The total shutdown of Michelin tyre operations in Nigeria and the consequent retrenchment of 1,200 employees, is another warning signal that the nation�s operating environment is still very hostile to business survival. The firm�s shutdown came at a time the Power Holding Company of Nigeria announced a whopping 50 per cent drop in power supply on account of epileptic gas supplies to its gas-fired thermal plants.
Michelin�s spokesman, Ojo Osagie, explained that high production cost caused by absence of reliable public power supply was the underlying reason for the closure of the Port Harcourt factory. Michelin, which has operated in Nigeria for 30 years, had undertaken production and staff rationalisation before finally giving up on the battle to survive the harsh operating environment.
The once thriving textile industry�the single largest private sector employer of labour�is down and nearly knocked out essentially by epileptic public power supply. Regrettably, for eight years, the ruling Peoples Democratic Party has failed to provide any clue to the debilitating situation which has markedly shot up the cost of doing business.
In 1999 when this administration took office, only 1,300 MW was generated out of a national capacity of 6,500 MW. After many failed promises and the collapse of many factories, the supply level was brought up to 3,800 MW. But that marginal improvement soon crashed to 1,400 MW. The PHCN says the situation may even deteriorate further. The imminent blackout, the power firm says, is due to gas shortage from Shell, which is shutting down for maintenance. The PHCN had earlier scaled down power production from Egbin on February 18, 2006 on account of vandalised gas pipeline. Up to 200 MW is also lost from Agip power plant in Okpai, following the shutdown of its newly activated units for maintenance. Egbin�s power output, therefore, has been reduced from 1,500 MW to 200 MW.
Other usual excuses are alleged vandalisation of gas pipelines and low water level at the hydro power dams. These challenges would have easily been surmounted if the power sector reform had been promptly formulated and sincerely implemented. The belated power plant contracts awarded toward the end of this administration�s tenure may not yield immediate results. Lack of gas, for instance, stalled the commissioning of a new power plant last December.
Yet, the nation�s energy supply potentials are huge. The associated gas being flared in the delta region is enough to supply electricity to the whole of Africa if properly harnessed. But poor planning and lack of foresight have delayed the take-off of the various gas-fired power plants owned by government and some independent power producers. The festering crisis in the oil-bearing region has also reduced the prospects for improved power supply under this administration.
These strange coincidences of shutdowns and general energy supply crisis probably prompted the National Union of Electricity Employees to suspect that the reduced power supply may be part of a grand plot to heat up the system and prepare ground for tenure elongation.
More curious is the report of Nigeria�s offer to export, beginning from this month, 80 MW of electricity to assist Ghana to fulfill its obligation to supply Togo and Benin Republic. Ghana is experiencing water shortage in its Akosombo dam, which is affecting electricity supply to industries. Unlike Nigeria, Ghana has recorded at least five years of uninterrupted power supply. This is another strange coincidence. Why should a nation that is faced with the worst power supply crisis be assisting another with a history of relative electricity supply from the little it has? Is it a case of charity beginning abroad?
Since the power supply crisis has failed to be decisively solved in nearly eight years of this administration, Nigerians should demand from the various political parties their action plans for the revival of the beleaguered sector. Adequate energy supply is so vital to the health of any economy that any party or candidate that does not have a solid blueprint for the sector does not deserve the electorate�s mandate in the April elections.