No Full Payment, No Takeover

Chinedu Nebo

PHCN workers’s Union vows to resist takeover of successor distribution companies by bidders who have not completed their bid payments and severance package

By Maureen Chigbo  |  Apr. 22, 2013 @ 01:00 GMT

DESPITE the euphoria following the payment of 25 percent of the total bid price of the of the successor distribution companies carved out of Power Holding Company of Nigeria, PHCN, the workers’ union is threatening to prevent the successful bidders  from taking over. The workers are insisting that they would not allow the new owners to take over until they have completed the total payment and that of their severance package.

Joe Ajaero
Joe Ajaero

Joe Ajaero, general secretary, National Union of Electricity Employees, said the directive to union members to prevent the take-over of successor companies was not an empty threat. Ajaero said: “No investor can just pay 25 percent and move into the company. We will not allow it. What happens to the workers? Who will pay them? The electricity workers must get their money in full, otherwise, there will be no takeover”

The action of the workers, though pre-emptive, is in tandem with the position of the Bureau of Public Enterprises, BPE. Chigbo Anichebe, spokesman of the BPE, told Realnews on telephone that the BPE will continue to work with the union. “Their objective is our objective. The welfare ot the workers is our objective. We will work to ensure that the union gets what is due to their members,” he said, adding that the successful bidders can only take possession of the distribution companies when they have fully paid for them.

The PHCN staff had been insisting that they should be paid their severance packages including their pension contributions which they claimed was N88 billion generated from 25 percent pension contribution in their pension account as at June 30, 2004.

The staff of the PHCN had been at daggers drawn with the federal government over pension issues. The staff, some of which will be affected by the privatisation of the PHCN, are insisting that the federal government pay them their 25 percent pension entitlements as against the 15 percent provided in the Pension Reforms Act of 2004.  The Pension Act provides for a contributory pension scheme of 7.5 percent from the staff while the federal government also contributes 7.5 percent to effect the pension payment. This is why the federal government is saying that the PHCN staff is entitled to 15 percent payment as pension payoff.

But the PHCN staff said that they have been operating the old system of 25 percent. According to the staff represented by their three unions in the power sector – the national Union of Electricity Employees, NUEE, Senior Staff Association of Electricity and Allied Companies. SSAEC, and National Union of Pensioners, NUP, they have N88 billion in the pension account as at June 30, 2004, when the old scheme ceased to operate.

Barth Nnaji
Barth Nnaji

However, the federal government, through Barth Nnaji, former minister of power, said contrary to the claims of the staff, what was available in the account administered by the union leaders and the PHCN management was a mere N3 billion. As at then, the federal government said that the PHCN was yet to comply with the Pension Reform Act, eight years after it came into existence, by setting aside 7.5 percent of each worker’s salary every month and with the government providing another 7.5 percent towards the mandatory contributory pension scheme.

In spite of these severe lapses, “the ministry of power said “president Goodluck Jonathan has graciously acceded to Nnaji’s request that the government pay the huge shortfall of N85 billion in the pension funds as at June 30, 2004, in addition to the provision of 15 percent of the salary of each of the 50,000 PHCN employees since July 1, 2004”

These concessions have been made purely in the interest of peace and on compassionate grounds, the ministry said, adding that “it is not conceivable for the government to continue with the PHCN staff pension scheme which obtained till 2004 when it became superceded by the Pension Reform Act.”

3 thoughts on “No Full Payment, No Takeover

  1. If the Federal Government that own PHCN could accept to pay huge N85billion on PHCN workers Pension for peace to reign, why can’t the same Federal Government that own Mainstreet Bank through AMCON see to it that that the Severance (Redundancy) Entitlements of the staff of Mainstreet Bank whose services were withdrawn by the Bank is paid. Afterall how much is the Redundancy Entitlements of about 1000 bank staff? Does it mean that the FG do not want peace to reign in Mainstreet Bank? What is good for the goose is also good for the gander.

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