Progress on Power Privatisation-Repeat

*Note* This article was first published on October 24, 2012 and is repeated due to current unfortunate developments as anti-reform elements seek to undermine power sector privatisation by cancelling the Manitoba Transmission Concession. It would be a monumental tragedy if President Jonathan allows the unravelling of electricity sector transformation. (*Happily this appears to have been overtaken by events as the President has decided to affirm the Manitoba contract) President Jonathan moves closer by the week to probably his greatest legacy as Nigeria’s elected leader – completing the privatisation of the power sector. Fate perhaps has destined that it was Jonathan’s lot to transform power sector dynamics in Nigeria, as the template for what he is now executing had really been put in place in 2000/2001 at the Bureau of Public Enterprises (BPE) when the Power Policy was written. It was the same period that a Telecommunications Policy was also designed at the Bureau, except that the telecommunications one became law two years later in 2003 in form of the National Communications Commission Act. Indeed, even before the legislation was passed, the policy had been meticulously implemented starting with the 2001 digital mobile licence auctions which kicked off the transformation of the telecommunications sector in Nigeria. The power sector was, however, a totally different kettle of fish. First of all, the policy was half-heartedly implemented even by those who should have been its advocates and custodians. Indeed, the executive and legislature appeared to have entered into a conspiracy against the Nigerian people as they kept the draft bill to provide legal basis for policy implementation in the shelves of the National Assembly from 2001 till 2005 when the Electric Power Sector Reform Act (EPSRA) was eventually, and apparently reluctantly, passed. When EPSRA became law, I rejoiced hoping that perhaps the sector bureaucracy and the relevant political elite were now ready to relax their grip on the sector, but as usual, we underestimated the Nigerian capacity for self-destruction. Instead of proceeding with swift implementation of the new framework encapsulated in the new law, the then administration made a 180-degree about-turn with a new National Integrated Power Project (NIPP) which has turned out to be one of the most notable policy scandals in the Nigerian nation. NIPP was philosophically the direct opposite of the framework envisaged in EPSRA, which sought a private sector-controlled power sector, with generation and distribution sold to private investors, while transmission, which was a natural monopoly, concessioned to private managers. The law also provided for an independent regulator, the National Electricity Regulatory Commission (NERC), and unbundling of PHCN into multiple distribution and generation entities. NIPP, on the other hand, was sold (probably by enemies of the impending reform and bureaucrats and politicians who wished to award contracts!) to the government as an emergency intervention by government, which was required to invest in emergency power. Unfortunately, anyway, by the time EPSRA was enacted, the government of the day had embarked on a major national distraction called “third term”, and probably the NIPP could play some role in oiling the wheels of the third term project! It was only after the failure of the third term project that government sought a rushed completion of the privatisation and concessioning of the PHCN entities, a process that could not be concluded until late President Umaru Yar’Adua took office and (illegally) suspended EPSRA implementation. Yar’Adua and his chief adviser on energy, Rilwanu Lukman, were completely opposed to the notion of privatisation of the power sector, most probably in defence of perceived, but in my view misguided, regional interests. Even though EPSRA, a law enacted by the National Assembly and assented to by ex-President Obasanjo, remained the law of the land, Yar’Adua and Lukman disavowed it, and Lukman came up with a bogus and unrealistic alternative based on continued government control which required the public sector to invest $85 billion into the power sector. No lessons were learnt from the failures of the NIPP scheme, even as it appeared that the Yar’Adua regime actually partly orchestrated its failure by first stalling it and then deliberately misinforming the public about the amount spent. Given this tortuous background of power sector reforms since the 1999 return to civilian rule, President Jonathan deserves commendation for seeing through the subterfuges and re-instating the process of sector reform based on the framework envisaged in EPSRA. That was what the president’s Power Sector Roadmap purposed to do and, as the countdown to the end of the process looms, appears set to accomplish. Credit must also go to the former power minister, Bartholomew Nnaji, who fought tooth and nail to escape all the traps laid out by highly-placed anti-reform elements, though he was eventually consumed. We eagerly await the operational takeover of the transmission company to Manitoba of Canada who won its management contract; conclusion and handover of the privatised power generating entities; and conclusion of the process in relation to the distribution companies as well. But no one should take those who oppose power sector privatisation for granted. For them, it is not over until it is over, and they will continue to mount rearguard actions against its successful conclusion to the very end. President Jonathan and the folks at BPE and the National Council on Privatisation (NCP) must be vigilant and must sustain the admirable political will demonstrated so far in the sector.

The "Okada" Society (2)

An opponent of the Lagos State government’s restriction on “Okada” operations, in trying to convince me to reverse my support for the measure, mentioned that several countries allow commercial motorcycles to operate – Benin Republic, Rwanda, Uganda and Cameroun. He also speculated that some unspecified nations in Latin America and South-East Asia also use motorcycles for public transportation. These countries, you will observe, are exclusively from the most backward and poorest regions of the world. My response should be predictable to any regular reader of this column – those are not the type of nations Lagos State should be benchmarking! The vision the government in Lagos articulated at some of the Lagos Economic Summits I’ve attended (Ehingbeti) is to build Lagos into Africa’s model megacity comparable with the best in the world! One of my biggest concerns about the socio-economic implications of “the Okada society” for our people is the impact on distribution of skills and competences. Ask yourself the question – if we didn’t have “Okadas”, what jobs would the typical indigenous Nigerian commercial motorcyclist be doing? These would be the profile of persons who would be auto mechanics, plumbers, electrical technicians, vulcanisers, welders, bricklayers and masons, carpenters, etc. Some could be transport and haulage assistants, chauffeurs, barbers, etc. Already, these categories of tradesmen and artisans are increasingly hard to find in Nigeria and we are already importing a large number from neighbouring countries. It is not difficult to find out why. All of these activities require training and apprenticeship, sometimes for more than two or three years. All the training riding an “Okada” requires may be accomplished in three days. The consequence is that Nigeria is steadily destroying its base of middle-level skilled technical manpower. We are building up a large population of persons who do not have any skills and competences beyond riding a motorcycle and who will sooner than later have families and societal obligations as they advance in age – in short, we are building up a large army of unskilled, frustrated and disconnected population groups. God help us when that situation matures into the predictable social explosion that can be expected! I gathered that the Lagos State government made three offers of alternative employment to the leadership of the “Okada” associations, all of which they rejected – an invitation to form cooperatives and operate BRT buses which would allow them to participate in a sustainable element of the government’s transport model; involvement in the various farming schemes which the state had developed; and sending the “Okada” riders to the 17 skill acquisition centres which the state government had set up to acquire skills in trades and vocations, with the opportunity of accessing microfinance upon the conclusion of their training. It is instructive that the motorcyclists were not interested in any of these offers! The continued influx of uneducated and unskilled persons with no roots in the community, many of them undocumented foreigners into the country in an unchecked wave of net migration, cannot be a sensible thing to encourage. Migration may be desirable and certainly people should be able to decide to relocate to another society whenever they feel economic or other opportunities lie elsewhere, but doesn’t that have to be moderated by clearly thought-out policy and laws? Is there any policy or research that supporters of “Okadas” can point to that has evaluated the Obama: Hope, change, developing world implications of the current “Okada” migration? Has anyone prepared for the implications on social services, housing and slums, neighborhoods, health and education? In short, are we content to walk blindly into the next generation of social disasters that Africa so regularly creates because no one is prepared to think towards the future? There is even a health and lifestyle dimension to the matter – our people no longer walk. Anywhere in the world, except you take a personal car or taxis, commuters will expect to be dropped at a bus-stop and then to walk, say, for about 10-15 minutes on average to their home. In the mornings as well, workers and businesspersons will typically walk some minutes to their closest train or bus stations. I personally have found that anytime I travel outside Nigeria, I come back healthier – I eat less and I walk more! However, in Nigeria, with the “Okada” phenomenon, a large percentage of people do not walk at all. They take an “Okada” to the bus-stop, or indeed straight to their destinations, and vice versa. No matter how short the distance is, people simply hop on a motorcycle. In effect, we are in the early stages of building an unhealthy generation that never walks! Medical and health practitioners will understand that, given the level of stress and tension in our society, perhaps we are building up a health time-bomb as well! As I wrote last week, commercial motorcycles are a social concern for reasons of health and safety, security, transportation economics, urban and city planning and effects on population and demography. They were the highest single source of road accidents and security breaches in the state with lost lives and limbs running into thousands. They are a sign of under-development and they perpetuate it, denying people and the community of skills and competences required in a modern society.

The "Okada" Society

I am aware that several state governments (virtually the entire South-South and South-East in addition to Plateau) as well as the Federal Capital Territory (FCT), Abuja have placed total bans on operation of commercial motor-cycles, otherwise known as “Okada” in their jurisdictions. These decisions were implemented without as much as a whimper from indigenes and residents of those states, with the exception of Plateau where it was politicized due to the ongoing conflict between the indigenes and the settler community, which were preponderantly the “Okada” operators. Apparently our people respond quietly and compliantly to militaristic bans! In Lagos, I am aware the State Government agonized for years on the menace (yes, menace!) of hundreds of thousands of commercial motorcycles riding in an uncontrolled and uncontrollable manner all over the state. They were a societal concern for several reasons-health and safety, security, transportation economics, urban and city planning and even the effects on population and demography. They were the highest single source of road accidents in the state, with daily fatalities, lost limbs and orthopedic incidents all across the state. One single day last year or so, I witnessed three such accidents-one right inside my estate and one fellow lay dead; minutes later blood and tears on the Lekki-Epe Expressway approaching Victoria-Island, and later in the afternoon in Lagos Island, a third incident in which people had suffered grievous injury! One Saturday morning while jogging, a lone “Okada” rider, probably intoxicated and underage, and clearly untutored on the mechanics of the machine, fell down unconscious practically at my feet. It took us a few minutes to revive him. I wondered what would have happened if he had a passenger! They were also a security issue. The Police and State Government have both confirmed that the preponderance of armed robberies are carried out by commercial motorcyclists, who enjoy key strategic advantages over their victims and law enforcement-mobility; flexibility in traffic; possibility of escape through alley ways and un-motor able areas. Those bothered about potential terrorism also had cause for concern! In the North-East, commercial motorcycles are the main facilitators of terrorist activities, for similar reasons that armed robbers have also found them convenient! Among Okada riders are a large number of foreigners-Nigeriens, Burkinabe, Camerounians and Malians, just about the same nations the “Boko Haram” group has been associated with! Beyond these negative side effects, the fundamental issue of course is that motorcycles were not designed for public mass transportation! The logic of mass transit is clearly that the more passengers a “vehicle” can carry, the more economically sensible and sustainable the mode of mass transit. That’s why buses, aeroplanes, ships and trains have developed as the primary means of public transport. Cars, which are used as taxis generally carry the least number of people, and are hence usually more expensive. In Nigeria, we managed somehow to zero in on the most inefficient, most dangerous, least sustainable option-motorcycles as our dominant means of public transport! And some of our educated and articulate citizens insist this gross anomaly must continue!!! And these are people who kept quiet when the FCT and other states imposed a complete ban on the operations of Okadas!!! As I mentioned earlier, Lagos State unlike these others spent years thinking through a more rational solution-they introduced a Bus Rapid Transit (BRT) system with bus routes to Mile 12, CMS and other (Lagbus) buses all over the state. I am aware the BRT routes are being extended to Ikorodu and Mile 2; they are building a light rail system as well as a ten-lane expressway along the Mile 2 corridor; they have built so many roads and highways all over the state; and then they settled only on a partial restriction of the Okada system on 475 out of the 9,100 roads in the state, and introduced sensible rules for their operations wherever they were not restricted. It’s a complete mystery that it is in Lagos where the government invested in a negotiated and sensible compromise, rather than a total ban that protests have been loudest!!! Is Lagos in some people’s conception some sort of jungle, an urban “no man’s land” where there can and should be no laws, and where people can do whatever they wish? And I notice that every time we attempt to examine the reasoning (actual lack of it!) behind the pro-Okada argument, the resort is to blackmail-the elite do not want “Okadas” because they have cars or similar posturing! The point is when Lagos State built BRT routes, were they for the elites? When they provided BRT and Lagbus buses, were these for the elites? The people who are killed or maimed daily due to accidents involving “Okadas”, are they elites? The victims of robberies carried out on “Okadas”, aren’t they preponderantly our poorer compatriots? Is it elites that will use the light trains being constructed? Are elites the users of the numerous passenger overhead walk bridges constructed all over the state? That accusation is of course pure blackmail and underserving of response! I support the Lagos State Government’s restriction on the operation of commercial motorcycles in Lagos State. A good government cannot allow their continued operation on expressways, bridges and major highways. Indeed a proactive government will continue to work towards their eventual replacement by more modern, efficient, safer, more sustainable and indeed cheaper means of public transportation.