Author: The Nation

Admittedly, electricity supply remains the number one need Nigeria seeks to overcome, but this has remained evassive for so long, and even so now. The Executive Management of Cummins, the world’s leading manufacturers of diesel engines believes that the way out of the power challenge in Nigeria lies more with government taking the lead with corresponding back-up by the private sector. The Director, Cummins Distributions Business, Africa and Middle East, Kwame Gyan Tawiah, explains in this interview with SImeon Ebulu.

 

What should Nigeria do to have steady power supply?

I think when it comes to the power distribution in the country, like any other country, the primary responsibility lies on the government; their political will to come out with a regulatory framework that will make it easier and possible for others to participate, since government will not be able to solely fund the generation and distribution of power in the country.

So what I think is necessary at this time, is for the government to have that political will to come up with the framework and not only the framework, but to ensure that the framework is pursued because in Africa there’s been a lot of frameworks and a lot of policies that governments, with very good policies, but then the implementation becomes a problem, and that is what I think needs to be looked at to make the power situation in Nigeria able to be tackled.

So we ask ourselves, are we bringing in the right partners, are we bringing in those with the know-how, with the infrastructure to participate, or has it become one of the very things that we do in our part of the world, that is Africa, where chronism, friends, the same people turn round to do the same thing with different names! Until we bring in those who have that know-how to do it, we will continue to wallow in the same situation. So that is what I think Nigeria is also facing at this time.

Like was said by my other colleagues, we manufacture for others who have the supply of power as their core business to purchase from us and do exactly that. We would always like to focus on our core business of manufacturing, and not going to compete with our clients in their area that they have the expertise. So, Cummins will continue to support by making sure that we produce the kind of engines that will  be able to help power our economies and the world to success. So that we will continue to do.

Nigeria has different options – hydro, thermal, solar , et cetera to generate power from. Which do you consider should be the preferred?

Hydro would be the cheapest means of generating power. However, hydro has also got its limitations in the sense that nature sometimes determines what amount of water it would give for us to be able to produce the power from the hydro dam. Nigeria being one of the largest producers of natural gas, I think it is an area – and gas is also clean when it comes to being used as fuel, it’s a clean fuel. So I think that Nigeria should focus on developing the infrastructure that will send gas into every part of the country to make it possible that the independent suppliers who would have to supply power from areas, would have access to the gas to be able to supply the power that they need. You know, when you centrally generate power and distribute, the electrical people will tell you that there are major losses along transmission lines when you travel long distances, so the best way is to ensure that there are power generation plants at various locations.

And look at the size of Nigeria with 36 states, one would think that even if you have power generation in every state, which would then be interlinked to provide national network, that would be better for the country. So if you ask me today, based on what is available to us naturally, gas is something that we can go with.

When it comes to the sun,  we have it in abundance, we have only two weathers, rainy season, and then the dry season. And even during the rainy season, the sun is up there, we don’t enjoy anything like winter, summer and the rest. So again, going into solar would help. One would say that, yes solar continues to go through development. Because if you look at the panels that were used, and the panels that are used today, technology is helping solar to grow. The initial capital investment in solar could be very high, now again, through technology the cost is being reduced, so, government could also look at solar.

Now, wind of course has its own limitations because you need a certain wind velocity to generate what we want to generate. So, if we had these two, I would rather focus on them and then generate that power as much as we can, until it is certain that the necessary developments have come for us to move away from these two sources. But coal, because of the environment, I think we are all moving away. So for government to invest in coal, I would rather we invest in the gas that is available to us. We could supply the whole west Africa with gas and not suffer. So supplying Nigeria with gas for us to be able to generate power with gas would be the way to go if you ask me.

So why haven’t we gotten it right?

I always like to liken it to this, we have traffic regulations yet we jump traffic lights. Is it that we don’t have the law, we have it. Why do we do it, because most of us in this part of the world who jump traffic lights, when we go to other parts of the world where the law is enforced, we don’t jump it, the same people; we don’t jump. Why, because somebody would get arrested and fined badly. The policies and the regulations themselves do not create the situation, or, let me rather put it this way, the policies and regulations are not the solution, they help us arrive at the solution. The way they help us is that they are going to regulate the way we operate to get us the best. The question is, has our government ever enforced any of these, because when you look at it, it is a brother, a sister, a great grandmother, an uncle who has set up some interesting company and has been given a license for something they have no idea about. And when you do that, how do you solve the problem?  So we have the framework, the framework says the private sector should come in, when those with the know-how come in, the technocrats, the politicians put impediments in their way; make sure that it is difficult for them to get access. When you go in there it says you have 30 independent producers and suppliers, go deep into it and find out, if not all the thirty, about at least 28 of them are non-performing people who have gone for the license and now act as middlemen between us; the state and those who would actually produce the power. Of course our attitude of corruption, so the man who has the license wants to make profit far and beyond what the man going to generate the power would like to make, so why would he want to participate in an environment like this. So that is what I think our problem is in solving our power problem. And I always say it is not a Nigerian issue, it cuts across the continent with just a few exceptions.

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Will adopting a commercial tariff, or a ccomplete deregulation of the sector do the trick?

That is a very difficult question to answer. For now if you ask me, I would say, like education, governments can’t just turn their back completely and ask the average individual, most of whom are poor to be able to bear all the cost of it. If we are able to generate the power and help our industry grow, our industries would provide employment, generate wealth and once the wealth gets generated, government would then look at how they could gradually withdraw out of it. Remember most African countries used to subsidize fuel, and it was a necessary action at the time. As the middle class grew and people became more okay and able to fund that, governments gradually pulled out the subsidy. Even though sometimes it could be a thorny issue, people would go to every extent to make sure they don’t pull out, but if properly handled, government  should gradually pull out and the people bear the cost of it.

And that is what I think government should do, it is part of developing the country. In developing the country, government would have to invest in the country’s development. As they invest, they would sometimes have to introduce some level of subsidy or reduce taxes. You give moratorium to those producers to make it easier for them to produce, you give moratorium to them so that they can be able to bring in their infrastructure that they require. If they’re bringing in say engines, turbines, you make sure they have zero tax, you give them incentives, good incentives. If they come in and you want them to set up in say- Maiduguri, you give incentive to those who would go to Maiduguri to set up rather than those who would set up in Lagos.

So as you go through this, what will happen is, you make it easier for them to go, their cost of production becomes lower, and they are able to produce the power, and the people are able to purchase the power and use it to develop the country. So, that is what I think our government should do. As always, people say that it is the private sector that becomes the engine for growth, yes it is, but it is the private sector that has been enabled by the government that is able to provide that engine that is required for the growth of the country. So until our government sees their responsibility of providing that enabling environment, we will continue to struggle.

What role can Cummins play in this power generation project?

First and foremost, we would continue to produce the engines, or the generators that are required in producing the energy. We would continue to provide solutions, which is why say we try to do this by ensuring that we empower our customers to succeed. In the short term, what we are doing now, being available in the country, is providing the engine and the technical know-how to ensure that these engines that we produce are able to work and provide the power at the time that they are most needed, that is number one. Secondly, our value of integrity is to also help eradicate the perception and also corruption, as much as possible because we would always like to do business the right way. Therefore, once we are able to eradicate corruption in the long run as we do business with integrity, what happens, governments saves money, because our African governments lose huge sums of money because of corruption. But if we won’t do it and we are able to influence others in our industry, or on the continent to stop it as much as possible  (we cannot completely say zero), but to reduce it to the barest minimum, such that government has the resources to re-invest in the power situation, I think socially we would have helped.

What about Cummins and its values?

So, I have the difficult task of telling you about a global company that is a century old in five minutes, so I will try to do that. Cummins Diesel Engine company based in Columbus, Indiana was co-founded by Clessie Cummins and William G. Irwin in 1919. Clessie was more of an inventor and an engineer, so he built the first Cummins engine which was a mono-cylindric diesel engine for agricultural application, and William Irwin was from an Irish banking family that had moved to Columbus few decades earlier. So, William Irwin founded the business and Clessie was really the engineer designing the new products, that’s in 1919. I just want to say, we did not invent the diesel engine, it was invented a couple of decades before that by Germans’ Hans Diesel. It was still a new technology, and that time, diesel was not yet the primary source of fuel for transportation.  a century we are simply today the largest diesel and natural gas engine manufacturer in the world. We are still head-quartered in Columbus, Indiana but we are available in about 190 countries across the world through our distribution business.

Company, very profitable, and leading the world through technology, innovation, and people.

The other thing I would like to share is our values and mission and maybe you are planning to expand on that, but, I’d like to comment quickly on what we capture as our story. And every five to ten years we revise that. So, our mission while we exist – you know this version was revised by our senior leaders about three years ago – is to make peoples’ lives better by powering a more prosperous world. And what we want to accomplish, that is our vision, is simply to innovate for our customers to power their success. So, as you may know, in most of our businesses we provide the power either an equipment or application that our customer intends to use for their own businesses. So in that vein, we power about 40 different applications with our engines, you know, from power generation which is our biggest market here in Nigeria and throughout Africa and the Middle-East more boldly, to commercial vehicle transportation, like highway trucks, buses, and different applications, but also off highway applications like in construction and mining.

So, we power most of the big equipment that move earth, either underground, open pits, or quarries across the world. So over forty different applications around the world. And, how we want to accomplish this mission and vision, I’d like to share our five fundamental core values; these values have no price for us, this is the way we would like to accomplish our mission and vision.

The number one fundamental one is our integrity; we want to do what we say and we want to do what is right. So that means that we would not compromise, we want to do what is right. Some people have asked me, in Africa where in some places we are challenged, how do you lead the value of Cummins… It is our choice, we would walk away from business if going after it means we have to compromise with our value of integrity.

Diversity and inclusion, we believe that the sum of the all is bigger than each individual one. So, we believe that being, more than diverse – as Ade was introducing us and across his team, you will see that we reflect the diversity of the region or the nation where we do business. Because we think we get to the right solution by bringing a different spectrum of view point and values. So diversity and inclusion is central.

Caring. We want to demonstrate awareness and consideration for the well-being of others. This is through internally to our employees as well as it is to our customers. We believe customers buy our equipment, mostly they want value out of it, they want to use it for many years, and so to get the value for their money, they need these equipment to be serviced, to be supported and all that, so they rely on us. Caring for our customer means putting our right foot forward for them to get this value, but we can’t do that if we don’t care for our own employees so that they bring the best of our knowledge and their own abilities to work everyday. So caring is absolutely central. We also care for our communities. In places like Africa and the Middle-East actually corporate responsibility is also part of our strategy, just as important as becoming a leader in different market applications. So, caring is central.

Excellence. We want to develop excellent results. Results for our customers, results for our shareholders, results for ourselves. You know the value of excellence for us… There is not one single person that we hire who is not the best out of the candidate pool that we’ve considered. And we expect of these people to put their best foot forward because we are known globally as a premium brand. It doesn’t matter if we are in Uganda, or Guinea, or Nigeria, we are supposed to provide our customer, and we try to provide our customer the same world class support. In fact we have global customers, you know customers that we support in Colorado, or in the Queensland in Australia and they are expecting the same service level anywhere in Africa. So, we try for excellence.

And finally, teamwork. We work through collaboration. Our environment is not a cut-throat environment. We don’t win individually, we win as a team, and we value teamwork.

So that is really the few traits, those five are our central core values and every employees that we hire who do not lead those values, they find themselves out of the system cos you can’t live through our organization if you don’t exhibit those. And leaders are called upon to lead on those values as well so it’s very difficult to rise in the rank as a leader if you don’t exhibit and take ownership to ensure that those values are lived.

Thank you for your time this morning and I hope throughout the day we get to learn more about Cummins. Thank you.

I’ve been working now at Cummins for five and a half years, and every time I hear a leader talk about Cummins, either some  facts that I knew hit me slightly differently, or I pick a slightly different nugget than what I knew before. So thank you — for that again. This is the longest portion of the event today but it’ll be over in a short ten minutes or less. I would like to tell you a little bit about Cummins West Africa Limited and the Cummins operation in Nigeria. Having had the opportunity to hear — speak, what I would love to do is just give you a sense of how all the vision, mission, and values are implemented in this environment, and implemented by my leadership who I have just introduced to you. So, I’ll start with a bit of a history lesson on CWAL and then I’ll move to some of our co-activities here as well as some of the values that — spoke about and how the rubber actually meets the road in real life and not in theory. At the end of the last century, Cummins started in Nigeria through a distributorship with SCOA. At that point, we entered Nigeria in a way that is not uncommon at all. In many places today in the world, where we are not present as an organization, where we do not own a joint venture or a wholly owned distributor as we are in Nigeria today, we have independent distributors who sign on with us and pledge to distribute our products, sales and service. We started first with SCOA and after several years, had a bit more of an appetite to grow, we felt Nigeria had the right environment for us, and haven decided exactly how we want to proceed, we decided to establish a deeper presence through a joint venture with AG Leventis in 2007. At that time we moved forward and incorporated a company called Cummins West Africa Limited. The reason for the name was that we had ambitions beyond Nigeria to broaden the business, but with an anchor in Nigeria. However, after several years Cummins acquired a distributor in Ghana, independent distributor in Ghana, and so the necessity to run west Africa from Nigeria fell away, and of course given the opportunity in Nigeria there was no need to really focus outside, there’s enough to do here. So, not withstanding the

 

Fact that we are called Cummins West Africa Limited, we are the Nigeria diesel distributor. Now, between 2007 and ’14 we had a good run with AG Leventis, AG Leventis and Cummins, through CWAL, ran the business, opened offices, not just in Lagos but also in Port-Harcourt and Abuja. The business at its core was power generation, and we had a beach head into marine through the PH office. It was a good time for us. However, toward the end of that period, the vision for moving the business forward was not fully aligned between ourselves and AG Leventis, and we decided to cordially end the relationship by Cummins acquiring the 50% of CWAL that AG Leventis had owned. So, in 2014 the transaction was concluded and we went to a Cummins wholly owned entity in Nigeria. So as we are today, CWAL is wholly owned by Cummins Inc. The Columbus, Indiana based company. So that’s where we are today.

By Okwy Iroegbu-Chikezie

Governor Babajide Sanwo-Olu’s plan to transform Lagos into a smart city received a boost as technology companies in China have expressed their willingness to partner with the State towards achieving the goal.

At separate meetings with the management teams of Ehang and Huawei, Sanwo-Olu assured the tech firms of the readiness of the State to take its rightful place in the comity of megacities by providing key technology and infrastructure required.

He said: “We are at the stage of building critical infrastructure that will make our city more habitable. We want technology to drive economic innovation, public security, health management, waste management, traffic management, government processes and services to the public. We do not have the big cheques to sign for this total transformation now, but it is a journey we know will take us into the future we really should be as Africa’s most populous city and seventh largest economy. The vitality of our 22 million people and political stability are valid collateral that should provide comfort in the collaboration we are seeking”.

He maintained that government is determined to efficiently manage traffic and drive compliance with traffic rules from a single point. Traffic officials need to get equipped with gadgets that interface with the command centre real-time.

Read Also: Wigwe: Art X Lagos project lifting local talents

 

Speaking after a guided tour of the Huawei Campus in Shenzhen by the Lagos delegation,  the Managing Director of Huawei, Eric Zhang,  said: “We at Huawei are excited that Lagos State is planning digitisation of its assets, processes, operations and public service facilities. Personally, I am familiar with Lagos State and I know that the State needs this transformation and is capable of embarking on it. As someone who is very familiar with Nigeria and Lagos especially, Huawei is ready to work with Lagos on the transformation journey. I know that transforming Lagos into Smart-city is an exercise that will happen in phases, but the most important requirement is government commitment, which you have demonstrated”.

Earlier, he called on the Ehang management, a leading Autonomous Aerial Vehicle (AAV) technology company, for possible collaboration on providing facilities for emergency services and security agencies in the State.

He said: “Like other megacities in the world, Lagos State is still faced with some challenges that will require very innovative solution. For instance, emergency situations will require urgent and speedy response, just as when there are security challenges because safety of lives and property are very important to our government”.

By Victor Oluwasegun, Abuja

The House of Representatives has called for investigation into the $396. 33 million allegedly spent in four years on Turn Around Maintenance (TAM) of the nation’s refineries.

It has therefore mandated the Committee on Petroleum Resources (Downstream) to conduct an investigative hearing on the processes of the “TAM at the Port-Harcourt, Warri and Kaduna refineries by the Nigerian National Petroleum Corporation (NNPC) between 2013 to date.

The House also  called on the Federal Government to consider divesting a “certain percentage of its shareholding in Port-Harcourt, Warri and Kaduna refineries to competent investors under transparent and fair bidding process.

The resolution was sequel to the passage of a motion by a member, Ifeanyi Momah, at plenary yesterday.

The lawmaker, while moving the motion said that “Nigeria has been living with the derogatory appellation of being a major oil producing nation that is heavily reliant on importation of refined petroleum products for its domestic consumption as a result of its low local refining capacity;

“Also we are aware that Nigeria has three major refineries situated at PortHarcourt, Watri and Kaduna, with installed capacity to refine 445,000 barrels of oil, enough for domestic consumption and export.”

Momah, noted that the objective has not been realised owing to a combination of factors, including corruption and inefficiency in the running of the refineries which regular “Turn Around Maintenances” have been mismanaged over the years.

He also noted “a report in This Day Newspaper of Friday October 18, 2019 by the Nigeria National Resource Charter (NNRC) on “Reducing Losses from Refineries Operations” which reviewed the operations of the Nigerian National Petroleum Corporation (NNPC) from a cost ‘perspective of efficiency and value for money;

He observed that the assertion by the NNRC in the report that the NNPC spent a whopping $396.33 million between 2013 and 2017 to carry out repair works under the TAM scheme on its three decrepit refineries at Port-Harcourt, Warri and Kaduna.

“Also observes the claim that the NNPC also spent N276.872 billion on operating expenses of the refineries between 2015 and 2018, as well as $36 billion on importation of petroleum products between 2013 and 2017.”

Momah said the three refineries contribute less than 10 per cent annually to Nigeria’s Gross Domestic Product (GDP) and they are also among the league of refineries with the highest operating costs worldwide, as their consolidated capacity utilisation, dropped to 6.1 percent at the end of September, 2017.

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He expressed concern that the strategic goal of establishing local retining facilities and its associated supply chain as a socio-economic game-changer that will result in national development has contmued to elude the country’s oil and gas industry.

“Further observes that going by the reckoning of the NNRC, the $36 billion the Country spent on importation of petroleum products in the last four years could have built four brand new refineries of similar capacity for the Country with the same 650,000 barrels per day processing capacity as the refinery that Dangote Group is currently building in Lagos State;

“Worried about the huge costs of undertaking the “Turn Around Maintenance” of the refineries, which, despite all the expenses, have remained comatose, leaving the Country dependent on importation of refined petroleum products for its domestic consumption at great expenses to the nation and national pride,” he said.

When the Deputy Speaker, Rep. Idris Wase, who presided, called for a voice vote on the motion,it was passed without dissent.

The Committee is to report back in eight (8) weeks for further legislative action.