Metering: Indigenous manufacturers petition FG, caution against TCN’s World Bank-funded bid leading to sack of 40,000 workers, others
Say TCN, NERC, CBN, others should continue 4m meters bid
By Our Correspondent
The Association of Meter Manufacturers of Nigeria, AMMON, has petitioned the federal government over the ongoing Transmission Company of Nigeria, TCN’s World Bank-funded bid process targeted at supplying 1.2 million smart meters to the 11 Electricity Distribution Companies, DisCos in Nigeria
The association disclosed that the bid would scuttle Local content development, and backward integration which has started yielding fruits while encouraging massive importation, the drain of scarce foreign exchange and the retrenchment of about 40,000 local workforce.
The bid is already open to foreign companies (Manufacturers, Suppliers & Exporters) of fully-built electricity meters with a planned customs duty waiver (Import Duty Exemption Certificate) to import meters into Nigeria.
But the association maintained that it contradicts the vision of the government that has encouraged indigenous companies to establish domestic manufacturing and assembling of meters, mostly through bank loans, engage and train local human capital and mass produce meters in order to conserve scarce foreign exchange while creating many multiplier effects in the country.
In its petition signed by the Acting President, Engineer Ademola Agoro and Secretary, Engr. Duro Omogbenigun, the association urged the federal government to, “direct the immediate suspension of the TCN bid process for Phase 2 funded by World Bank pending proper consultation of the stakeholders in the power sector, especially the meter manufacturers, to address our members’ concerns regarding the pendency of the Phase 1 Mass Metering Program and the award of the contracts for the supply of 4million meters already awarded to our members since November 2022 but has not been funded till date.
“Direct TCN, Nigerian Electricity Regulatory Commission, NERC and Central Bank of Nigeria, CBN to honour the award of contracts for the supply of four million meters as awarded to the Local Meter Manufacturers in Phase 1 of the Mass Metering Program.
“Direct consultation among local stakeholders during the suspension of Phase 2, to create viable options and strategies to restructure the evaluation criteria and guidelines of Phase 2 World Bank Bid to prioritize Local Meter Manufacturers thereby align Phase 2 with the Local Content Policy and Backward Integration Program laws of the Federal Republic of Nigeria with the objective to catalyze economic growth and development. We pray and hope for your urgent intervention to address this issue
“The Tender which closes on July 11, 2023, if left to continue, would amount to a constructive breach of the award of contract(s) for the supply of Four Million meters under Phase One of the program already awarded to some of our members since November 2022 by TCN, a bid process that your office approved.”
“That your office be aware that this particular bid process is being opened to foreign companies (Manufacturers, Suppliers & Exporters) of fully-built electricity meters with planned Custom duty waiver granted to them to import meters into Nigeria. These importers, who are primarily foreigners, have yet to make a verifiable investment in the backward integration programme of the Federal Government, nor have they made any investment in local manufacturing and assembling of meters in Nigeria, which has always been the standard requirements for Meter Assets Providers (MAP) in Nigeria to show proof of investments in the backward integration and must have Meter Assembling/Manufacturing Plants and factories in Nigeria.
“You may further be reminded that TCN and NERC, under Phase 1 of the Mass Metering Project of the Federal Government, a bidding process that your office supervised and gave a “Letter of No Objection to”, awarded four million meters to the local meter manufacturers in 2022.
“As a result of backward integration, our members scaled up their production capacities by obtaining facilities from the Banks to meet with the supplies of these meters to the distribution companies. We readied to supply these meters before the government abandoned the awards already made to our members and advertised the World Bank-funded international procurement for 1.2 million meters under Phase 2 which the requirements are majorly in favour of foreign companies.
“While we appreciate the good intentions of TCN and NERC to achieve the mass metering of Nigerians and bridge the metering gap in the sector towards solving the nation’s electricity problems, we also wish to state that such good intention should be executed while taking into consideration, the sanctity of contracts, the present economic state of Nigeria where we can’t continue to import fully-manufactured products but make policies that encourage building local production capacity to create employment for our teeming youthful population.
“We are constrained to inform your office that the proposed bid process would lead to a disastrous outcome for our members; Local Meter Manufacturing/Assembling companies in Nigeria who have invested over Five Hundred Million Dollars in the industry and would also cause massive jobs losses in the industry that currently employs over 10,000 (Ten Thousand) Nigerians in direct employment and more than 30,000 Nigerians in indirect labour with competitive wages comparable to the communications sector.
Our members have invested considerable resources in the metering sector with capacities to improve if only Government could sustain its present policy of allowing only genuine local meter manufacturers and assemblers to continue to supply meters to the Discos without skewed tender processes like the proposed World Bank Bid that seems to shut out local manufacturers from even participating in the process.
“We believe that any attempt by the government to jettison the laudable policy of growing and buying made-in-Nigeria products at the expense of encouraging mass importation of products, including meters into Nigeria under any guise without comprehensive consultations with the stakeholders in the sector would not only wipe out the investments of the investors in the industry but will also discourage further investments in the industry thereby leaving our metering sector at the mercy of importers, which President Bola Ahmed Tinubu aptly described as container economy during his 2023 Presidential campaigns.”
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It added: “We wish to state again and again that the duty of industry procurement regulators in every developing economy, first and foremost, is to protect its local manufacturers and would only try to augment importation of fully-built products where there is a clear-cut gap between local production and consumption, but that is not the case here. Today, available statistics show that the local manufacturers of meters in Nigeria have the required capacities to produce and supply four million meters per annum to the power value chain in Nigeria.”
