OVER N16M IS SPENT MONTHLY RUNNING DIESEL IN ESTATE - STEPHEN JAGUN

Mr Stephen Jagun, principal partner at Jagun Associates, in this interview with EHIME ALEX, shares his thoughts on the effect diesel-scarcity is having on facility management.

What effect is the diesel hike having on facility management?

Diesel price has gone beyond the plans we ever prepared for. The price has gone over the roof! In 2021, diesel was still about N280 which we thought then was outrageous. Last January, in one of the places I was called to intervene in their budget defence for service charge, I was advising them to budget diesel purchase at N500 per litre but they screamed. They [the estate] use about 33,000 litres of diesel per month. So, if you do the mathematics, you will see that the figure is huge [that is N16.5m]. We eventually agreed for N450 per litre.

By the end of last year, price was almost N800 per litre, which almost doubled the budget and definitely doubled what was spent in the year before.

Looking at alternative sources, what do you suggest?

In bringing out the best in facility management, we try to network and to look for alternative sources that could reduce cost.

In the short run the options could be, do we shut down appliances that

consume much current, use smaller generators or try to balance electricity load?

I was at a bank at Awolowo Road in Ikoyi; I got there by 3.05pm but was told the bank had closed. Banks now close by 3.00pm to cut down on cost, reducing the hours they open to the public but continuing with some internal works while relying on inverters, solar energy or any alternative source of energy. That way, they can shut down the airconditioners and other appliances which ordinarily they would not if customers are in the banking hall. All is on the effect on the cost of energy.

On the short to medium run, efforts can be made to change electrical bulbs to LED or energy saving bulbs. When purchasing electrical appliances, you buy those low on energy consumption; use of inverter fridge, inverter air conditioners, inverter freezers etc. These can be done at once or in phases.

In the long run, do we need to go for sustainable power, run on solar or discuss premium power supply from DISCO with our neighbours? There are some residential estates where they have guaranteed power supply for 20 hours because they had agreed with the Power Holding Company of Nigeria that they will pay their bills – just give us Mains power; which is cheaper.

By the time you add the cost of diesel, maintaining of generating sets, replacing of spare parts and others, you will see that it is far cheaper to deliver power [by PHCN] than generating it by yourself.

What if the price of diesel keeps rising excessively ?

Facility Managers should keep innovating and try to benchmark with the world's best practices.

In advanced countries, people pay for what they can consume. In America, London, etc, people do not joke with electricity or waste it. Here, people can put on their lights, television sets and go to the market without anybody watching. That surreptitiously raises the bills they pay!

If we have five air-conditioners in the house, do we allow all to be working at the same time? No! After the peak period, do we need to shut down power? Same in our offices. Somebody is on the 8th floor and needs to come down to the 7th floor, does she need to jump on the lift? All these raise costs.

How do you think facility Managers should deal with unbudgeted costs?

What the facility managers must do is to communicate. Communication brings about transparency. We budgeted at N450, but this thing has risen to N800, that is a fact that can be verified. At that time Tenants could be querying what they are using against what they were using before.

They suddenly get interested in their bills. A professional Facility Manager will discuss with them on how to reduce their consumption or cost.