The Association of Meter Manufacturers of Nigeria (AMMN) has protested the World Bank-funded bid process for the supply and installation of 1.2 million smart electricity meters to the 11 distribution companies (Discos) under Phase 2 of the National Mass Metering Programme (NMMP).
In a letter dated July 4, 2023, sent to the Director General of the Bureau of Public Procurement (BPP), the association demanded that the World Bank-funded bid process be suspended immediately.
The letter, signed by the manufacturers’ association’s Acting President, Ademola Agoro, and Secretary, Duro Omogbenigun, urged the BPP DG to direct the Transmission Company of Nigeria (TCN), Nigerian Electricity Regulatory Commission (NERC), and Central Bank of Nigeria (CBN) to honour the pending four million meters supply contract awarded to its members since November 2022 under Phase 1 of the NMMP.
According to the Association, the World Bank-funded bid procedure, recently announced by the TCN, favoured foreign enterprises with no track record of investing in the country and violated the federal government’s backward integration policy.
“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 programme already awarded to some of its members since November 2022 by TCN, a bid process that your office approved”, the association said.
“That your office be aware that this particular bid process is being opened to foreign companies (manufacturers, suppliers, and exporters) of fully-built electricity meters with a 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 4 million meters to the local meter manufacturers in 2022,” the letter read.
As a result of backward integration, the group stated that its members had increased their manufacturing capacities by acquiring bank facilities to match the distribution firms’ demands for these meters.
It went on to say that they were ready to supply these meters before the government abandoned the awards already given to its members and went ahead to advertise the World Bank-funded international procurement for 1.2 million meters under Phase 2, the requirements of which, according to the association, favored foreign companies.
Meter manufacturers specifically encouraged the BPP and the federal government to safeguard the local metering sector from utter collapse and protect Nigerian investments and employment.
As part of its petitions, the organisation asked the BPP DG to direct the immediate suspension of the TCN bid process for Phase 2 awaiting thorough engagement with electricity sector stakeholders, particularly meter manufacturers.
It stated that such action would serve to alleviate its members’ concerns about the status of Phase 1 of the NMMP and the issuance of contracts for the delivery of four million meters, which had been awarded to its members since November 2022 but had not yet been funded.
Also, they appealed with the BPP head to direct the TCN, NERC, and CBN to honour the contracts issued to local meter manufacturers in Phase 1 of the NMMP for the delivery of four million meters.
In addition, the association requested the BPP CEO to “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 prioritise local meter manufacturers, thereby align Phase 2 with the Local Content Policy and Backward Integration Programme laws of the Federal Republic of Nigeria to catalyse economic growth and development. We pray and hope for your urgent intervention to address this issue.”
While appreciating 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, the association also stated that such good intentions should be executed while taking into consideration the sanctity of contracts.
AMMN said that such good intentions by the TCN and NERC should reflect the present economic state of Nigeria where the nation imports fully-manufactured products but make policies that encourage building local production capacity to create employment for the teeming youthful population.
However, the association warned that the proposed World Bank-funded bid process would lead to a disastrous outcome for its members as well as local meter manufacturing and assembling companies in Nigeria, who have invested over $500 million in the industry.
It added that the bid process would also cause massive job losses in the industry that currently employs over 10,000 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,” the association added.
The association insisted 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 only wipe out the investments of the investors in the industry.
Adetayo Adegbemle, Executive Director of PowerUp Nigeria, said there are 5 Lots in what was advertised, stating that each of the 5 Lots are asked to raise / submit Bid Security in US Dollars. “For instance, anyone applying for Lot 4 is to raise a Bid Security of $450,000.”
According to him, local meter manufacturers are struggling to survive in the Nigerian economy, adding that even those who patronised for the NMMP are still being owed.
He queried whether the huge amount of money in Bid security is intended to push local meter manufacturers out of business.
“It must be stated that we have had this kind of World Bank Loan with similar conditions before(2012). However, none of the Imported Meters procured under that scheme are presently still in the system.
“Again, this is a World Bank Loan, which we are definitely repaying. It is therefore imperative that we also use this to deepen our local manufacturers’ capacity,” he added
