New Hope for NITEL/MTEL Survival

25
49
Aminu Tambuwal, Speaker, House of Representatives

House of Representatives wants federal government to halt the proposed liquidation of Nigeria Telecommunications Limited and Mobile Telecommunications Limited

By Anayo Ezugwu  |  Nov. 25, 2013 @ 01:00 GMT

THERE are strong indications that the Nigeria Telecommunications Limited, NITEL and the Mobile Telecommunications Limited, MTEL, would be revived soon. The House of Representatives has directed the National Council on Privatisation, NCP, to compel the Bureau of Public Enterprises, BPE, to halt the proposed liquidation of the companies and consider revamping it through bailout.

The House passed a resolution recommending a bailout for the companies by the Central Bank of Nigeria, CBN, instead of commercialising or privatising the companies. The House took the decision based on a report presented by its committees on Privatisation and Commercialisation, Finance, Communications, Public Procurement and Information Technology.

The House approved a recommendation of the committees that instead of selling NITEL and MTEL, the CBN should give it a lifeline with the recommendation of the National Council on Privatisation, NCP, which is refundable in five years. “The National Council on Privatisation, should recommend to federal government to include NITEL and MTEL in CBN bailout intervention fund with a total sum equivalent to $1 billion to be refunded with interest over a period of five years,” the House resolved.

The House also recommended that the NCP should immediately direct the Bureau for Public Enterprises, BPE, to stop the on-going process of liquidation of NITEL and MTEL under the circumstances. Other recommendations are: “The NCP should direct NITEL and MTEL to commence the process of conducting technical and financial audit of the two companies as approved by the board; the NCP should direct its records office to eliminate the existing variance of over N170 billion under the supervision of the office of the auditor general of the federation.”

Besides, the House also recommended that: “The NCP should direct the BPE to comply with the Federal High Court judgements in favour of the 3000 ex-staff of NITEL and MTEL treated as casuals and the other one in favour of NITEL and MTEL pensioners. The House also directed that the NCP should consider Public Private Partnership, PPP, as a privatisation strategy of the companies and maintain the national carrier status for security reasons. It also directed that the federal government should direct the ministry of finance to comply with the agreement between NITEL and the ministries departments and agencies, MDAs, to deduct from source, the reconciled N6.2 billion and remit to NITEL for immediate settlement of outstanding staff salary arrears and other fringe benefits and the resuscitation of the company. The recommendation clearly stated that the benefits of NITEL workers be duly paid with the presidency’s intervention.

“The federal government should plead with the state governors to reconcile the N4 billion NITEL debts and pay accordingly. The federal government should direct the Nigerian Communications Commission, NCC, and the NITEL management to determine the fees due to the new regime from single to double tandem that was unfair to NITEL,” the report stated.

Also, the House recommended that the NCP should immediately direct the BPE to stop the on-going process of liquidation of NITEL and MTEL under the circumstances. “The NCP should consider the proposal for revamping the companies while the privatisation process as submitted by the ex-staff, consultants and others as an alternative to outright liquidation of NITEL and MTEL should be halted. The federal government should direct the NCC to include the present management of NITEL and MTEL in the National Broadband Implementation Roadmap. The NCP should direct the BPE and present management of NITEL/MTEL to include the MTEL Creditors’ Forum among those to be paid.”

According to Everest Amaefule, a telecom analyst, the attempts to privatise NITEL were marred by insincerity of purpose and manipulation of the process by government officials and private sector operators. According to him, while the federal government refused to make fresh investments in the company when the sector was witnessing massive fresh investments, Pentascope International was depleting the accounts of the telecommunications firm.

“At the end of Pentascope’s mission in Nigeria, NITEL was worse off which led to another round of privatisation circle in 2005,” he said. Amaefule regretted that even at the worst of times before the takeover by Transcorp, NITEL/MTEL had maintained a minimum of 15 per cent of the Nigerian telecom market while under Transcorp the market share of both companies dwindled to zero per cent.

Before the liberalisation of the telecom sector in Nigeria, which brought in new operators, NITEL had a monopoly of the industry and succeeded in penetrating most towns and cities in the country with investments worth millions of dollars. The value of these investments has continued to depreciate in different locations daily.

The first attempt to privatise NITEL was in 2001 when Investors International of London Limited, IILL, emerged the preferred bidder. IILL bid for $1.317 billion to acquire 51 per cent stake in NITEL and MTEL on November 28, 2001. It proceeded to pay a 10 per cent deposit of the bid sum amounting to $131.7 million to the Bureau for Public Enterprises, BPE. However, it could not complete the payment of the sum when it was due in February 2002. This prompted the federal government to forfeit the $131.7 million deposit.

In 2003, Pentascope, a Dutch firm, took over NITEL and the company generated N51.43 billion as revenue in one year from 555,055 connected lines. But 23 months after the takeover, the connected lines dropped to 440,000 and the firm incurred a debt of more than N40 billion. The federal government’s deal with Pentascope was later revoked.

In 2005, Orascom, an Egyptian telecoms giant, also failed to buy the company because its 257 million dollars bid was below the price of NITEL. The takeover of NITEL by Transscorp in 2006 was celebrated in the country but the excitement was short-lived after the 500 million-dollar deal failed to turn around the fortunes of the company. Also, the last attempt to sell the company to New Generation Telecommunication Consortium of China at the price of 2.5 billion dollars for 75 per cent stake in NITEL/MTEL was terminated due to failure of the Chinese consortium to pay the bid price.

Thereafter, every move to save the moribund company has failed. In February, 2012, the National Council on Privatisation approved a guided liquidation as the strategy for disposing the beleaguered telecommunication company and MTEL, but a claim by the Assets Management Company of Nigeria, AMCON, that NITEL was heavily indebted to some banks stalled the planned liquidation. AMCON claimed that NITEL/MTEL’s indebtedness to the banks amounted to N52 billion. The debts were part of the banks’ liabilities which AMCON had taken over and consequently laid claim to the assets of NITEL/MTEL. AMCON’s claim had thereby stalled the planned liquidation. As a result of AMCON’s claim, the NCP commissioned an audit of the assets and liabilities of the company to determine what could be sold and what could not be sold.

(Visited 129 times, 4 visits today)
Loading...

25 COMMENTS

  1. My dad is now crippled,can nigeria government tell me what they expect of us to survive,thank God for mummy,I will have been outside for alms,please make the payment fast and save a soul

  2. Oh God! What a cruel government… After my dad spent 36 years in service … Its been promises upon promises.. For their lifelong pension… Nothing has been heard… I just hope this new government does something good… I surely believe Buhari will surely do the right thing and save the Nitel pensioners… Jonathan is a failure..!

  3. My dad spent 35 years in service yet Nigerian Government is yet to pay their pension…..what a cruel act!!…..BUARI__in you I believe….DO save our soul

  4. The kind of wicked treatment being given to former Nitel staff is highly disheartening. Trust me, it could be counter-productive. Mind you, these former staff and pensioners have children who may be in a capacity to serve the nation in one way or the other in the future. Keeping in mind how their parents were treated after serving the nation diligently, do you think they would put in their best? Even if they put in their best, can you bet against their looting of public fund if they see the opportunity?bearing in mind that the government who failed to take care of their parents will not take care of them after their service as well? Boko haram is the fruit of unemployment. Only God knows what this seed will germinate into. God help Nigeria!

  5. is a pity ….my Dad works diligently for Nitel over close to 3 decades..yet he has nothin good to show for it….if not for Gods grace thank God he is still alive today cox many of his collegues i knew are lates now due to the fact of the fake promises d govt alwayz make to dem….i believe Pres Buhari is gona do something fast bout this ….coz d previous govt has bin a big failure to this concern….pls save a soul,a save a family & save the whole nation!

  6. is a pity ….my Dad works diligently for Nitel over close to 3 decades..yet he has nothin good to show for it….if not for Gods grace thank God he is still alive today cox many of his collegues i knew are lates now due to the fact of the fake promises d govt alwayz make to dem….i believe Pres Buhari is gona do something fast bout this ….coz d previous govt has bin a big failure to this concern….pls save a soul,a save a family & save the whole nation!!

  7. Jonathan ur are very mad, both u and ur entire family i pray u see this,president buhari me and our entire family have all voted for please let the payment be made (snappy), my dad who is 65years is still working as a security after serving nitel for 32 years,president please save us i know u are god sent to nigeria.

  8. Its unfortunate that jonathans administration paid deaf ears to the yernings of nitel workers. Pmb please help us by ensuring that all outstanding bill is paid,i wish u a sound health as u lead us to the promise land

  9. we continio pry to GOD wile svive us to god mijority up us are diad. because we are waitnig for our intaiteiment. p/s any member how has power on thatmater. help GOD will riwad him. we NITEL MTEL. GOD we are. infrot you for look svive

    p.x

  10. really the government are making the citizen poor. men will work for u, and when they need to enjoy their life at old age. that when the start struggling to survive with their families. living without pension.

  11. Pls I hereby tender my comment saying that nigeria is a failed country nd can neva rise again. We always say nigera has hope for tomorrow, lies there is no hope for tomorow because all their hope has been deprived of what is rightfully theirs. How can my dad work for the government for about 30yrs and the government keep promising them abt their pension? I tell you Nigeria is failed nd will neva rise again. I regret being a citizen of nigera. If nt dat God brought me into dis world true my parent in nigeria I would v cursed the land. Bt we look 4ward dat 1 day disaster sha happen to dis country nd will take all d bad heads in the government sectors. Trust me God is nt going 2 forgive dis government dat did dis 2 my father. Father let their generation suffer this great loss.

    AMEN

  12. This suffering is too much. why is nigeria government treating us this way, after serving d country 4 many years they left our parent in sorrow n sickness, no house to live no food, no good health we d children ar growing in great pain. We voted 4 change yet is still d same wat did we do to deserve these. Allah has power over all He is watching

  13. It’s really sad. The feeling of being deprived of what is actually yours is beyond pains. The president can’t do anything better than his predecessor. Our only hope is Jehovah almighty!!!

  14. My dad has worked for over 30yrs but since the liquidation or privatisation
    Of the company, the government kept promising to pay them there pension
    But till date not a word. My dad was among the best deputy managers / engineers from the north-east. Estimated pension to be paid to the ex-managers at his rank
    Was around N43m and above.

  15. My dad has worked for over 30yrs but since the liquidation or privatisation
    Of the company, the government kept promising to pay them their pension
    But till date not a word. My dad was among the best deputy managers / engineers from the north-east. Estimated pension to be paid to the ex-managers at his rank
    Was around N43m and above.

  16. my dad worked with nitel for 27years but has nothing to show. we, his children went through the eye of a needle to see ourselves through school. all thanks to our mum and church members who stood by us, but till now no job. I pray God will show us mercy and touch the hearts of those concerned so our entitlement can be paid. may God bless Nigeria and our leaders. and may God remove those that would want to sabotage the effort of the president to pay Nitel pensioners.

  17. Thank the Almighty ALLAH as the approval is made possible.We only have to pray harder for the Government to release the required Funds for the payment.The problem is not peculiar to only Nitel there are about 14 organizations involved,the only painful thing is the premature Sales of the organization which only require some Re Structure and Honest management.let us keep on Praying.

Comments are closed.