LONGER IN THE DARK

DA DA IDO

DITV/ALHERI RADIO, KADUNA

NEWS ANALYSIS/COMMENTARY

17^TH November, 2011

LONGER IN THE DARK

          Workers of the Power Holding Company of Nigeria on Tuesday 15^th of November shut down power supply to most parts of the country, and have vowed not to restore it until a number of demands are met. One demand is that all outstanding labour issues, including unpaid dues, must be paid by the government. Another is that military personnel at the Company’s facilities should be withdrawn. A third is for wage increase. All three demands are bits and pieces of the main grievance of the workers, which is that the federal government plans to push ahead and conclude the planned privatisation of the company. The nation is likely to stay in the dark a bit longer than it is used to, as government and the workers haggle over these issues. Most Nigerians will not notice the shutdown because they have been effectively shut out of the services of the Power Holding Company for a long time, or because they only receive it on rare occasions.

          The dispute over the privatisation of the power sector is likely to assume the same character as the controversy over the planned removal of subsidy from petroleum products, because the issues are important to the livelihood of Nigerians, and the nation’s economy. On both issues, government is not engaging the major stakeholders, which is the public, in a debate or discussion on merits of the reforms. The complex, and long drawn-out debates over the need to privatize key elements of power generation and distribution has been limited to the sector’s unions and the government. Both sides have stuck to their positions while the billions being invested to improve the electricity energy source in the country show no result. Perhaps now that the unions are digging in for a long fight, and government appears to be on the verge of involving substantial Private capital participation in the sector, Nigerians may be informed over what the issues at stake are.

          At this stage, the bone of contention appears to be the determination of the federal government to privatise power distribution. The unions say where private sector funding and managerial capacities are needed is in the area of power generation. They argue that privatisation of distribution will affect their jobs and add little to the capacities available to the nation. Private companies will simply buy the little power being generated and sell it at great cost to Nigerians. There will be little difference between that and what the PHCN workers are doing.

          Government’s position is that private sector’s involvement will improve efficiency in distribution and reduce corruption and waste which exists around the present system. Government will argue that when all the investments made in the past into improving generation come on-stream, the private sector will distribute it better and more efficiently, even if at higher cost. Private sector will also be expected to improve distribution infrastructure, and streamline consumer services to make them more responsive to market forces. Competition between private sector distributors, and, in the longer term, generators, will give Nigerian consumers choices and value.

          The labour unions do not trust government to push private sector funding into power generation in the near future. They suspect that there are plans to hand over strategic national assets in power distribution infrastructure to private sector investors, which are soft options. They suspect that many of the private sector companies eyeing the power sector will undertake massive changes which will threaten most of their jobs. They want private sector remuneration now, as insurance that they will not be thrown out by the new investors, or short-changed by them. If they have their way, the power sector unions will block any privatisation of the distribution sector until private capital has become heavily involved in generation.

          This dispute over the possible role of private interest in the power sector will complicate the federal government’s campaign to remove subsidy from petroleum products. Already Nigerians are paying higher charges for electricity, and they have learnt to live with a billing system which is neither rational nor fair. Government says rates will go up again next year, and part of the reason may be to make the sector more attractive to particularly foreign investors. Public outcry is likely to be louder when people continue to pay more for alternative sources of energy from a market where monopolies rule, such as diesel and kerosene.

          The public is helpless to stop workers of the PHCN walking off whenever they have a grievance. If the labour laws have any meaning in the country, the public will be spared the pairs of these skirmishes around an important issue. The laws relating to disputes and their resolutions will apply, and government and the unions will negotiate a resolution. As it stands, the workers are not even technically on strike, yet half the nation is blacked out. Tomorrow, the other half could be in the dark. And nothing will happen.

          The federal government needs to come clean and explain to Nigerians what its plans are for the power sector. If it intends to introduce far-reaching reforms, it should explain what they involve and their implications for consumers. It will have a difficult task explaining why the huge investments in the power generation sector have not radically improved the quantum of power available to the nation. It will also need good reasons to explain why investors want to get involved in distribution at this stage, and not generation. The unions, on the other hand, also need to know how low they rank in the perception of Nigerians. Very few Nigerians will have any sympathy or goodwill for the PHCN staff. If they have issues which go beyond their pockets, and which have major implication for the nation’s economy, they need to put them forward in ways that do not just keep Nigerians more in the dark. Because at this stage, most Nigerians are really in the dark over what this quarrel is about.