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INVESTIGATION: How electricity distribution officials racketeer, extort customers in need of prepaid meters

INVESTIGATION: How electricity distribution officials racketeer, extort customers in need of prepaid meters
February 02
00:16 2018
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Disguised, for two weeks, as a desperate customer in need of a prepaid meter, TAIWO ADEBULU investigates racketeering rings among officials of Ibadan Electricity Distribution Company (IBEDC). In this report, he details how the officials source for prepaid meters from local producers, vend them in the black market to extort customers who can part with a huge sum for the scarce commodity and other sharp practices.


Unsympathetically, the scorching sun barked without any sign of respite as this reporter hurriedly made his way to the Capital Building headquarters of Ibadan Electricity Distribution Company (IBEDC) at MKO Abiola way in Ibadan on October 12, 2017. With just a few customers waiting to be attended to by the two good-looking female customer care agents, it didn’t take long before he was jolted out of the comforting waves the air conditioner was puffing into his face as he was beckoned to take a seat to be heard.

“Excuse me ma, I’m tired of the estimated billing I’m made to cough up every month. It is too much. I need a prepaid meter and I have come to apply for one,” he said.

“We are very sorry for that sir. But at the moment, we have stopped issuing meters to customers. We have a backlog of applicants who have not yet been provided with the product. Until that is done, we cannot say when we will start supplying out meters,” the rotund lady with a dazzling hair extension audibly whispered.

However, findings revealed that, IBEDC, the largest electricity distribution company in Nigeria with its franchise area made up of Oyo, Ogun, Osun, Kwara and parts of Niger, Ekiti and Kogi states, stopped supplying prepaid meters in mid-2017 after the credited advance payment for metering initiative (CAPMI) intervention programme where customers were made to self-finance meter acquisition was stopped by Babatunde Fashola, minister of power, works and housing.

WELCOME TO THE BLACK MARKET WHERE PREPAID METER IS GOLD

The prepaid meter procured at black market

Unlike every other market where items are peddled and sold in the open at certain prices, the black market where electricity prepaid meters are sold and huge sums exchange different hands is not a totally visible one. It is shrouded in open secret. Right inside the main offices, business hubs and service units, officials in connivance with the top officers trade with desperate customers who part with huge sum of money, while the meter is provided in less than two weeks and programmed into the database of the company.

Pretending to be an estate agent in need of units of prepaid meters, this reporter visited Monatan business unit where he met with some officials at the entrance who directed him to another official, a slender and tall man specialised in procuring meters. His countenance lighted in excitement hearing the mouth-watering deal of a huge supply. Without wasting much time, phone numbers were exchanged for further discussions. That evening, the business deal was negotiated as he insisted on N110, 000 (one hundred and ten thousand naira) for a three-phase unit and N60,000 (sixty-thousand naira) for a single phase.

Monatan business unit

“Sir, since we need a lot of it, can you beat down the price for us?” the reported pleaded.

“The process of acquiring the meters is not that easy. We want to work it out for you and it requires a lot of procedures,” he said. When this reporter asked if the meters were genuine since they were not from an official channel, he assured, “Forget it! When it comes to quality, we deal with companies that supply the product directly from Lagos. We will now work it into IBEDC platform.”

When asked if he could handle the deal alone or he would need more hands, he exclaimed that he could do it alone but would need extra hands from his colleagues for installations and that will cost the reporter extra charges. He said the whole process will take less than a week to complete and demanded his First Bank account be credited as soon as possible before work could commence.

He quickly added, “The only problem is that you are not going to get a receipt. As at the time we were supplying meters officially, customers used to pay to Fidelity Bank while the teller served as the receipt.”

RELICS FROM THE PAST: PHCN CONNECTION

The one-storey building housing the IBEDC service unit at Fasfas junction, Old Ife road was a beehive of activities. No one seemed to notice the presence of the reporter in the vacuum the station prides as an office until he approached one of the officials making haste to mount the service truck filled with wires downstairs. Having stated his mission, the official took the reporter upstairs and handed him over to a junior colleague – short, with a bleached skin. After much deliberations, he insisted on N70,000 (seventy-thousand naira only) for a three-phase meter unit and N47,000 (forty-seven thousand naira only) for a single-phase unit. Phone numbers were exchanged for further transactional discussions.

Gbagi service unit

When asked about the authenticity of the products he intended to supply, his mandible dropped with mouth agape. “The meter we are going to give you is original. There are two types. One is Unistar, which is not available at present, while the other is Mojec and it is available. If I know the house you want to install the meter, after installation, tell anyone who challenges you that you obtained the meter since the time of PHCN (the defunct Power Holding Company of Nigeria). It was Mojec that used to supply PHCN and they are reliable.”

When he was asked if he was going to issue a receipt of payment, he said, “Don’t worry about receipt. I’ll just need your passport photograph and your evidence of payment will be done. All I need is just a month to clear the meter and you will see that everything is new and intact.”

A POROUS DATABASE

IBEDC headquarter

At the multi-storied The Rock Plaza location of the Akobo Service Unit, an official was approached at the first office by the entrance where his colleagues were engaged in series of consumer complaint arguments. As this reporter was explaining his quest to procure units of prepaid meters for a housing project, the official, a young man apparently in his early 30s, pulled him out of the room to a location near the mechanic workshop.

For a single-phase unit, he demanded N65,000 (sixty-five thousand naira only) and N105, 000 (One hundred and five thousand naira only) for a three-phase unit. As phone numbers were exchanged to end the current discussion for further talks, the official swiftly noted, “If you pay today, you will get it within two weeks and it may not be up to that. The only thing that can extend it to two weeks is the programming.”

IBEDC customer care agents

On the authenticity of the product and how he intends to process it considering the fact that it’s not an official channel, he declared convincingly, “It is original and standard. They just brought it from Lagos; it’s that scarce. But that money I told you does not include installation but programming. You will give us your name and address and your card will be programmed with that name such that when you recharge, your name and address will be on the receipt. You will pay differently for installation because I won’t be the one to do it. Some of our officials are specialised in that.

“I’m sorry that we cannot give you a receipt because what we are doing is backdoor. Yet, it is genuine. Were are not supplying meters officially at present and customers are not allowed to pay in because those customers who paid about two or three years ago have not been cleared.”

On December 15, 2017, a sum of N65, 000 was transferred electronically to the Skye Bank account of the official to ascertain if the deal was genuine. At December 27, the product was available and ready for programming into the database of the company. On December 31, N6,500 was transferred to him for installation. On January 2, 2018, the programming was completed and the product with meter serial number 10621423684 was delivered with a purchase credit voucher in this reporter’s name.

However, information on the company’s website showed that IBEDC has metered 300,000 customers across its coverage – a huge decline from its 404,207 strategic metering plan from 2014-2017 – and has enjoined his customers not to pay for meter procurement or installation as it free of charge.

IBEDC MD DISAGREES WITH FASHOLA

John Donnachie

In an interview with John Donnachie, managing director, Ibadan Electricity Distribution Company (IBEDC), he said the management decided to stop supplying prepaid meters because the minister of power, works and housing cancelled the credited advance payment for metering initiative (CAPMI) scheme which was consumer-funded and there was no attempt to review the price of the meter after the exchange rate increased.

“When the exchange rate went from N155 to about N365, they refused to pay the price for the meter. So, we were unable to execute the programme under those conditions. Our limitation is the non-availability of fund to roll out the plan,” he said.

“I’ve lost 3 billion naira on the bill. Then, I must pay salaries. I lose money. If I give you a meter, there’s no payback. However, it’s our responsibility to meter everybody. At present, our preferred meter rollout plan is post-paid because our money will go further in metering more people quicker, effectively and controlled because I want to make sure meters are not bypassed.”

The receipt issued after purchase

As this reporter reminded him of a statement credited to the minister a few weeks ago while inspecting the National Meter Test Station in Oshodi, Lagos state, that the core business of distribution companies (DISCOs) is to transport energy and not to supply meters, John quipped, “It is wrong to say that it is not the responsibility of DISCOs to provide electricity. How do I control the power I give you? You can control electricity through meters. I think issues are being politicised.”

While commenting on the corruption and other sharp practices being carried out by officials of the company, he said, “It’s a huge problem. We are investigating everyone and we found our staff selling prepaid meters to people and vending. We change our vending system every day. We are working to enumerate customers. We have 1.5 million registered customers but we believe it should be about 3 million.”

The IBEDC enumeration exercise, according to a news item on the company’s website, is aimed at enhancing the efficiency of the distribution system in terms of quality of power and having a comprehensive database of all electricity customers in its franchise area using Geographic Information System (GIS) technology.

A SECTOR IN CRISIS

Before the privatisation of the power sector in November 2013, the federal government had introduced different interventional schemes to save the stormy sector. The National Prepaid Metering Programme (NPPMP) adopted the prepaid metering technology but failed due to corrupt practices of the Revenue Circle Management (RCMs) and government’s lackadaisical approach in funding the huge cost of meters.

When the federal government privatised the sector, some of the objectives for such reform were to ensure constant electricity supply and to address the metering gap. Hence, investors in the distribution companies were mandated to commit to a solid meter rollout plan over a five-year period under the Performance Agreements (PAs) with the Bureau of Public Enterprise, as it is also the responsibility of DISCOs to provide meters to customers in line with the Electric Power Sector Reform (EPSR) Act.

The EPSR Act of 2005 birthed the Nigerian Electricity Regulatory Commission (NERC) in October that year as an independent watchdog and regulatory body for the power industry. In 2012, NERC launched a new meter scheme to fill the huge metering gap and resolve the funding challenges that plagued the NPPMP/RCM model. It was tagged credited advance payment for metering initiative (CAPMI) plan for customers to quickly get a meter. Customers pay for the meter and the cost is refunded in form of credit units over a period of 36 months with interest. Even with the plan of the Nigerian Electricity Supply Industry (NESI) in 2013 to roll out meters to existing six million consumers across the eleven discos, the CAPMI scheme still became impotent from foreign exchange scarcity and irregularities by DISCOs and was eventually phased out.

METER OWNERSHIP AND FINANCING

Fashola inspecting of the NEMSA National Meter Test Station in Oshodi, Lagos

While inspecting the National Meter Test Station in Oshodi, Fashola reportedly said the federal government had concluded plans to involve more Nigerians in meter manufacturing.

“The core business of DISCOs is to transport energy; their business is not to supply meters. The government will address metering more vigorously this year with regulations which will open up business in metering to more investors,” he reportedly said.

However, under existing regulations, it is the obligation of distribution companies to meter customers notwithstanding the party who financed the meters.

This move is an attempt to put a lasting solution to the metering crisis as recent data provided by NERC indicated that 3.39 million out of the 7.74 million customers nationwide have electricity meters. This is coming at a time when customers feel that DISCOs deliberately dilly-dally on providing prepaid meters as a sly approach to continually milk them through bloated bills as the amount they are compelled to pay is not a true reflection of the amount of energy they possibly could have consumed within the billing period. And so, they cannot effectively manage their electricity utilisation. Hence, those who have access to the black market patronise the racketeers among the electricity officials and those who cannot find their way around gnash their teeth to cough up money and settle the crazy bills in order to stay connected.

CUSTOMERS GROAN UNDER WEIGHT OF CRAZY BILLS

Olajumoke’s electricity bill for December

Sixty-two-year-old Maria Olajumoke lives with only her aged mother at a gated duplex at Arulogun road, opposite Adekunle Fajuyi Cantonment, Ojoo, Ibadan. For more than three years, she has been battling to acquire a prepaid meter due to the ridiculous bills officials of IBEDC gives her every month, even though she uses only the fan in her room and the sitting room and occasionally watches television. Yet, she has been told that she cannot pay in for prepaid meters because the company is not supplying the product at the moment.

Olajumoke recounted, “Sometimes, they bring N5, 000 and some other time N3, 000 in a month. My mother and I cannot consume up to that amount; but when they bring the bills, there’s nothing you can do. The electricity supply is not even regular here. They bring it twice or three times in a week.

“They will embarrass you and threaten to disconnect your lines if you do not pay, yet they said we can’t pay for prepaid meters. With a prepaid meter, I can pay anytime and manage my consumption without embarrassment. I don’t have a fridge; the pumping machine is faulty and I don’t iron clothes. So, how do they calculate my bills? Before my last daughter got married, there was a month they brought a bill of eight thousand naira and we kept asking how they derived it but we were shunned.”

When Abiodun Olojede, the 60-year old pastor of Power Pentecostal Church, Podo, Ibadan was getting drained from the yoke of the estimated billing he was paying with no service to show for it, he approached an IBEDC official at Alakia Service station in February 2016 and paid the sum of N30, 000 to acquire a unit of single phase prepaid meter.

“I still spoke with him last week and he said the contractor that gets it for them said it’s still not available,” he said

“I just have to be hopeful because there’s nothing I can do about it. They just bring abnormal bills without reading the meter. We don’t get electricity regularly, yet they come to harass us that they will remove the wire if we do not pay. I haven’t used my refrigerator for the past 10 years. I know I didn’t pass through the appropriate channel, but it will take a very long time, even though the product is not available in their offices. Those officials hoard it and only make it available in the black market where they can make more money. So, we have no choice but to turn to the black market in the face of crazy bills.”

In an interview, Anjuwon Akinwande, a professor of Mass Communication at Babcock University, Ilishan-Remo, expressed dissatisfaction with the unbecoming attitude of IBEDC officials who had come to his house to advise him not to replace his faulty prepaid meter because he would pay more, instead he should accept a bill where he’ll pay a designated amount every month.

He said: “I told them that I wouldn’t pay a bill of what I didn’t use, but with a prepaid meter, I pay for what I use. We were discouraged. The former prepaid meter is not accepting payments. My tenants and I have complained and they made an arrangement with my tenants that they should pay certain amount to them every month.

“The distributors are expected to have their meters and I don’t know why we should pay for it because it’s their tool to make money. We installed the poles and transformers in my area; then, I was at the United Nations. These people cannot do business and you sold our property to them. They are not qualified to handle the electricity business. They are meant to provide everything. We’ve lived in Britain, France, America and we know how things are done. Once they are not capable of handling it, the privatisation deal should be renegotiated because the current system is not working.

“I know there are prepaid meters out there. Someone got one recently and he said it’s N40,000 for a single phase. Really, I do not like the black market. But if I cannot get one through the official channel, I have to buy it elsewhere because they have tampered with my meter and I’m not cool with the current arrangement. I can’t be paying for what is not calculated. I even thought you were coming to solve my problem when you mentioned prepaid meters over the phone.”

One can’t but imagine how electricity consumers are at the receiving end across the country. The government needs to rise to the occasion by sanitising the power sector.


This report is facilitated by the Wole Soyinka Centre For Investigative Journalism, WSCIJ, as part of its Regulators Monitoring Programme, REMOP, on electricity project.

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3 Comments

  1. Nickname..zulugana
    Nickname..zulugana February 05, 22:32

    I think any body can go to black market if he or she is comfortable with it there is nothing wrong in it any body has there right get the meter at any where if the meter is working fine i think is a good development if you can afford it go for it.But they should allow the contractors to be getting the meters to the consumers that is if he or she is licensed

    Reply to this comment
  2. Smith
    Smith March 16, 02:45

    NEPA people self…nawa o

    Reply to this comment
  3. Enny
    Enny March 24, 17:29

    Some IBEDC officials that are in task force at times vandalize consumers’ Reckling electricity cables instead of just disconnecting from the poles. They will then leave only their phone numbers on the disconnection notice instead of indicating the service unit they came from. This leaves room demanding outrageous rates for reconnection. IBEDC should investigate this extortionist attitude.

    Reply to this comment

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