Azura agreements and import tariff on meters, By Oduche Azih

What is so novel or complicated about the take or Pay provision in the Power Purchase Agreement between the Federal Government of Nigeria and the promoters of the 459MW Azura Gas Fired Electricity generating power plant? Only those who obviously don’t know how the world works can claim to be confused. But then, what about the battery of energy, financial/accounting and marketing experts, some from within the government, who creamed off some five to eight per cent of the project cost as fees? Did they miss the mark or perhaps deceived the government?

I find it strange that as I manage to receive power for some 12 hours a day, (the Lord be praised!), and still have to make alternative arrangements for the OFF hours, our government, its Ministry of Power, the Nigerian Electricity Regulatory Commission and the electricity distribution companies are embroiled in an interminable dispute with the Azura Power Plant and others over the inability and/or unwillingness to evacuate power from available generation capacity.

It is clear that the members of the National Assembly seeking to rewrite these Power Purchase and Shareholder Agreements are most belated in their response to these matters of major national importance. This is a huge shame considering that many of them have been in parliament for two or more terms. Even if they came in as greenhorns, they have had enough time to get themselves properly educated on what their lawmaking and oversight functions entail. I wouldn’t be surprised if members of the Senate and House Committees on Electrical Power recruited house painters, recharge card sellers and failed restaurateurs as aides. With what moral outrage are they making this current list of demands? After jettisoning these legal agreements and bequeathing Nigeria with another say $5bn judgement debt, what next?

The truth, as I have stressed on previous outings, is that many “elite” pretenders on the government side of the power sector especially in the National Assembly DO NOT ordinarily qualify to be in the room where these matters are discussed let alone be part of the decision-making process. Failing which, we get exactly the results that we are currently living with.

For the avoidance of doubt, the Supply and Purchase Agreements between the West African Gas Pipeline Consortium, a.k.a. WAGPI, on the supply and uptake ends, provide for both Supply Or Pay and Take Or Pay provisions. The certainty makes it possible to keep unit pricing low. However, this aspect demands planning and hard work which is seriously lacking in these parts.

By the way, on the little matter of the import tariff on meters, first, it is instructive that NERC dithered for over 10 years before taking the (YES) unpleasant decision to allow the electricity distribution companies to get the customers to pay for electricity meters. We hated and still hate that decision but it paled to insignificance compared with the years of running battle with the defunct National Electric Power Authority, Power Holding Company of Nigeria and now the “privatised”(?) DISCOs over arbitrary estimated bills. One then wonders at which point the Customs Duty on imported (prepaid) meters, passed on to us consumers, suddenly became the headache of the members of the Senate and House of Representatives to warrant such a major resolution. The importers cannot claim to be unprepared to clear the goods that they imported.

The fate of local meter manufacturers and assemblers is a topic that I have dissected with bitterness on previous occasions. I do not want to annoy myself going over the matter again.

These members, whom I dare not call ladies and gentlemen, are truly idle. They have no sense of duty regarding important matters demanding their attention. I never imagined that I could feel more ashamed now than I felt earlier.

About the Author: Oduche Azih writes from Lagos.

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