In this interview with CHIKA IZUORA, Mr. Kola Balogun Chairman/CEO, Momas Electricity Meter Manufacturing Company Limited (MEMCOL), speaks on how the firm is becoming a training ground for engineers in the metering subsector.
The local content of creating original brand manufacturer is the process of creating the product itself…
It takes 50 per cent local content, that is the whole idea, the whole design of our metric is created by us. In our factory we achieve 50 per cent local content, so in economy of scale in terms of production, let me give you an instance, maybe one component. I am the only one using it and if we have a similar industry that use the same component, then it will be cost effective for them to produce it here because the basic raw material for virtually all semiconductor components are here, which is silicon, we have quartz oscillators, quartz crystal they are all raw materials that can be gotten from our own soil in Nigeria.
So every component that we use for electronics can be done locally, all things being equal but the economy of scale has to be put into consideration. How many companies are using the same kind of raw material? Thank God that we have Eleme Petrochemical, we are now buying some of the raw materials from Eleme Petrochemical.
Dangote is also coming up, some of the raw materials will be purchased from Dangote but some other solid state materials like copper and some other things are still being imported and we should keep encouraging industrialisation so that there will be similarity in the product raw material. But the local content itself is more than 50 per cent of the meter we are producing locally.
How our metering school is addressing manpower gap…
The Momas Metering School, located in Mowe, Ogun State, is the first of its kind world-class training school in Nigeria to provide requisite training and practical exposure to eligible candidates in the areas of meter installation, inspection as well as repair and maintenance.
What brought the idea is because there are lots of manpower gap in the industry today. And for a country producing large chunk of graduates as an output we should be able to train both technicians and graduates to go into the area of metering. It is another new line of development for people to know how meter works, how meter is installed, how they can maintain meters, how they can recalibrate meters such that if a consumer calls you for questioning they should be able to give the consumer sufficient education about it so they know it makes sense.
They should be able to go to consumer premises and demonstrate what one kilowatt means for him and using the meter for confirming the tariff he or she is paying. So, those are the knowledge we want to transfer to the public so that they can drive the entire industry and it will create a lot of employment in Nigeria. This is the first metering school in Nigeria.
Our partnership with the academia and foreign metering schools…
Well because of the sufficiency of the knowledge we have in the industry we will employ some lecturers from universities. But we will still have to give them the guidelines because we made the meters, we are the designers. We are affiliating the school with some metering schools in the United States and India. We want to partner with them so we can know what is currently running on global scale knowledge so that we are not lagging behind in giving our students the best knowledge on metering.
We are expecting the government to encourage us sufficiently…
It costs a lot to educate one person in terms of becoming a metering engineer because he needs some tools to work with. So we would encourage any partnership from any government agencies to partner with us in terms of an intervention for more students to come and learn it while avoiding the cost of the education.
The first set of certification we have gotten is to call the relevant agencies and the Nigerian society of engineers which has come to bless the school. So we have the blessing of the Nigerian Society of Engineers and the blessing of some other relevant agencies like NERC and NEMSA who have visited the school and have seen that we are well equipped and we are competing with international best standards.
It will be a bimonthly course. In two months you will be able to graduate and be a good meter installer. There are other higher courses, you can come back and become a meter auditor, meter designer and so on.
Why Nigeria is having metering issues…
On the metering side, meters are capital intensive in the sense that an average meter whether prepaid or postpaid will cost like N25,000 for one. Now considering one million meters, we are looking at N25 billion worth of investment. So, it is highly capital intensive now. The Electricity Distribution Companies (DisCos) that is supposed to invest additional money, claims that they are not collecting sufficient pay due to tariff inadequacies. So, there is no surplus to invest on metering.
That policy restricted the consumer from buying directly from the meter manufacturers which government is presently trying to amend. Now, we the manufacturers cannot sell without money because nobody funds us. We have borrowed money to set up the factory, borrowed money to purchase the raw materials and the meter is available. But it is not going round the sector because of one hindrance or another such as non-availability of money, inadequate policy to allow consumer to buy directly from us.
Our meter goes through a standardisation and if our meter is already standardised for one reason or the other, somebody should allow this meter to go into consumer premises because we have infrastructure to support that meter at any point in time.
We are here and we designed the meter to actually fit into our various peculiarity considering all the various voltage parameters that we have in the country to be able to withstand those lapses. It all boils down to part of the quagmire of the industry that we are not speaking as one single body that wants to move the power sector forward.
And if you recall the minister has been doing one of the best jobs, but there is so much pressure here and there to say look maybe he’s even over doing it, but somebody has to take the ownership because the ministry oversees virtually everything.
If the power sector fails the bottom line still lies on the ministry, so they have to do more. They have to supervise both the regulator and the players in the industry to ensure that they sit together and resolve problems.
Meters will be deployed to consumer premises with expected introduction of MAP policy…
It is because of the non-availability of funding that makes the regulator to start conceiving the idea of Meter Access Provider (MAP). MAP is an independent company which has financial muscle to invest into the sector especially in the area of metering. This individual company as soon as they pass through the due process and get licensed, they go and source for funding from anywhere or their personal funds and invest into the metering and they will be able to service the consumer so the meter will be taken as an asset.
It means we are redefining the way meter is going to be deployed to consumer premises. Consumer will now pay rent for the meter in order to recover the investment done on the purchase of the meter. And we are hoping that between now and the first quarter of this year, a whole lot will take place. That’s why we are preparing ourselves because inside the regulation there is a 30 per cent local content to protect the local manufacturers and that’s what we are banking on. We are already preparing ourselves by buying components, getting ready to support whoever is in that business to succeed.
Local manufacturers have the capacity to meet up the 30%…
If we test this 30 per cent and we are fulfilling the requirement then we can now ask for more. For instance, I am speaking for myself when I say I don’t want to be an Oliver Twist. Let us fulfill the 30 per cent they are giving the local manufacturers then we can ask for more. MAP policy will give consumers meters.
I should believe, all things being equal you know we always have the best form of idea in Nigeria, the best form of regulation but when it comes to implementation that’s when we start facing resistance for one reason or the other that I cannot explain. So, I should hope that it goes through the entire expectation. But let us start when we get there, we will be able to cross whatever obstacle that we are facing. My hope is that in the first quarter of this year, MAP should kick off.
I would not want to believe that the discos are frustrating the process because it’s a relief on their side…
Someone is bringing in funding you cannot provide on your behalf to invest in the sector. So we should be able to gladly welcome it. But however, lets even assume somebody is frustrating the process, let us start, by the time we get there we would be able to see what are the other challenges that is tasking the process, preventing it from flowing well.
Why I said this is because, if you recall what we talked about the tariff, there is this belief that through estimated billing they recover some of the money. You are likely right. The most important thing is that tariff review is a government policy and they need to fight for tariff review. Like I have said, it must be cost effective and sustainable. It must give room for profit on the investment. The present tariff regime is not sustainable, so they need to review it. But somebody must take ownership of the power sector in other for them to move the power sector forward.
The MYTO is reviewed every three to five years, but the parameter or the indices they are using for reviewing is still wrong. We must review based on the reality of what dollar is saying, because our naira is dollar related, because the gas we are using to power our turbines is rated in dollars, even the equipment we are using to service some of our hydro plants are purchased in dollars. And all the plants that we have in the country are all purchased in dollars. Until when we are fully industrialised, we still have to match our naira with dollar at any point in time in arriving at whatever tariff we want to.