Calls for the review of electricity tariff in Nigeria heightened as the Managing Director and Chief Executive Officer of Transmission Company of Nigeria (TCN), Usman Gur Mohammed, urged the federal government to consider an immediate review of electricity tariff which will be cost-reflective in order for the power sector to survive.
Mohammed said Nigeria currently operates the cheapest tariff regime in West Africa, and the subsidy policy in the sector which is estimated at N1.7 trillion in the last six years is not sustainable and will not attract the desired private sector investment.
Speaking on Thursday at the groundbreaking ceremony of TCN reconductoring project at the Ikeja West sub-region, in Ipaja-Ayobo, Lagos State, he said Nigerians should be ready to pay for electricity or the industry will go under.
Mohammed said the TCN has embarked on numerous upgrading exercise of weak transmission lines but the efforts would not translate to sustainable distribution of power as Distribution Companies (Discos) are rejecting power because the present tariff structure does not guarantee a return on investment.
According to him, “Cost reflective tariff is key to drive the sector and today Nigeria has the cheapest electricity tariff in West Africa, which will not sustain growth”.
He assured that the TCN is going ahead with grid expansion which includes re-conducting some lines where there exists transformer capacities but weak lines to carry power to the transformer capacities.
”Among the plan is to re-conduct Onitsha, Awka, Oji River line to optimise the capacities in Awka and Oji River. We are reconducting Ikeja West, Alimosho to Ogba, Ogba to Ota. We are also reconducting Alimosho to Alausa, Kaduna to Zaria, Zaria to Funtua, Funtua to Gwozo, Birin Kebi to Sokoto.
“We are also reconducting the line from Aba to Itu and so on. So these are the lines we are going to use these high capacity wires to reconductor them. The choice of Ikeja West to kick off the initiative is that the axis has the highest industry concentration in Nigeria and sustainable electricity supply along the route will stimulate economic activities,” he said.
He, however, regretted that whatever investment to stabilise the grid will amount to nothing except there is equal investment on the distribution side, adding that sustainability of the investments in transmission will not be guaranteed if there is no commensurate investments on the distribution side because all is connected to each other.
In his comment, the Chairman of Ikeja Electric, Kola Adesina, commended the TCN for the upgrade exercise, pointing out that all that consumers wanted is to have electricity at all times.
Adesina promised to offer all necessary support to ensure the project is delivered on schedule since consumers will experience outages in the course of the project.