With the successful handover of its successor companies to their new owners, the federal government put final nail on the coffin of what used to be known as NEPA and later as PHCN
| By Anayo Ezugwu | Nov. 18, 2013 @ 01:00 GMT
Power Holding Company of Nigeria, PHCN, is now in the dustbin of history. Its funeral rites were performed on Friday, November I, when the federal government handed over the 15 successor companies to core investors thereby completing the privatisation process. At the official hand-over ceremony in Abuja, Namadi Sambo, vice-president, said the event was taking place simultaneously at the headquarters of the state capitals across the country.
“It needs to be reinstated that the electricity power reform programme became imperative in order to improve efficiency, reduce losses and cost. No doubt, this reform will lead to increased access to electricity, engender private sector investment, improve infrastructure, and create employment for the growing population,” he said.
The vice president, who is also chairman of the National Council on Privatisation, NCP, said the privatisation journey which started in 1999 with the inauguration of the Electric Power Implementation Committee, EPIC, had successfully come to an end. He was full of confidence that private sector participation would bring higher generation capacities. “This will be made possible through the provision of more efficient and cost effective power stations and improvements in electric power distribution in areas of billing, collection and transmission networks,” he said.
He explained that the handover was borne out of 14 years of painstaking efforts by the NCP and the Bureau of Public Enterprises, BPE. He noted that the opening of the industry to private hands would create job opportunities, improve efficiency and also engender private sector investment, among others. He said that the challenges facing the sector were enormous as well as its benefits, noting that government would create an enabling environment that would suit the investors.
Chinedu Nebo, minister of power, said the assets were the property of five Generation Companies, GENCOs and 11 Distribution Companies, DISCOs. He noted that the successful handover was made possible by President Goodluck Jonathan’s commitment to ensure provision of stable power to the people. In that regard, he said that the government had paid N360 billion to the workers of the unbundled PHCN. Nebo acknowledged that though there might be some teething issues such as an increase in electricity tariff as soon as the new power owners commenced operations in earnest, he said the problems would soon disappear with time. “Distinguished ladies and gentlemen, PHCN has essentially ceased to exist. We now have electricity distribution, generating and transmission companies. So, it is no longer PHCN. For instance, this one is Abuja Electricity Distribution Company and is owned by Kann Consortium. So, they are no longer PHCN and it is no longer business as usual, but business unusual because people are expected to deliver,” he said.
He disclosed that the federal government and the two key workers’ union leaders in the power sector had reached an amicable agreement on the peaceful handover of the power firms to their new owners. The unions, according to him, are the Senior Staff Association of Electricity and Allied Companies and the National Union of Electricity Employees. “Agreements have been reached. Please never in the history of this country has a government kept its word in issues like this as has been demonstrated by the present administration. Already, N360bn has been paid out. The remaining N30 billion or so is in the pipeline and all the issues of certification, biometric capture and making sure that clearance is done are being completed. Government is on it and the date has been fixed for some as November 15, while November 30 is for others. I have given my word and I am saying that no worker will be short-changed,” Nebo said.
According to him, the privatised GENCOs are Geregu Power Plc, Ughelli Power Plc, Egbin Power Plc, Kainji Hydro Electric Plc and Shiroro Hydro Electric Power Plc. The 10 privatised DISCOs are located in Abuja, Benin, Eko, Ibadan, Ikeja, Jos, Kano, Port-Harcourt, Yola and Enugu. The embattled Enugu Electricity Distribution Company was among the distribution companies handed over to Interstate Electrics Limited, the new investor.
Meanwhile, the privatisation programme has been bedevilled by labour related issues. Power sector workers had vowed to cripple the exercise if their severance benefits were not taken care of before the companies were eventually transferred to their new owners. As a result, there had been pockets of protests by workers to compel government to accede to their demands.
However, the federal government which was determined to create a hitch free transition had said it had set aside the entire proceed of N384 billion from the sale of power assets to settle labour liabilities. A total of $3 billion is expected from the proceeds. At the last count, the BPE said it had despatched a team of consultants and its staff for the biometric data capture of 1, 478 employees of the Enugu Distribution Company who could not be audited because of virus attack on the system where their names were stored.
Before the final takeover, President Goodluck Jonathan, on September 30, formally handed over share certificates and licences to 14 new core owners of the PHCN successor companies. Jonathan praised Nigerians for exercising great patience and confidence “putting up often with darkness, noisy power generating sets, related pollution and daily disruption in their lives” and assured them of better days ahead.
Ordinarily, the formal transfer of assets should have allowed the new investors immediate access to the power utilities but Nebo, said that could only be possible when the remaining PHCN workers would have been paid their entitlements within October in order to have a smooth and peaceful transition.
Although President Jonathan has admitted there had been a number of limitations with actual service delivery, he noted that there had been remarkable progress with steady and sustained increase in national power generating capacity. He promised Nigerians that “things can only get better, from this point onwards.” The president further said while the power sector could not be revitalised overnight, measures were being carefully worked out to address all other issues particularly the resolution of labour-related concerns.
“In partnership with the labour unions, we have been able to come up with an outcome that is beneficial for all stakeholders, the payment of all labour-related benefits commenced earlier in August this year, and is almost concluded as a condition precedent to today’s event. We can all look forward to a better time very soon as we have seen in the telecommunication and banking sectors. I am confident that the power sector will promise no less, knowing the calibre of those who are taking over.”