of power lines, transformers, new systems, to provide operational vehicles, etc. We have just commissioned 23 vehicles for quick response to customers’ complaints. So, our plans are still intact to turn the business around.
Is government in any way supportive?
Very much so. The privatization of the power sector from my perspective is a fantastic programme. What has given us confidence as investors is the level of commitment on the part of the government. With the level of urgency government is giving to issues regarding electricity supply, and more importantly, the way and manner the regulator is nurturing us in this transition period, we are fully confident that the transformation will be successful.
Do you think NERC has done well to strike a balance between NESI and their customers?
The role of the regulator cannot be over emphasized, even right from the period of BPE involvement in the acquisition process. Though it was a challenging period for us but at the end, we were able to get our heads together. All hands, including the Power Ministry, even the customers, were on deck to see us through where we are today. But the regulator, the NERC is the most crucial among the stakeholders.
On the Multi Year Tariff Order (MYTO), from your experience, how would you juxtapose staggered and the uniformity in the electricity tariff arrangement?
Tariff by nature is a way of charging customers of the electricity consumption, and the amount of investment incurred. This is because it attracts different costs to supply some customers here in the city and others far away. My view is that the cost should be charged according to the cost of distribution. That implies different tariffs for different customers and different terrains. Having said that, what is important for the regulator is to make sure tariff is efficient, and the providers are making the right returns. But if there is any way to create a sustainable sector, the alternative is that you have to rely on external injection of money such as subsidy and the likes. Though that may not be necessary in the Nigerian context, but in the nearest future, the areas I mentioned may be necessary. There is no reason why the electricity sector here in Nigeria should not sustain itself; no need to depend on external funding. We need to become an efficient sector.
How are you handling the menace of vandals at AEDC?
Vandalism is a problem all over the world; it is no different here really. It is more pronounced here due to frustration customers have experienced over the years. But it is very unfortunate when electricity equipment such as conductor is carted away and sold at meager amount, while the cost of repair is much more.
What is the way out?
I think proper policing is what we have to do to secure our equipment properly. More importantly, the best way is for customers to see themselves as our partners to stop vandalisation of electricity equipment. Though it will take a long time to curtail the menace, we need the public’s support in the fight against vandals.
Customer relationship is sacrosanct to this line of business. How is AEDC handling information and public awareness?
One thing we have realized is that the electricity sector has developed over the years, a very real bad image from end users and we need to change this perception. The big challenge is managing the expectations, especially as the sector is now in the hands of private owners. Turning things around cannot happen overnight; it’s a big challenge. The reality is that it will take some time, but I have no doubt that at the AEDC, we are on the right path. A lot of improvement is taking place, though there are shortages in terms of power generation. But it is important for us to convince customers that we are on the right path. We need customers’ support, especially to be our eyes and ears in tackling vandalism, theft of electricity equipment and theft of electricity equipment. We need to engage our customers meaningfully with the help of people like you, the media. Just last week, we had a robust engagement through a presentation with members of the Kogi state House of Assembly in order to allay fears in some quarters that we’re over-billing customers. In fact, at this point, we’re trying to reach out to the Niger and Nassarawa states Houses of Assembly in order to update them on our plans to improve power supply in those states.
Where do they come in?
We are doing this believing that the politicians (House of Assembly members) represent the people. We have also participated in numbers of telephone and radio programmes, including campaigns, public awareness on safety issues, etc. We need customers and the public to be aware of hitches that we cannot fix overnight; to be aware of dangers of stealing electricity equipment that would not only take lives, but also affect highly technical installations that affect operations. There are also sensitization campaign programmes that we have put in place, which starts from Lugbe en-route Jiwa, both in the FCT, scheduled for 16th and 18th of September. In addition to this, we understand that customers usually get frustrated not being able to communicate with us as expected. In that case, we have commissioned a Call Center, which operates 24hours daily with five staff on duty at all times. It is a sophisticated system where customers can call-in from the two lines-08150181818 and 08150191919. Also, there are adequate computer systems, programmed to register all consumers’ complaints whereby we can as a matter of urgency address issues promptly.