Threshold of a New Era

President Goodluck Jonathan takes his government’s power sector privatisation a notch higher by handing over share certificates to investors who have fully paid for generation and distribution companies

By Anayo Ezugwu  |  Oct. 14, 2013 @ 01:00 GMT

NIGERIA is a step away from the era of constant electricity supply. On Monday, September 30, the government made history with the handing over of share certificates to 13 investors who had earlier paid for the 14 electricity generation and distribution companies in the country.

President Goodluck Jonathan said during the ceremony that the federal government had capitalised the Nigerian Bulk Electricity Trading Company, NBET, to the tune of more than $750 million to ensure the successful operation of the companies by the private sector operators. Jonathan said with the scheduled handover of the electricity companies to the private sector operators, things would get better, adding that the nation had embarked on a new journey that would usher the citizens into a destination of enduring gain and fulfilment.

“Going forward, this administration is committed to providing all elements that are necessary for our private sector partners to succeed in providing Nigerians with uninterrupted power supply. To start with, the NBET, the off-taker, has been provided with a capitalisation of over $750m, positioning it to carry out its mandate without financial constraints. Various options are being explored to fund the Transmission Company of Nigeria so that it is able to implement the projects that are key to stabilising and expanding the transmission grid. Arrangements are also ongoing to ensure that the Nigerian Electricity Liability Company is adequately funded to assume all of the liabilities associated with the privatisation of the PHCN successor companies as well as other related liabilities,” President Jonathan said.

PHCN workers protesting
PHCN workers protesting

The President noted that the new owners of the generation companies were inheriting signed gas supply and transportation agreements, a new phenomenon in the gas-to-power industry, thereby moving the industry away from the prior status of best endeavour supply and transportation basis. He warned Nigerians not to expect a power sector revitalised overnight, but added that they should look forward to better times as they had with the liberalisation of the telecommunications and banking sectors.

The NBET or Bulk Trader was incorporated on July 29, 2010, to engage in the purchase and resale of electric power and ancillary services from independent power producers and from the PHCN successor generation companies. Thus, the company will purchase power produced by the generation companies and resell to the distribution companies, which have the responsibility to interface with the final consumers. The responsibility of the NBET is to assure the power produced by the power producers will be purchased and paid for without any delay; thus, the decision of the government to capitalise the organisation ahead of the takeoff of the private sector operation.

But the handover of the certificates to the investors was protested nationwide by electricity workers, under the aegis of the National Union of Electricity Employees, NUEE, and the Senior Staff Association of Electricity and Allied Companies, SSAEAC, who insisted that the government had not fully addressed all labour issues. The union also threatened to stop the supply of electricity across the country by October 2, if the federal government went ahead to handover the assets of the company to private investors without the conclusion of payment of workers’ entitlements.

Joe Ajaero, general secretary, NUEE, in a statement, directed its members to resist what he called “the forcible takeover of PHCN.” The union said it was particularly disturbed by the statement credited Namadi Sambo, vice-president and chairman, National Council on Privatisation, NCP, that government had settled all the labour issues which had impeded the smooth take-off of the privatisation programme and the handover to private investors. The union insisted that the vice-president was either being misled or deliberately keen on emasculating the PHCN workers with a view to further impoverishing them.

Chinedu Nebo, Minister of Power
Chinedu Nebo, Minister of Power

The statement read: “For clarity, please note that these issues are outstanding: payments of terminal benefits:  payment of the terminal benefits is yet to rise up to 50 per cent for the eligible workers. Non-payment of retirement savings fund to Pension Fund Administrators, PFAs, up till this moment no effort has been made to commence payment.  The PFAs can attest to this fact. Non-remittance of two percent of the union deductions as agreed.  No word has been heard from the BPE/government on remittance of this two percent neither has the deductions already made from the paid workers remitted to the unions.

“Non-payment of retirees who disengaged since 2011; it is absurd and sordid for government not to think of settling these people who laboured over the years in service of this country and get retired meritoriously, while the privatisation exercise was on; non-regularisation of some of the casuals already identified; with the biometrics done and concluded, it becomes worrisome on the continued delay in regularising the casuals who had been identified based on agreements already entered into; 10 percent equity shareholding by the workers; in line with the relevant laws, the workers are entitled to 10 percent equity share of the total sale of PHCN.  But it appears the government is bent on short changing the workers.

“The shortfall of terminal benefits from June 2012 till date has not been considered for payment. These contending issues cannot be jettisoned by the workers to allow any force to takeover. It behoves us therefore to advise the vice-president and those misguiding him not to toy with the socio-economic lives of PHCN workers, their families and other Nigerians who depend on them for their livelihood.  We are set to take our destiny in our hands.
“Because of Independence Day ceremonies, we would be patient to allow for full celebrations. However, we hereby urge Nigerians to bear with us if after October 2, the government goes ahead with its illicit handover to the investors and forceful takeover. The implication would be that the workers have technically been asked to withdraw their services and we may not be able to guarantee smooth operations. Consequently, if after October 2, the office of the Vice-President fails to correct this misleading information, we shall not guarantee supply of electricity in the country. This is not a threat as our earlier ultimatum has expired.”

Meanwhile, Godknows Igali, permanent secretary, ministry of power, had, on September 27, explained that the delay in payment of the entitlements of disengaged staff was to ensure that no mistakes were made. Igali said the delay notwithstanding, remarkable progress has been achieved in privatising the PHCN. According to him, all issues relating to labour and others would be resolved before the handover and takeover.

“There is progress in the handing over of the 10 distribution companies and four generation companies. We are in the last stages. A formal ceremony will take place to handover the documents to the new owners. There will be no physical handover until the end of this year. We are starting with handing over of the documents, the protocol ceremony for Mr. President to preside over after which, we have one month to undertake cropping issues, for example labour. We are making very good progress to ensure that all workers are paid. When you are dealing with paying accounts of workers, about 40,000 people, you have to be careful because it is not something you rush into”, he said.

Contact Us