With the successful handling over of Power Holding Company of Nigeria, PHCN to the new owners, the Chief Executive Officer of MOMAS System Nigeria Limited, Engr. Kola Balogun in this interview with SweetCrude, explained the importance of federal government’s regular intervention to ensure the success of Credited Advanced Payment Metering Implementation (CAPMI) in the power sector.
My background has been engineering and I’m a technologically driven person and I believe in technology, so anything that has to do with the development of technology is what I aspire to drive.
MOMAS has been piloting issue of pre-paid meter since 1995, when the company was established and we have been the pillar supporting the whole idea of pre-paid meters in Nigeria, therefore, we have been following the trend of government developments in this regard. Also we equally try to see that in terms of technological acquisition, outside trading is also achieved.
We have invested so much in research and development to ensure that the ‘Know How’ to develop electricity pre-paid meters and all other aspects of metering can be something we can chew within our premises. Today, I can confirm to you that when it comes to the design of electricity meter, we know so much about it and we are not stopping in the investment of research and development, we will keep investing in it and that is the reason why you now see that the factory is expanding. It is because of our quest, our investment and involvement that we now have the ‘Know How’ on how to design and develop electronics generally.
You cannot rule out electricity meter from electronics, it is purely electronics. So the way we drive it towards pre-paid, that is what makes the difference. The same ideology can be used to do any other electronics part and that is what we are made of. We thank God that the country is recognising us and we have gotten a couple of awards from all various stake holders.
What are the financial commitments in establishing your factory?
The factory was primarily sponsored by the Bank of Industry, BOI with us putting all our sweat and some other investors outside the country who have aided us in ensuring that the dream of building a factory is not in a state of jeopardy. We have invested over N8 billion to ensure that the factory comes to light.
The proceeds of privitisation, has not allowed us to enjoy the full-fledged of setting up the factory but however, it is never too late because, it is just a transition which I know very soon things would take shape because of the new investors who have come in.
We still need government intervention in ensuring that more emphasis is placed on local content. Local content should not be implemented only in the petroleum sector, but, it should be done across board especially now in the electricity industry. Government need to extend the local content legislation to ensure that everything about electricity is one way or the other enjoying local content privileges, because if you look at the power sector today, the business has just began.
Look at the volume of goods and transactions we are going to utilise in terms of distribution material and the commercial material which is the electricity meter, it is huge and for us to develop, somebody else economy with all this huge capital or products which would have been brought into the country and create value in our economy will not speak very well of us.
It is proper at this point in time that we quickly promote the local content act in the power sector, which will cover the manufacturing of all electric components in the power sector, especially the distribution materials. We know that there are generation materials, transmission materials of high-tech level that we might not be able to acquire now, but all distribution material for goodness sake, we can manufacture them here in Nigeria.
There is no big deal about transformers, we already have a lot of cable industry in the country, in terms of electricity meter, for goodness sake we already have an SMT line (Surface Mounting Technology. It is a machine that mounts electric components of any kind. It is a type of technology that mounts electronic component into the board. It is used to produce our mobile phones and decoders) that can produce any kind of design of electricity meter.
When Elswedy was established in Egypt, the Egyptian government stopped importation of all electricity meter into their country and it is the same equipment that we have today. We need a leverage from the government that “Look anything that you produce will not remain in our stock.” We have a lot of meters in our stock today that have not been deployed to the field and meter in itself as an hardware does not generate money until when it is used in the field and it is really telling on us financially and we are appealing to the government to come to our aid to ensure that the new investors patronize us as much as possible, the new owner should come and test our ability to prove that we are capable of doing what they are looking for outside the country.
It is when we are unable to serve them, then they can now look elsewhere, but I can confidently confirm to you that most of what they are looking for outside is right here in their midst and these are my submissions to you.
Now that the power sector has been privatised, how prepared is MOMAS to face the market?
The meters we have in stock now cannot be exhausted in the next three to four months. As a result, our factory has soft pedaled our production capacity, because, we have a lot of stock and if they have not been absorbed into the network. Our production capacity as of today is over 100, 000 meters in a month. We have tendency to produce over three shifts 100, 000 in a month.
Eko Electricity Distribution Company launched their Credited Advanced Payment Metering Implementation (CAPMI) about two to three months ago, and we have not been able to deploy up to 1000 to 2000 meters. So it means that the response rate is low. Most of the consumers too have lost confidence in the past exercise, that means some of them had paid and never got the meter or they got frustrated in the whole process, this allows them to have a doubting mind about the CAPMI scheme.
We need to appraise their mind to prove to them that CAPMI is for real. It is a new intervention for whoever cannot wait for government to meter them to come and pay and get their meter immediately. There are lots of meters in store and I can confirm that to you, meters of different technologies.
Apart from Eko and Ikeja DISCOs, are you in any partnership with other DISCOs outside Lagos?
Yes! We are with Abuja, Kaduna, Enugu and as I’m talking to you, Enugu CAPMI has been launched as well, and we have started meter deployment but, like I said the response is low. We still need to do a lot of education to ensure that electricity consumers’ mind set is changed for good about the sector, this CAPMI is for real, if you pay, the meter would be installed within 45 days or less and if you don’t want estimated bills and you cannot wait for the period in which government will make up their mind to start installing free meters, then you have to pay and your money will be refunded to you with interest over a period of time through your fixed collection charges to be negated from your bill.
How many meters have been deployed since the launch of CAPMI in various DISCOs?
We have deployed almost 2000 meters in Eko DISCO all together, in Abuja we are getting closer to 500 in Kano and Benin we have sent in meters but they have not been deployed into the field. We are still in the process of installation. In Kaduna we have sent in meters for their CAPMI scheme.
The most important thing that I need to lay emphasis on is that the CAPMI scheme is from the regulator which is NERC, but what if the new owners/investors come in and say they don’t believe in the whole exercise of CAPMI while some of us and other players in the industry have exposed ourselves in producing ahead because part of the condition set by the regulator is that we must a minimum stock and the stock is not guarantee. That is some of the flaws in the CAPMI exercise.
The exposure is not guaranteed and when the new owner’s comes in and says they don’t believe the whole CAPMI scheme, what happens to us that have already exposed ourselves in borrowing money to produce meters in large quantity and somebody would come tomorrow and stop it.
The stake holders need to look into it critically and it is a very big issue that needs to be looked into so that it won’t cause policy crisis again because if the new owners come tomorrow and they say stop CAPMI, it will mean that we are inconsistent with our policies
Do you foresee the new owners stopping CAPMI?
You don’t pre-empt anybody. All you have to do is to guide the process, ensure that there are lots of measures that would guide against turbulence, to ensure that this scheme would reign for some time. We would look at it, the errors and implementation.
So if you are going to make any amendment, let the scheme run for some time, let us finish the stock that we have already exposed ourselves to. These are the guidelines that they need to put, these are the shock absorbers that they need to put into the whole execution program, so that somebody will not come tomorrow and say “I don’t want this scheme because I want to import my own meters, I have my own factory somewhere in Asia or Europe.”
There could be a lot of reasons but now we have been exposed to meter stock and they said we should have minimum stock of various type of meters and we have expose ourselves to all that. We have spent a lot of money, these are the things that we need to look into to ensure that we guide the policy. We need to ensure that we don’t allow it to reflect what people will term as inconsistency in our policies formulation.
Are DISCOs doing enough to sensitise consumers about CAPMI scheme?
What they are doing is not enough, we need to have a slot on national television network explaining to the people on the importance of the scheme, we need to do radio jingles, we need to put advert in all the major newspapers and the press need to be highly informed about the scheme to ensure that they promote the ideology and the people will now have more confidence in making prompt payment and they get their meter on time.
It is an aberration for you to be given an estimated bill, it is not proper on both sides, they don’t like it but there is no resources to do otherwise. All the distribution companies are metered too and they need to pay for what they are metered for.
What words do you have for government, DISCOs and electricity consumers?
For electricity consumers we are been deprived steady appropriate bills but the good news is that there is a new dawn, the new era has come. The new investors would take consumers as king, they will be treated as king, we will respect them and we will ensure that they get value for their money.
Even where there is no steady supply, every effort is being put in place by the huge investment in generation and the transmission. They keep improving in the transmission network because as soon as they build enough transmission sub-stations across the country, enough electricity would be delivered to consumer’s respective homes and locations.
So the electricity is on its way, all we have to do is to be a little bit patient because very soon we will enjoy 24 hours electricity power supply as much as possible but that is the domestic need. The industrial need for us to take off is still there so we need more generation but the consumers generally should be having a good day very soon because the meters are available so there will not be any need for you to be given an estimated bill.
Also, the lesson in the prepaid meter is all about discipline because we have the habit of leaving electricity equipment on, we have the habit of putting on our heaters, freezers and other items on hence the pre-paid meter is an avenue for us to have control over the usage. If every one of us is disciplined to switch off our heaters after taking our bath, what is left is taken back to the grid and it will be sufficient for others to use. So these are the things we should take home. That is the message for the consumers.
For the new owners, there is much to do. We need to clean up the network. For us to minimize losses because there is a lot of technical and commercial loses. The commercial loss has to do with by-pass so the method of our installation should be redefined. The issue of multiple cables within a premise needs to be look into. The issues of having lots of unprotected house distribution network need to be looked into, the earthen is very important in order to prevent shock.
Also our insulation material needs to be looked into, transformer upgrade needs to be looked into, we need to do a reappraiser of all our transformers and for us to actually reduce technical loses we need to go into energy auditing by ensuring that all our distribution transformers are metered. With that we will be able to do a thorough loses diagnoses for us to have minimum loses within the entire network.
To the government, they are on the right track but the way forward is to ensure that local content remain and we still need a lot of government intervention from one perspective. They say charity begins at home, therefore all the government owned properties such as military barracks, need to be metered because most of them are not metered today. Is it the private owners that will meter them? Is it not the government that will meter them? We need to lay emphasis on this for the government.
All the ministries, all the government agencies need to be metered ranging from police barracks, army barracks, airforce, immigration, and customs in fact all offices of government need to be metered and that is the best way to actually believe that government is sincere about the whole privatisation exercise.
Government need to equally be intervening on a regular basis as the exercise continues. They should be prepared to intervene in case these people are not able to meet these obligations.
And also the consumers who have paid before the launch of CAPMI and have not gotten their meters, government needs to intervene and come to their aid. So we need government intervention in that regard.
Like I said earlier, local content is the way forward.