Despite the directive by government that prepaid meters should be provided free to consumers, Nigerians recount large-scale extortion and shady deals by officials of the Power Holding Company of Nigeria
There is nothing in his look that suggests he could be involved in the prepaid meters scam. Walking towards a prospective victim, he flashes a disarming smile and politely inquires about the mission of his prey. “How may we be of help to you? I am the personal assistant to the manager and will be willing to assist you,” he explains, while sizing up his prey. For the fellow who introduced himself as Ben, his position as the personal assistant to the manager, Power Holding Company of Nigeria, PHCN, Ojodu Business Unit, CMD Road, Ojodu, Lagos, has been converted to a meal ticket as he fleeces consumers who desire to apply for prepaid meters.
Ben pointedly informs the prospective applicants that all they need to do is pay him N35,000 and within a week or two, they will be provided with a prepaid meter. That is for those who need the single-phase meters. And for those who want the three-phase meters, he demands N65,000. Ben explains that the official amount for the single-phase meter is N25,000, and that the balance of N10,000 is for processing and installation. For the three-phase meters, he puts the official price at N55,000, while N10,000 is for sundry charges. However, he was not specific when asked if the payment would be receipted.
He is not alone in the business of defrauding applicants or electricity consumers. Many PHCN officials at that unit scramble for customers for the same purpose such that traders, especially those selling recharge cards, roast corn and sundry items around the premises serve as agents to some of the officials by calling them out to attend to whoever is there to enquire about how to obtain a prepaid meter.
Investigations reveal that such extortion of consumers is done in virtually all the states in the country, including Abuja, the Federal Capital Territory, FCT, despite government’s directive that prepaid meters should be given to electricity consumers free under the new multi-year tariff order, MYTO-2.
Sam Amadi, chairman, Nigerian Electricity Regulatory Commission, NERC, a statutory agency mandated to regulate and monitor the Nigerian electricity industry, explained recently that provision has been made for free installation of meters in the new electricity tariff, which took effect on June 1, adding that the distribution companies have been provided with funds to ensure that all consumers are connected within 18 months. Patrick Ayenbi, spokesman of NERC, confirmed that “the new tariff regime does not require electricity consumers to pay before a new meter is installed for them. So long you have a meter and you pay your bills, a new meter will be installed for you free of charge,” adding that any demand for payment is illegal “and if we have a concrete case, we shall deal with it decisively.”
But cases of extortion abound everywhere and every day as PHCN officials continue to fleece consumers with impunity.
In Abeokuta, Ogun State, for instance, PHCN officials do not wait for customers to visit their offices; they actually take the meters to them and install only after cash has changed hands. “A month ago, I went to the PHCN office at Akin-Olugbade, Abeokuta, to make enquiry about how to get the new prepaid meter, but the officer I spoke with asked me to go back home after collecting my address. Last week, he came in company of two other officials and they installed the meter, a single-phase unit, after I had parted with N30,000. It was two days later that I heard that the meters are free,” a resident in the state, who spoke on condition of anonymity because he is a civil servant, complained.
In Abuja, PHCN officials go about hawking meters for various sums of money. Many of those they go to are those who had earlier visited their offices to make enquiries about the new prepaid meters, but were asked to write down their addresses for subsequent “follow-up.” The follow-up exercise is the return visit of the PHCN officials to such addresses where they are then told to make payment before the meters are installed. Many residents who have installed prepaid meters said they had to bribe PHCN officials. When the magazine visited the PHCN area office at Kubwa, requesting for a meter, the reporter was told to pay “a token” of N5,000 to the officials who would install it. However, installation process of the meters is still ongoing in the FCT and most residences and offices in the city now have prepaid meters, but in the satellite towns such as Kubwa, Lugbe, Karu and Nyanya, the process is still ongoing and quite a number of houses and offices are yet to get the meters. Joseph Ciroma, coordinator in charge of PHCN prepaid meter distribution in the FCT, revealed that about 43,000 meters had been installed in Karu, Nyanya and its environs, and that they were installed free because the project was sponsored by the World Bank. The free meter distribution was being executed under the National Energy Development Project for the FCT, with a credit facility from the World Bank.
Besides the hassles and extortion associated with obtaining the prepaid meters, consumers complain that the main objective of introducing the meters, which is to ensure correct and uniform billing system, has been defeated through illegal charges. For instance, they are made to pay service charges, maintenance fees, Value Added Tax, VAT, and other sundry charges, alongside the actual consumption. “We were told prepaid meters are pay as you go, just like what obtains in the telecoms industry, but the reverse is the case here. When you buy a particular amount of units, instead of giving you the accurate number you paid for, some monies will be deducted as charges, and so, you begin to wonder what is special about the prepaid meter,” Adebimpe Olaseinde, a secondary school teacher in Lagos, intoned.
The grouse of end users of prepaid meters is that they are charged N20 and N40 per day for residential and commercial usage respectively. Thus a residential user who recharges with N4,000 after 60 days would be expected to pay N1,200. This amount would be deducted from the N4,000. The charges are made compulsory irrespective of whether actual service is provided or not. Many consumers know that power supply is not regular and they could be cut off for several weeks and sometimes months, which is why they describe the daily charges as a rip-off.
Another category of aggrieved consumers are those who paid for prepaid meters a few years back but were told to wait as the meters were not available. Now that they are available, they are being made to make another payment. Emmanuel Akande, a trader at the Ogunpa Market, Ibadan, Oyo State, is one of such persons. Shortly after he moved into his new residence in 2010, he paid N20,000 for a single-phase prepaid meter, but he is yet to get one. The power company has continued to give him estimated bills which he described as exorbitant.
Bimpe Oshiyemi, a teacher in one of the private schools in Ikeja, Lagos, came across a flyer from PHCN, Ikeja distribution zone, in September 2009. The company had assured customers in its zone that it was ready for massive deployment of prepaid meters. Oshiyemi quickly informed her husband, and the duo made plans to install the facility in their home, situated at Ogba, a suburb in Lagos State. The couple paid N18,000 but three years after, the Oshiyemis are yet to get the meter. Iyabo Akinsanya, a business women, had to visit the office of PHCN at Ita Eko, Abeokuta, Ogun State, to enquire about the new directive and she was asked to put down her name and contact address and that those who had paid for the meters first would be given top priority. Akinsanya falls within this category, but she has not been allocated a meter till date. David Adeoye, an architect and zonal superintendent, Foursquare Gospel Church, Orile-Agege, Lagos, would still consider himself lucky. In August 2011, he paid N50,000 for a two-phase prepaid meter but did not get the meters until June 13, 2012, when some PHCN officials hurriedly installed the meters at his premises without any explanation of why the meter did not come early. He has been visiting the Ojodu Business Unit of PHCN to know when his deposit would be refunded since the meters are supposed to be free but for the PHCN officials, mum is the word. “They don’t want to refund our money, and they are not willing to let us convert the money into our energy credit,” Adeoye explained. Many, unlike Adeoye, are in a dilemma because they have made payments in the past but their records could not be traced. A panel of inquiry set up by NERC recently has exposed PHCN of having received payments for meters from customers, which they could not account for.
However, some PHCN officials have maintained that PHCN is not hoarding the prepaid meters and that they are made available to those who apply. Tokunbo Peters, acting principal manager, public affairs, PHCN, said that once a customer presents the old meter, the person immediately gets the new prepaid meter. “We have the new meters in adequate stock, and once an energy consumer approaches us for the meters, we oblige once such persons can provide the old meter. We don’t even ask for receipt, and those who even owe us through failure of payment of bills are not exempted,” he stated.
Although the facility was introduced in 2003, only a fair percentage of Nigerians have been able to obtain them. The meters are in high demand because of their many benefits. One of such is that it can stem the wave of illegal connections and system manipulation by unscrupulous PHCN officials, while energy consumers are guaranteed constant and affordable power supply. Peters explained that since the facility is prepaid, it will reduce the overhead that usually characterise house-to-house recovery of revenues, as well as general staff overheads. He said that the new meter system has some anti-tampering facilities that will largely discourage tampering by customers, adding that cases of theft of meters will reduce because each prepayment meter is tied to a smartcard which will be useless to a thief, and that each meter has a unique identification number that can be tracked electronically.
Government intends to discard the old analogue billing system once the prepaid meters are installed but the full implementation might take longer than envisaged. Amadi disclosed recently that only 35 per cent of Nigerians currently have efficient meter services from PHCN despite the provision of N2.9 billion for meters by government in 2011. He was reacting to the findings of the panel of inquiry on meters. Bamidele Aturu, barrister and human rights activist, who headed the panel, indicted chief executive officers, CEOs, of the various distribution companies of PHCN, of mismanaging the N2.9 billion approved by the federal government as subsidy for the supply and installation of prepaid meters to electricity consumers across Nigeria. The said amount was approved for disbursement under the now rested multi year tariff order-1, MYTO-1. It was revealed that “as against the general information of shortage of meters, the distribution companies actually had meters in stock but failed to supply and install them accordingly.”
Aside from hoarding meters, the CEOs were also accused of being responsible for the inefficiency that permeates the system. For instance, Aturu said in his findings, funds for meters were paid through draft by customers to the CEO and there is no feedback as to whether they get the meter or not and how long the customer is expected to wait before getting a meter. He concluded that sharp practices and inefficiencies are the hallmarks of the prepaid meter system. In addition, he said other problems affecting the company include ageing power plants and terrible transmission lines, as well as rampart corruption and poor collection rates.
Earlier, when the prepaid meters were introduced during Olusegun Obasanjo’s administration, contractors were approached to supply the meters. With the decentralisation of PHCN, each state has the autonomy to choose its own prepaid meter contractor. But sources say the technical competence of some of the companies that got the contracts was in doubt, yet they were imposed on PHCN. A PHCN official told the magazine that the contractors carry on as if they are superior to the PHCN staff because they are closer to those in authority, adding that they supply meters that are substandard. But these complaints, some consumers say, amount to passing the buck and do not justify the blatant rip-off that characterises the distribution and installation of prepaid meters.
Additional report by Tajudeen Suleiman