Not Ready for Privatisation

Sat, Dec 22, 2012

By publisher

5 MIN READ

After nine years of preparation, the Nigeria Coal Corporation is still not ready for privatisation

|  By Anayo Ezugwu  |  Dec. 31, 2012 @ 01:00 GMT

NINE years after it was prepared for privatisation the Nigeria Coal Corporation Enugu, is still a ghost of itself. When Realnews visited the headquarters of the company in Enugu, the premises was overgrown with grass. A member of the staff who gave his name as Frank and the survey manager of the Nigeria Coal Corporation, NCC, said only their managing director, who had travelled outside the state, is allowed to disclose any information to the press. But he explained that the federal government had directed the corporation to shut down the mines and change its operations to pave way for privatisation. He said that for now everything about coal would have to wait until whenever the federal government concludes the re-assessment of the value of coal with its assets and liabilities before it could be privatised. Thereafter, activities will resume in coal mining.

Realnews also gathered that the workforce of the corporation, which used to be over 1,000, has been reduced to about 60. The workers are mandated to look after the coal industry until the end of the privatisation exercise.

Meanwhile, the Bureau of Public Enterprise, BPE, is said to be re-assessing the value of coal with its assets and liabilities in order to determine the minimum market price of the corporation.

Eugene Odo, speaker of Enugu State House of Assembly in a chat with Realnews, said one of the most important motions the House had passed was the motion seeking to cancel the sale of the Coal Corporation. “We looked at the privatisation of Coal Corporation and found out that there are a lot of anomalies in the whole process, and what we are wondering is whether the machines or the moveable properties of the company had already been sold,” he said.

He said he had never seen a place anywhere in the country where mineral resources were privatised. “I mean, the question now remains: How could one have assessed the level of coal under the soil to know what is being privatised?” he asked. Already, he remarked, most of the coal in Onyeama Mine and the other Mines in Enugu, were contracted to one Indian firm by way of privatisation. Now, if such a company comes in, the whole thing is to make money, and there is no excavation limit. If you say that you privatise coal in Enugu, that means you sold Enugu because there is no excavation limit; We know the dangers of excavation where coal, as a mineral resource, is being exploited.

According to Odo, the coal should not be privatised. It should be left in the hands of government for the benefit of the people. The crisis in Niger Delta today is because they have oil, and there was equally high tension which would have erupted into a crisis when there was a rumour that one of the refineries was going to be privatised and which eventually, was later privatised. Here, we are talking of a refinery, let alone, saying that the oil in Niger Delta has been privatised. It does not make sense. So, we are strongly opposed to the sale of Nigeria Coal Corporation, and the contraction of a foreign firm to exploit mineral resource. 

He said ordinarily, coal is meant for the people of the South East and Enugu State in particular. “The situation as it is now is that we have written to the Minister of Solid Minerals, the Bureau for Public Enterprises, the Presidency, the National Assembly without getting any response yet. But we believe that no meaningful progress will be made to give effect to the privatisation without sorting out the criteria for the sale of coal and all the necessary things that an average person in Enugu State will like to know about coal. It should be public knowledge. They should be aware of what the BPE is doing; they should be aware of the criteria for the sale; they should be aware of what will be sold; they should be aware of how they were able to quantify the coal under the soil and how the evaluation was carried out before privatisation. Without that, I don’t think it will be possible for anybody to come here and do anything.”

The NCC lost its monopoly over the Nigerian coal industry in 2001, following the resolve of Olusegun Obasanjo, former president, to allow private companies to begin operating coal fields in joint ventures with the NCC, with the goal of completely selling off the corporation’s assets to private investors.

In 2003, the government announced plans to create a technical advisory committee that would be tasked with reviving the industry. By 2004, the technical committee had still not issued its report, when the NCC found itself almost bankrupt. To raise funds, it began to sell off some of its assets in an attempt to pay off its mounting debts, including salaries that were owed to its employees.

Coal, which was very vital to the economy of the nation in the sixties and seventies, lost its relevance when the Oji River power station stopped  supplying  electricity to the entire former eastern region. It was coal that powered the locomotive railway, as well as the first Nigeria Cement Company, NIGER-CEM in Nkalagu. The fortunes of the NCC nose-dived when enterprises found alternative means of running their organisations.