Engineer Garba Haruna is the Managing Director and Chief Executive Officer of newly acquired Kaduna Electric. In this chat with SEGUN AYOBAMI, he says he can turn around the fortunes of the company with the injection of qualified young staff into the system among others.
TI: Kaduna Electric is a new energy company cutting across four states. As MD/CEO, what are your plans for the company and its customers?
We have robust plans for the company because we are not unaware of the fact that our valued customers are expecting more from us as a private company. We want to be a leading power company in Nigeria; though it may take time to reshape things, we will definitely get there. The company has been there for over 40 years. We know the structures of the business, and we understand the business of electricity. We also know where it pinches; we shall restructure the company both in terms of workforce and operational excellence. In fact, we understand the company we bought.
The regulator said to us after taking over; ‘take about six months to change what can be changed. Study the situation critically and roll out your plans to better the organisation.’ In the past, Gencos, TCN and DISCOS were all owned and run by government; whether you pay or you don’t pay your bills, it does not matter, since they are all government entities; but the new arrangement now is that generation and distribution are privately owned and only the transmission company was retained by government. The idea is that a private company cannot sell electricity cheap without paying for it hundred percent. Now, all participants in the electricity market must meet up their obligations in totality, distribution companies must pay their bills to the transmission company and the transmission company in turn must settle its bills to the generation companies and so it goes down the ladder.
We are set to recruit young, energetic and information technology-driven staff to make things happen the way it should. We are currently receiving application from interested candidates who wish to be part of our success story and over 60,000 applications have been received through on-line system. They include old staffers of KEDC who want to continue with us.
You see, we are carrying out an evaluation of all our existing staff; we would retain some, but, honestly, I don’t know how many we are going to retain or let go. If they meet our requirements why not, but we will try our possible best in the evaluation process to retain best and qualified staff.
TI: What encouraged you to venture into the business in the first place?
As entrepreneurs, we ventured into the electricity business because we want to bring our expertise and wealth of experience to bear on the sector. We want to add value to the industry and further meet the expectations of all stakeholders in the value chain; from our customers, the regulators, the government, the business community, etc, are all in agreement that there must be improvement in the sector to drive the socio-economic locomotive of the country.
TI: How far have you gone in realising these plans?
It’s been a herculean task. Not east at all. When it was a government entity, it was realised that there was a lot of inefficiencies in the electricity sector. So, the government decided to privatise it to allow efficiency and improvement, which is the essence of privatisation. That is natural and logical; if you have an asset that is not adding value to the society, what is the wisdom keeping it? But where you are making money on an asset you would not want to part with it so easily.
TI: Some people have said that you are denying them of supply through the load shedding exercise; what is response to that?
The answer to that is very simple. Those who understand the way the technology works know that you can’t hoard or store electricity. Once it is generated, it must be transmitted and distributed. In fact, it has to go to the end user- whether a paying customer or not.
In terms of generation, the current allocation to Kaduna Electric is eight per cent of the total national generation. By this simple sharing formula approved by Nigerian Electricity Regulatory Commission (NERC), it means that if 4000 MW is generated, Kaduna Electric gets eight per cent even if it is 10,000 MW, the percentage is still eight. The present allocation is not enough for Kaduna State alone and our franchise areas cover Kaduna, Zamfara, Sokoto and Kebbi States.
This necessitated the current power rationing, since we don’t get enough energy; we decided to share what is being given to us so that everybody will have a bit of it, but there is low generation, from 4000MWs it dropped to about 2,500MWs lately and we don’t have our own power plant in Kaduna and other means of generation where we can boldly say we are hundred percent in charge.
TI: The company’s workers recently protested against the stoppage of unionism and medical services by the management; what is your reaction to this?
How can we discourage unionism when our management has been having series of meetings with the union? Some things require clarification. What we discovered or realised is that the protest is more political than agitation for workers welfare, those who lost out during the bidding process of the privatisation decided to instigate the union s to destabilise our operations.
We can listen to the union if the issues at hand affect staff salary and allowances, just like the way we stopped the discrepancies in staff salaries by centralising the system and insisted staff salary be paid to staff bank account. We in the private sector don’t need the union to come and tell us how to do our job. What we need is consultation and it is on that basis that we have being having consultations with them. We can sit and discuss issues and talk things over. The union members are comrades and they should realise what they represent and stop the unnecessary agitation in the interest of all.
On medical services, we inherited huge debts under the current arrangement with hospitals and clinics whereby staff can be treated and will be paid. The hospitals and clinics approached us when we came on board with debt of over N400 million and that if this huge debt is not paid, they can no longer render services and in private sector if you pay such amount of debt. We viewed the debt as a liability issue and forwarded it to NELCOM, the agency set up by government to handle liability issues in terms of debt, staff severance, etc, because the agreement with the government was that, we should not inherit debts of any kind. Since we are looking for productive staff, we agreed that if any of our personnel falls sick he will be treated and we can pay. Sicknesses and accidents do not happen every day; we are also making arrangement to provide world-class medical services for members of staff.
TI: How do you arrive at your charges; can you shed more light on your meters deployment plan?
First of all there is Multi Year Tariff (MYTO), which is being managed by Nigerian Electricity Regulatory Commission (NERC); we, the distribution companies, do not set tariffs, it is the responsibility of the NERC to do so. However, under the pricing regime, what NERC said is, going forward, as a distribution company, you can present a draft tariff proposal to NERC and they analyse every components that triggers MYTO functionality by considering such areas as the inflation rate, exchange rate, current generation capacity, size of customers, etc. After the proposal is exhaustively scrutinised, an approval for implementation or otherwise could be given.
On metering, more than 60, 000 meters that are in circulation are by-passed; most customers do not come to vend, the service wires which ought have looped through meters are bye passed by customers and this is not healthy for business globally.
TI: Since you took over, there has been an increase in the price of electricity as well as fixed charges which NERC says is illegal
Fixed charges are capacity charges. We do not fix charges. It is the responsibility of the regulator to do that. Fixed charges help DISCOS to recover their investment and improve on networks. I don’t think NERC has ever described fixed charges as illegal, you should verify this. In any case, no distribution company has the right or power to fix or review tariffs. All tariffs are approved by NERC.