The Federal Government’s Plan to supply about five million meters to Nigerian electricity consumers under its Meter Asset Provider (MAP), scheme may have recorded its worst major setback following a recent decision by the Nigerian Customs Service (NCS) to increase duty payable on imported meters from 10 per cent to 45 per cent.
This was even as consumers are becoming rather apathetic towards the metering plan over alleged installation of substandard equipment said to be burning faster than expected raising worries of compromised quality, compared to meters procured under the old Credit Advance Payment for Metering Implementation (CAPMI) scheme.
Some consumers who spoke to Daily Sun, lamented that before now, when N1,000 prepaid electricity card was loaded into the meter, they got 44 units, unlike today when they are made to get less value of as low as 30 to 35 units.
‘‘We are not really getting value with new prepaid meters. The DisCos are surcharging us. I would rather prefer to remain on the old analogue meters than being shortchanged with the new prepaid meters. Our friends on the old prepaid meter are getting value for their money. But what we are getting currently from the DisCos is more of a rip-off,” they lamented
Meanwhile with the 35 per cent hike in custom duty on imported meters, electricity consumers across the 11 Distribution Companies (DisCos) should rather brace up to pay more for meters under the MAP scheme.
MAP is a NERC approved meter vendor whose responsibility is to fund, procure and install meters on behalf of an electricity distribution company. Under its regulation, vendors are also expected to maintain and ensure the integrity of the meters.
But MAP operators in separate interviews with Daily Sun however called on the regulator-Nigerian Electricity Regulatory Commission (NERC) and the Presidency to save the scheme from imminent collapse.
The franchisees lamented that the tariff payable on imported meter hitherto pegged at 10 percent was suddenly raised to 45 per cent shortly after the scheme’s take-off.
They are equally worried that unless the Federal Government intervenes, the MAP scheme might not achieve its set milestones.
Under the MAP scheme, a single phase meter costs N38,850 while a two phase meter goes for N70,350, inclusive of VAT.
But, with the latest development, they say it is no longer feasible to sell the meters at the above rates.
However following the new custom tariff, majority of the MAP providers appear to have abandoned their consignments at the ports, thus incurring huge demurrage over inability to pay the new duty on meters.
This also means that consumers who had paid for meters would now have to wait indefinitely to get supplied due to the observed glitches in the supply chain, contrary
to NERC regulation which provides that prepaid meter suppliers should deliver to consumers after 10 days of payment.
One of the MAP franchisees, Conlog (pty) Limited, in a notice sent to subscribers said: ‘‘This is to confirm that your payment has been received for meters.
We sincerely apologise for delays in installation; this is due to the delay we are also experiencing with the clearing of our imported stock at the Customs Service.
“Be assured that you are in our metering schedule and will be metered soon.’’
When contacted on the reason for the notice sent out to customers, a top official at the company who pleaded not to be named because he was not authorised to speak, attributed it to the 35 per cent rise in custom duty payable on imported meters.
The Conlog official disclosed that the arbitrary and sudden increase in the custom duty from 10 to 45 per cent without stakeholders’ consent created the distortion in MAPs metering agenda having been announced at a time a lot of the consignments were already at the port.
‘‘ So we were then confronted with the challenge of raising an additional 35 per cent difference in what we ought to pay. Remember that this addition was not prepared for. It came as a rude shock,’’ he lamented.
He however said that for Conlog, to meet with customers expectations, it has commenced clearing some of its consignments which would now be moved to the meter testing station before ahead of installation in the weeks ahead.
For his part, a director at Turbo Energy Nigeria Limited, one of the MAP providers accredited by NERC, Mr. Daniel Obemure, admitted that these are indeed difficult times for franchisees as government policy inconsistency appears to have put them in a difficult situation.
He disclosed that their financial projections for the MAP scheme at the time licenses were given by NERC were premised on 10 per cent customs duty, adding it was the projection used in entering agreements with meter manufacturers overseas and local banks financing the project.
‘‘With this unfortunate development, we may be unable to proceed with the metering plan because banks would no longer fund these transactions under the 45 per cent duty arrangement. It is simply not possible because cost of meters have already been fixed by NERC” He said.
The Turbo Energy Limited director urged the Federal Government to order NCS to suspend the new duty structure for a period of six months to one year to enable them return to the drawing board to structure fresh terms with manufacturers and lenders.
He lamented that local meter manufacturers that ought to fill in the gap cannot meet demand, since some of them who are MAP providers are also importing to bridge the supply gap.
On substandard meters, he said, there was no doubt that a few of such could be in the system but that checks put in place by NERC that all meters must be tested at the meter testing station which makes the supply of fake meters impossible.
‘“Consumers alleging there are fake meters could equally be guilty too. Some of them in their bid to bypass the meter and engage in energy theft end up shooting themselves in the leg. I urge those complaining of compromised equipment to carry out further checks on their wiring system,” he advised.
Also speaking, Managing Director, Mojec International Limited, Chantelle Abdul, a local meter manufacturer and MAP investor dismissed the claims that local manufacturers cannot neet demand.
She said majority of MAP providers rely on imported meters because they don’t manufacture same, and have in a bid to make more money resorted to importation rather than patronise local producers.
The Mojec boss said the danger in importation is that foreign reserves would be depleted and the economy of manufacturing countries would improve through massive job creation.
She said her company is not in any way affected by the duty hike because it does not engage in importation as only raw materials are imported.
The meter manufacturer however advised that the current charges for meter as approved by NERC remains unrealistic and could affect quality, especially for those importing.
‘‘For those importing, they may be forced to lower the meter specifications in order to absorb the NERC regulated price.
The lower the quality, the less resistance such meter would be able to withstand environmental pressures. And that is why you see some meters going bad shortly after being purchased.’’
On claims that some meters are substandard because they run faster than they should, Abdul equally dispelled such notion, saying meters should be re-calibrated after some period of being in use.
She said old meters deployed under the CAMPI scheme may not have gone through re-calibration and would be slow in reading to the advantage of the consumer, adding that the same set of meters were programmed under the old tariff structure which makes the units to read slower.
‘‘Anyone comparing the old prepaid meters with the new ones would be making a mistake because the older ones should have been re-calibrated
Commenting on the development, a director at Eko Electricity Distribution Company, Mr. George Etomi, argued that there was no doubt that substandard meters that don’t conform to international standards are in circulation.
‘‘For us in Eko DisCo, we have been working with the MAP providers. But when we see such substandard meters we reject them. In fact, we have been doing that. Some of these meters do not confirm to modern technology.
On the challenges confronting MAP providers, Etomi said the situation remained regrettable and could be attributed to the liquidity challenges in the power sector, which makes many to be chasing the little resources available.
He said as long as government wants to continue to fix prices as against allowing market forces to regulate them while it finds a way to support those that cannot pay, the sector would continue to find itself at crossroads.
He said most banks have suspended credit lifeline to the MAP providers because their books cannot show how they intend to pay back.
On the other hand, he said local manufacturers have not been able to meet demand, coupled with the hike in duty which is now compounding their woes, forcing them to abandon their consignments because for them to pay the new duty rate, it has to reflect in the prices that meters are sold which is already pegged by NERC.
‘‘As it is now, MAP is now on a shaky note except government is ready to provide bridge the shortfall by way of subsidy. But the question I ask is, who are they subsiding because Nigerians on their own generate electricity by paying more for petrol and diesel.