The Nation Newspaper

Category: Issues

  • Salary disparity threatens workers in health sector

    Salary disparity threatens workers in health sector

    The health sector has been in the news for some time. But this time, it is about the disagreement between medical doctors and other health workers. The bone of contention is the demand by registered unions for the scrapping of the Consolidated Health Sector Salary Structure (CONHESS), which gives more cash to medical doctors than other workers in the sector. Medical doctors say the workers’demand is an invitation to anarchy, writes DUPE OLAOYE-OSINKOLU

     

    TROUBLE is brewing as paramedics are up in arms against the medical doctors, who they say, are being over-pampered by the government.

    Medical doctors on their part said unions of other health workers are inviting anarchy by seeking parity in salary with them. The other health workers on the other hand, are asking the government to stop paying the doctors Consolidated Health Sector Salary Structure (CONHESS). CONHESS gives medical doctors salaries that are much fatter than other professionals in the sector. Doctors however, disagreed with the demand, saying should the Government grant the request; they (doctors) would go on strike. But the paramedics said that doctors have been in control of the sector for too long and are carrying themselves as the lord of the sector, despising other health workers. The medical doctors said that they strive not just to be experts but consultants in their various fields, noting that paramedics parade themselves as if they (paramedics) can perform the roles of doctors.

    The battle line is therefore drawn between the pharmacists, nurses, laboratory scientists, other hospital workers on one side, and medical doctors on the other.

    The Joint Health Sector Unions (JOHESU), a united platform of five registered Trade Unions with legal backing to represent the interest of workers in the health industry is making efforts to ensuring that they achieve some landmark in the area of salary structure of health workers, by bridging the gap in the allowances of other health professionals and the doctors.

    JOHESU members include Non-Academic Staff Union of Educational and Associated Institutions (NASU), Medical and Health Workers’ Union of Nigeria, National Association of Nigeria Nurses and Midwives, Senior Staff Association of Universities Teaching Hospitals, Research Institutes and Associated Institutions and the Nigeria Union of Pharmacists, Medical Technologists and Professions Allied to Medicine.

    All the unions believe they have an axe to grind with the Nigeria Medical Association (NMA), the umbrella body of medical doctors, which is the reason they came together to form a formidable body.

    The General Secretary of NASU, Comrade Peters Adeyemi said there is an inbuilt arrogance about doctors because they are being over-pampered by the government. He noted that no worker in the health sector can be regarded as least important since a doctor cannot do their jobs.

    “Right from the gate of the hospital, we have workers, whose duty the doctors cannot do, even issuing of cards, because no doctor can see a patient without a card. They can’t attend to patients on their own; they need nurses to administer drugs. Even the idea of only the doctors being made minister of health has to change. There are more qualified paramedics who can hold the position. They have arrogated so much authority to themselves, as if they can achieve anything without the contribution of other health workers. They always believe they are the only ones who are useful in the health sector,” he said.

    But the President of the Nigeria Medical Association (NMA), Dr Osahon Enabulele said doctors were not fighting the health workers, and that they (health workers) are the ones fighting doctors. He said that all the agenda of JOHESU was aimed at undermining the authority of the doctors.

    He said the problem in the sector was caused by the “perpetual greed of health workers to equate themselves with the doctors.”

    But the health workers are asking for the reconstitution of the boards of University Teaching Hospitals and other parastatals under the Ministry of Health with equitable representation by union and professional association.

     

    JOHESU’S Agitation

     

    In a statement signed by the Chairman and Secretary of JOHESU, Ayuba Wabba and George Ayua, JOHESU, the group said the NMA should “concentrate on its professional matters rather than dabbling into matters it is ignorant of.”

    The NMA President on his part said JOHESU’s agitation seeking equation with doctors will lead to anarchy. “We are saying everybody should be asking for what is realisable, the agitation must be based on anything besides an invitation to anarchy,” he stated.

    Mr Wabba said there is hierarchy in the health profession, and wondered why a laboratory scientist should be bent on being like a doctor. “They want to be consultants in the hospitals,” he said.

    He said if the government wants to concede to health workers demands,it also has to concede to so many other things, such as chief consultant and senior consultant that are no more in the structure. All these he said have to be restored.

    On the agitation for CONHESS, Enabulele said he started the battle for Consolidated Health Sector Salary Structure (CONHESS) as a way of stopping regular migration of doctors to other countries to seek greener pastures. “I introduced the concept of specialists’ allowance. You have to be appointed as a consultant to earn the specialist allowance. They also want it. They want to take final decision on patients. They can do anything elsewhere, but in the hospital setting, consultants are in charge. If there is a case of negligence, nobody thinks of nurses, they look for doctors.

    Earlier, this year, there was a strike called by health workers at the Federal Medical Centre, Abeokuta over alleged superiority tussle between nurses and doctors. The action grounded the hospital for about five days.

    A doctor allegedly slapped an assistant nursing officer in the heat of an argument, and failure of the hospital management to react when the matter was reported made the nurses association embark on strike. At a point, the loggerhead manifested when the issue of the health bill came up for assent. The health workers said President Jonathan should not sign it as it was, while the doctors urged Mr President to sign it.

     

    Contentious Bill

     

    The contentious provisions in the Health Bill according to the health workers include, National health system and regulation of health services; headship of the tertiary hospitals commission and the federal capital territory primary healthcare board. Others include status of the Armed Forces medical corps and membership of the National Council on Health; provision of essential drugs in primary care services; and developing primary care facilities in Nigeria. Also, establishment, composition, functions and tenure of national health research ethics committee; research of experimentation with human subjects; removal of tissue, blood products from living persons; removal, use or transplantation of tissue and administering of blood and blood products by medical practitioner or dentist. But medical doctors said that it was better for the bill to be assented to first by Mr President and amended later.

    The doctors said the health bill was the boldest step any government had taken in the last 10 years to address the challenges facing the healthcare delivery system in Nigeria, noting that those opposed to the bill are ignorant of the potential for transformation therein should the bill be faithfully implemented.

    The current agitation of the health workers include, non-skipping of Salary CONHESS 10 now before the National Industrial Court for adjudication, National Health Bill, Consultancy and Specialist Allowance, Call/Shift duty and other Professional Allowances, Presidential Committee Report on Harmony in the Health Sector namely: Promotion of Health Professionals from CONHESS 14-15, Request for implementation of 2008 Job Evaluation Committee Report, Need to review the retirement age, Re-constitution of Boards of management dissolved since September, 2011 and increase in retirement age from 60 to 65 years.

    Baring intervention by older health professionals and other stakeholders, this brewing enmity might assume an unhealthy crescendo in which professionals would be exchanging blows.

    Optometrist’s grouse

    Other areas of the health sector where grudges are being nursed against the medical doctors is the eye care. The optometrists are complaining bitterly that the government only recognises the ophthalmologists, even though they only perform eye surgery in cases of glaucoma or cataract, while other eye ailments are being taken care of by optometrists.

    Dr Tony Chiwike of Optic Ideal Eye Clinic, Lagos, said, other areas of health care professions is being neglected by the government.

    “ In the eye care profession, we have the optometrists, which is the first point of contact for any eye problem. Then we have the ophthalmologist, which is like a tertiary form for those who require surgery. The situation now is that the government only recognises the ophthalmologists, while the optometrists are being relegated to the background.

    “In some other advanced countries such as in the United States, and in Britain, all these professions have their distinct places. The ophthalmologists have their own functions, while the optometrists have their own duties. Any patient that has an eye problem comes to the optometrist, who attends to him or her, but if he or she needs a referral, maybe due to eye conditions like glaucoma or cataract, the optometrists refers such cases to ophthalmologists. If the patient needs eye glasses after the surgery, then the patient has to be referred back to optimist.

    “However in this country, ophthalmologists want to take care of everything concerning eye care. It is not done that way in other countries.”

    Chiwike added that Ophthalmologists have sent a proposal to the government on the issue to enlighten people on who to go to when they have eye problems and also to warn professionals not to encroach on other people’s duties. He blamed the government for not doing enough for optometrists in terms of recognition. He said only the medical doctors are being recognised, while other health professionals are not being accorded their rightful place. If they are accorded their rightful place, they would do more.

    Baring strong intervention by health professionals of old and other stakeholders, this brewing enmity might assume an unhealthy crescendo in which professionals would be exchanging blows, if these issues are not resolved.

  • Path to agric revolution

    Path to agric revolution

    For some years, the growth of the agricultural sector has been stunted by paucity of funds, crude implements, lack of government support and land tenure system. These have triggered food insecurity. But the Lagos State government is set to reverse the trend by boosting farming and food production through the building of farm estates and settlements across the state. DANIEL ESSIET reports.

     

    The agricultural sector plays an important role in Lagos State’s economic development. The sector does not just provide rural employment and uplift rural incomes, it also ensures food security. But food supplies to the state is short of what is required.

    The Commissioner for Agriculture and Cooperatives, Prince Gbolahan Lawal, said aggregate food supplied internally was less than 10 per cent of total consumption. In addition, national demand for agricultural produce is expanding rapidly and there are many niches the state can exploit, given its natural advantages. Lawal said the state was poised to raise the bar to 25 per cent in the next five years through its various projects.

    To this end, the state has intensified farming activities in areas where it has comparative, ecological and socio-economic advantages. These areas, he stated, include fisheries, livestock, vegetable production, as well as agro-processing, with emphasis on rice and cassava. He said marketing and the whole value chain would also be given attention. Thus, the state is pursuing the strategy of building farm estates and settlements across major farming communities, he said.

    Through the estates, the government envisions a transformation from fragmented and small-scale farms to integrated, clustered and large-scale agri-businesses. Key agricultural commodities covered under the farm scheme are: rice, vegetable, poultry, piggery and aquaculture.

    By using farm estates, Lawal said the state was moving towards a model which is not only inclusive but anchored on market-centricity, economies of scale and value chain integration of the various factors involved in the production of the commodities.

    He said farmers using the estates would benefit from extension services and inputs, such as seedlings, fertilisers and pesticides, adding that the government was making efforts to develop critical infrastructure, such as roads in aquaculture zones. This is to support the private sector’s investment in operating infrastructure, such as processing plants, grow-out farms and hatcheries, he noted.

    He observed that the absence of farm-to-market chains was the primary obstacle inhibiting agri-business takeoff. For this reason, he said the government was working to allow farm-to-market chains to operate efficiently.

     

    Agriculture Youth Empowerment Scheme (AGRIC-YES) Estate

     

    The Agriculture Youth Empowerment Scheme is at Araga Farm Settlement in Epe Local Government Area. Through the scheme, the state is attracting young men to farming. One hundred youths were drawn and housed within the estate. They were trained for 18 months in crops and live stock production.

    Dormitories are available for new intakes while the programme offers resources, hands-on training, and technical assistance on sustainable practices. These include production, processing, business principles, and marketing of farm-raised products, such as rams, chickens and vegetables.

    During their training, the young farmers raise rams, poultry, fish and vegetables. Farmer-trainees are expected to operate independently after the 18 months of training.

    Also, the programme is training the students to: produce building materials for green houses, improve soil fertility, develop irrigation, manage pests/weeds and promote marketing. As a result, Lagosians can now access hot and sweet pepper and pumpkin green.

    The reason for adopting the strategy, Lawal explained, was to reduce dependency on the government for employment, create and sustain new jobs and reduce frustration among young people. With the average age of farmers increasing and the sector facing skills shortage, he said it was important for the industry to attract and retain young people.

    Lawal said the programme has completed two cycles of training, internship and settlement with 100 youths each during the review period. He said the first batch of youths that graduated in December 2010, are about to settle in newly-built 100-unit two-bedroom flats at the farm settlement fashioned after the Israeli-type – Kibbutz.

    They trainees will be empowered with loans to establish their farms, payable within five years. The products from the scheme include over 1,500 crates of eggs daily, 32,000 broilers monthly, 18 tonnes of fresh fish per cycle and about 160 tonnes of cabbage, water melon, cucumber, pepper and assorted leafy vegetable which being marketed in the state.

    The settlement, Lawal said, is a highly diversified system.

    The Head of Training and Course Officer, Vegetables, Agric-Yes Training Institute, Mr Anjolaiya Hakeem, said the aim of the scheme was to breed a new generation of agro-entrepreneurs in poultry, fish farming, bee-keeping and an-all season vegetable farming cycle.

    “Since this programme started in 2009, we have trained about 300 youths and we are in the fourth batch. We train them in poultry farming, crop farming, fish farming, meat production and so on. We get our students through advertisements in the media. After that, we conduct a test for them, we usually take 36 females and 64 males for each batch, makin 100 students for a session,” he said.

    He said after the training, the participants are divided into co-operatives and each group would be given N100 million to execute its agricultural venture.

    “Apart from the N100 million, the participants are also given accommodation where they can live with their families.We also have a fully automated layer pen. We can’t even meet the demand of the market now,” he said, adding that at the estate, there is a hatchery where hens lay eggs. The eggs are collected and incubated until they begin to hatch in about 20 days. The chicks live in large grow-out houses.”

    A lady trainee and leader of G2 group under the programme, Miss Esther Akintelu, sees her future in agriculture. She made the switch in career after graduating with a degree in Public Administration. She is keen on developing her skills, knowledge and experience to advance her career in the industry.

    Oladuran Oloude, leader of G1, is a graduate of Civil Engineering. Growing up on a farm settlement gave him an understanding of the business administration side of agric enterprise, as well as the daily demands of the businesses. He and his colleagues are learning vegetable production, using plasticulture plots under the green house.

    One of the resident instructors, Mr Vascular Olusola, said the young farmers need to have the mindset of entrepreneurs to succeed and enjoy farming and the independence that comes with it.

    Mr Johnson Oluwashola, the Project Officer, Ram Ranch, said the institute has about 1,500 rams. He said the rams were brought in when they were five months old, adding that though they were not involved in the breeding of the rams, the institute would soon embark on breeding at the ranch. Johnson said the success recorded at the farm was due to the state government’s investment in agriculture to create jobs and enhance food security.

     

    Ikorodu Fish Farm Estate

     

    Established on a 34-hectare parcel of land at Odogunyan, Ikorodu, the estate is producing an average of 10,000 tonnes of fresh fish per annum. A technology demonstration centre, comprising 50,000 juvenile/cycle fish hatchery and 300- kilogramme fish capacity, a processing unit has been built.

    A fish farmer in the estate, Mrs Bolaji Dania, said the government has helped farmers a lot by assisting them with feeds, adding that the government provided the needed information to farmers on how to improve their farms.

    Mrs Dania said: “I am proud of the government, because it has made things easy for farmers like us. Being on this estate to farm, has helped me in getting access to information from the government.Government also subsidises some of the products for us and I was even opportuned to get a loan from the World Bank through the assistance of the government.

    “I started fish farming with three ponds on one plot five years ago, now I have 18 ponds on three plots of land. People come with big trucks to buy fish and we sell them as fingerlings. We really need more people to go into fish farming in Lagos State because we can’t satisfy those that come to buy. Sometimes, they buy seven to eight thousand tonnes and we can’t meet that demand here.”

     

    Ketu-Ereyun fish farm estate

     

    Another initiative of the government is the proposed Ketu-Ereyun Fish Farm Estate. It will be sited on a 60-hectare land on the Itoikin-Epe Road. This was conceptualised as a follow-up to the Ikorodu Fish Farm Estate. In the same manner, it has been divided into 482 plots for allocation to interested and qualified members of the public. Like the Ikorodu Fish Farm, the Ketu-Ereyun Fish Farm also has capacity for 10,000 tonnes but with additional supporting facilities like hatcheries, processing and marketing centres.The estate is expected to produce about 4.685 million tonnes of fresh fish annually when fully established.

     

    Rice-for-job farm Settlement

     

    Rice-for-Job is located on about 200 hectares of land in Itoikin, Epe and Ikoga in Badagry. The settlement has a modern rice processing and milling centre at Imota. The programme was launched in 2008 to create jobs for the unemployed; strengthen local capacity for rice production; achieve a production target of 1,600 tonnes of paddy per annum and facilitate access to rice processing equipment.

    The programme has positively impacted 180 farmers within the last three years. The farmers produced about 180 tonness of rice, which re still far off from the consumption target of 540,000 tonnes per annum for Lagos alone.

    The officer in charge of the programme in the Ministry of Agriculture and Cooperatives, Mr Akinola Oyebola, said the programme has created remunerative economic opportunities for young people in agriculture and built the skills they need to take advantage of these opportunities. He said the programme has given them the skills and confidence to run profitable farms or start businesses which would make upstanding citizens and community leaders of tomorrow.

    One of the beneficiaries of the project, Mr Adeniyi Ayino, said the programme has helped him a lot, adding that now he could operate a tractor very well and work perfectly as a rice farmer. “It is an interesting programme, it is a good opportunity for youths today and because we want to participate in the solution in ensuring food security in Lagos state that is why some of us go into agriculture,” he said.

     

    Imota rice processing Mill

     

    The establishment of this plant has created the first integrated rice company in Nigeria and enabled farmers to share in the value captured in the downstream segment. The company will guarantee a minimum income to farmers. Shedding more light on the rice mill, a consultant to the Lagos State government on rice project, Dr Oluwarotimi Fashola, said the mill was built with Korean technology to the highest operational standards to process 20,000 tonnes of paddy rice per annum. Operating optimally, the rice mill is estimated to produce between 350,000 and 400,000 bags of rice yearly, he said.

    The primary goal of the project, he said, is to reduce dependence on imported rice and also create jobs and wealth for the people. The mill processes 2.5 tonnes of paddy rice which consist of huller, de-stoner polisher, grader, colour sorter and automated bagging and weighing bridge, per hour.

    The following are inclusive in the package: 10-tonne soaking tank, a set of per-boiler and steamer, 15- tonne capacity drier and 60-tonne silo attached to the factory. The factory was built with two other structure for paddy rice storage of 10,000 tonnes capacity and finished rice store cum office space.The complex has 600KVA generator, an industrial borehole and two sets of water tanks; a steel over head tank of 55,000 litres capacity and sets of ground plastic tanks with a total capacity of 45,000 litres. The mill with optimum operating capacity can process up to 20,000 tonnes yearly and is estimated to generate at least 50,000 jobs. Apart from the whole grain table rice, the following by-products are also money earners: broken rice, used for rice pudding, tuwo; ground rice and rice flour. Rice ban – highly sort after for livestock feeds, oil extract and the cosmetic industry.

    Fashola said rice processed at the mill are far better than polished rice that are in the market because of its nutritious value. He said the mill has three main buildings. The first is where the raw paddy rice brought from the farm is kept, then to main building where the rice is processed and finally to the store room where it is stored before it is dispatched to the market.

    According to him, “We produce 2.5 tonnes per hour and an approximate 15,000 to 20,000 tonnes per annum.”

    On the type of rice processed at the mill, Fashola said: “Eko rice is a special brand of rice which is FARO 44 or FARO 52. We use this type of grain of rice for uniformity and that helps in monitoring the standard we produce. We specialise in par-boiled rice. We supply our rice to the government within the ministry and within the Alausa axis”.

    Farmers at the settlements will soon reduce post-harvest losses, increase income, and access post-harvest facilities with the rice processing plant which has become operational. The plant is a fulfillment of farmers’ dream of a facility that houses all the equipment for successful rice production. The project aims to improve the efficiency of rice production, storage, drying, and processing to reduce post-harvest losses and improve the quality of rice grains for human consumption. With all the equipment ready for operation, the farmers are optimistic that the facility will assist them to increase not only their income but also the attainment of self-sufficiency in rice production for the state.

     

    High quality cassava flour factory

     

    The Ministry of Agriculture and Cooperatives will be setting up a 1,000 metric tonne high quality cassava processing factory in Imota. When fully operational, the cassava factory will directly and indirectly engage over 500 people. This venture is in line with the Federal Government’s plan to reduce the nation’s dependence on imported wheat.

     

    Erikodo poultry estate

     

    The Erikorodo Poultry Estate, Ikorodu, is one of the five farm estates in various parts of the state to bring about self-sufficiency in chicken production.The poultry estate, has 10,000-bird capacity mechanised broiler house, 2,000 birds per day processing capacity plant and 1.5t per hour feed mill.

    Speaking with reporters, the Principal Agric Officer, Mr Idris Abideen, said the estate has a feed mill, a processing plant. He said occupants of the estate are expected to build chicken farms where the chicks are raised. He disclosed that broiler chickens are bred, especially for meatiness, quick growth, and weight gain. They are bred for excessive weight gain, especially in their breasts and thighs. The chicks live in the growing-out houses for about six weeks. At six weeks, the chicks usually weigh about 4 lb (1.8 kg), and are ready for slaughter. When the chickens are old enough for slaughter, Abideen said they are taken to the processing plant.

    At the processing plant, workers take the birds and hang them by their feet on a conveyor belt. In a typical process, the birds on the conveyor are first passed through a vat of electrified salt water called a stun cabinet. The mild electrical current in the water stuns or paralyses the birds. The birds’ carcasses hang until all the blood has drained.

     

    Pig farming estate

     

    The Lagos State Government has two pig farm estates – the Oke-Aro Pig Farm Estate and the Gberigbe Pig Farm Estate – located on a 80-hectare of land. The goal is for 1,200 pig farmers to nurture a total pig population of over 88,000.

     

    Vegetable farm settlements

     

    The state government is adopting the vegetable farming estate initiatives, similar in concept to fish and pig farming programmes. To this end, about 80 hectares of land have been designated as vegetable farms in three different locations – Igbodu (50 hectares), Iyaafin (20 hectares) and Araga (five hectares).

    Farm settlements are created as a stable place for farmers to live, grow crops and possibly raise animals.

    Farm estate provide standard residential and processing facilities for farmers.

     

  • Will power roadmap bring sustainable light?

    Will power roadmap bring sustainable light?

    When President Goodluck Jonathan unveiled the power sector reform roadmap on August 3, 2010, it was seen as a pathfinder to the country’s age-long power problems. Two years on, the roadmap is still a work in progress, writes EMEKA UGWUANYI Assistant Editor (Energy).

     

    The availability of reliable electric power to the homes and businesses of our citizens has been one item in our national life that we have approached with so much hope and yet experienced so much frustration over the past decades. Various regimes, in the distant past, paid little attention to the sector but in the recent decades, subsequent regimes have put in billions of naira to reverse the neglect and mismanagement which has characterised the sector.

    “I and my Vice President are conscious that what we do with the Nigerian electricity supply industry will go a long way in determining whether Nigeria remains in darkness or joins the rest of the world in the race for development. Our commitment is to bring an end to our nation’s stunted growth and usher in the fresh air of prosperity by pursuing a new era of sector-wide reform which is driven by improved service delivery to every class of customers in the Nigerian electricity sector.

    “The full implementation of the electric power sector reform has been a key priority for this administration. We established the Presidential Action Committee on Power (PACP) with a view to eliminating red tape and the often over-bureaucratic and inefficient nature of decision-making in government.

    “The Presidential Task Force on Power (PTFP) is the engine room that drives the vision of the PACP. The PTFP has the mandate to develop the roadmap and provide monitoring to ensure effective implementation of the plan. Their activities will introduce a greater degree of transparency to the way in which we implement the reforms and greater accountability on the part of those responsible.” These were the words of President Goodluck Jonathan while presentating the roadmap.

    Going by the President’s comments, the roadmap was borne out of the seemingly intractable power problems. Despite funds sunk into the sector by successive administrations, no tangible results were achieved.

    The roadmap is a well-intentioned statement of milestones to be achieved at specific periods, designed to prepare the sector for takeover by private operators because of government’s seeming failure to manage the utility. Until last year total power wheeled into the national grid didn’t exceed 3000 megawatts (MW).

    Besides, if the government had the capacity to generate more megawatts and the will to wheel it into the grid, the grid appeared so fragile that it hardly took 3000MW hence the incessant system collapse, which threw the country into total blackout most times.

    Although the roadmap failed to meet almost all its targets in generation, transmission and distribution of power and the privatisation timetable, it was able to give direction to the sector. The generation figures, improvement in transmission and distribution reports by the government have become more dependable and most of all, the transfer of ownership and management of the power sector asset to the private sector appear more realistic.

    Power supply is becoming less erratic, and besides some security concerns, genuine investors’ confidence is increasing but unless the privatisation is done right, there may be a problem. There is need to ensure that the preferred bidders that would take over these assets are desirous to take Nigeria out of darkness on sustainable basis.

    In order not to completely put the fate of over 160 million Nigerians, the economy and developmental aspirations into the hands of one person or a company, the government structured the privatisation terms differently for the various power assets, making the private investor the owner, with the federal and state governments owning equity shares.

     

    Privatisation

     

    The Bureau of Public Enterprises (BPE) is saddled with the responsibility of ensuring that the 18 successor companies unbundled from the Power Holding Company of Nigeria (PHCN) secure the right investors in terms of technical and financial competence.

    The assets for privatisation include 11 distribution companies (Discos) and six generation companies (Gencos). The distribution companies include Abuja Electricity Distribution Company Plc, Benin Electricity Distribution Company Plc, Enugu Electricity Distribution Company Plc, Eko Electricity Distribution Company Plc, Ibadan Electricity Distribution Company Plc, Ikeja Electricity Distribution Company Plc, Jos Electricity Distribution Company Plc, Kaduna Electricity Distribution Company Plc, Kano Electricity Distribution Company Plc Port Harcourt Electricity Distribution Company Plc, and Yola Electricity Distribution Company Plc.

    The Gencos include Ughelli Power Plc; and Sapele Power Plc in Delta State; Geregu Power Plc in Kogi State; and Afam Power Plc in Rivers State. These four power plants are thermal plants that run on gas while the remaining two – Shiroro Power Plc; and Kainji Power Plc both in Niger State are hydro power plants.

    The 11 discos are part of the 18 successor companies unbundled from the PHCN but because none of the bidders met the requirement for the Kaduna Electricity Distribution Company, the 21 firms currently shortlisted would be jostling for 10 discos.

     

    Shortlisted Discos

     

    Oando Consortium; Vigeo Holdings, Gumco, African Corporation AFC &CESC, Honeywell, and 18 other firms were among the shortlisted by the BPE from the 54 firms that submitted bids to acquire the 11 electricity distribution companies.

    Having passed the technical evaluation bid test, the BPE will on October 16, open the financial bids for the 21 companies.

    For the GenCos, the BPE had last Tuesday opened the financial bid for the preferred for eight investors that were shortlisted for five generation companies as the three firms that submitted bids for the sixth GenCo – Afam Power Plc, couldn’t meet the requirements. The eight companies offered a total of $1,119,363,150.05 for the five power plants.

     

    Firms for Discos

     

    The eight that qualified for the five companies are Amperion Power Distribution Company Limited (Geregu), Mainstream Energy Solutions Limited (Kainji), North-South Power Company Limited (Shiroro), Amperion Power Distribution Company Limited (Ughelli), Feniks Electricity Limited (Ughelli), Transcorp & Woodrock/ Symbion/ Medea/ PSL/ Thomassen (Ughelli), CMEC/Eurafric Energy JV (Sapele) and JBN-Nestoil Power Services Limited (Sapele).

    The NCP reminded Amperion Power Distribution Limited to be aware that the rules allow them to win only one Genco. Accordingly, if they win both Ughelli Power Plc and Geregu Power Plc, they will have to give up one.

    The Federal Government is selling majority stakes in power plants and letting private investors buy as much as 70 per cent of 11 distribution companies spun out of the former state-owned utility as it seeks private investment to curb power shortages.

    The Chairman, Technical Committee of NCP, Mr Atedo Peterside said all the winning bids are “subject to the approval” of the National Council on Privatisation headed by Vice President Namadi Sambo. Bidders have 15 days after the final approval to post a bank guarantee for 15 per cent of the bid amount and pay 25 per cent of their bid within another 15 days after the deal has been signed, he said. The balance should be paid over six months or as agreed with the privatisation agency.

    The transmission segment of the sector is wholly retained by the Federal Government but has been given out on management contract to a Canadian company – Manitoba Hydro International, for three years. On expiration of this term, the government may terminate the contract if it feels satisfied with the ability of Nigerians to manage it effectively but otherwise, the contract would be extended.

    Initially, the completion of the privatisation programme was scheduled to end by February this year but had to be extended by eight months to accommodate the requests and desires of the investors who submitted bids for the generation and transmission and distribution assets.

    But because the entire roadmap was anchored on a customer-driven sector-wide plan to achieve stable power supply, it was gathered that the extension of the privatisation timelines by the BPE became imperative. A BPE source explained that the bidders said they were not carried along on the initial privatisation package because they were not given the opportunity to carry out due diligence on the assets they submitted bids for and also measure the bankability of the projects, among others. It was in view of these requests that the BPE reviewed the timetable to October.

    The roadmap expressed such fears when it said that investors would be reluctant to make large-scale investments in the upstream and downstream sectors of the electricity industry unless they are confident that commensurate investments in the midstream sector will also take place: This was the reason the management of transmission was contracted out to a private company, the government said has both the requisite project management and technical expertise.

    The transaction timeline by BPE showed that the evaluation of the technical bids for the successor companies in generation and distribution companies would take place between August 14 and 28, 2012 after which the NCP would approve and announce the results of the technical evaluation by September 11, 2012. Although, there were slight shifts by few days in some of the schedules such as the announcement of the bidders that scaled the technical valuation of Discos’ bids, but the BPE stuck to its October deadline.

    The timeline for the shortlisted bidders for generation companies to submit their letters of credit was September 18, 2012 while October 2, 2012 is the deadline for shortlisted bidders for distribution companies, which the NCP would approve to finally pave way for the opening of financial bids of the shortlisted investors.

    The announcement of the preferred bidders for the generating companies, the BPE said, is October 9, 2012 while October 23, 2012 is the date for the announcement of the preferred bidders for the distribution companies.

    The BPE said that alterations in the announcement dates of some results such that occurred when the successful companies that passed the technical bids evaluation for distribution companies, was to ensure transparency in the privatization process.

     

    Gencos’ terms of

    privatisation

     

    The two privatised hydro power stations would be on concession for between 25-30 years while the four thermal plants would be 100 per cent sold but original plan in the roadmap was that thermal generating plants would be privatised via the sale of a minimum of 51 per cent equity to core investors that clearly demonstrate the technical and financial ability to operate and expand each plant.

    The roadmap further noted that care would be taken, by working closely with the Nigerian Electricity Regulatory Commission (NERC) to ensure that a monopoly or oligopoly of market power in the generation sector is not acquired through these divestitures.

    The BPE said that certainly the preferred private investor for any asset would have at least 51 per cent equity holding. It said the government deliberately structured it that way to ensure that all the concerns are private sector-run; adding that with 51 per cent or more equity shares, the preferred private sector bidder will have more directors on the board and exercise all the necessary powers.

    The states where the assets situate were mandated to own shares not more 20 per cent in such assets but apart from equities due to them in that regard, they (states) would further be considered for extra equity ownership, which would be based on the quantum of investment they made in such states. Most of the state governments had immensely invested in some the assets located in their areas. Therefore, the extra equity holding they will be considered for would be more of compensation and that extra equity should come from the Federal Government’s owned equity.

    The states that made investments in the power facilities would submit their claims (investments made in the facilities) to the government. Such claims would be evaluated and ratified by the NERC. On the basis of the feedback from NERC, the Federal Government will determine the level of extra equity to be allocated the states from its shares.

     

    Discos’ terms of

    privatisation

     

    As stipulated in Gencos, the preferred private sector bidder would have the highest equity holding of 51 per cent or more in each of the 11 distribution companies to be able to be in charge and take decisions. But the difference here is that none of the Discos would be sold 100 per cent. The federal and state governments where the distribution companies are located, would own statutory or recommended equities of not more than 20 per cent and extra equities, which would be measured by level of the state government’s investment in the asset.

     

    Targets, misses,

    achievements

     

    The Federal Government in the roadmap expressed commitment to achieve 14,000 MW of power generation capacity, which would be available by December 2013. Out of this, 4,500 MW would come from PHCN generation assets, 4,775 MW from the NIPP plants and 3,300 MW from independent power producers such as Shell and Agip, among others. Shell’s Afam VI in Rivers State, is a combined cycle plant with installed capacity of 650MW while Agip’s Okpai plant in Delta State has installed capacity of 460MW. In the short term, the government’s generation target achievable by April 2011 was put at 7000MW.

    To meet Vision 20:2020 target of 40,000MW, the government said it would require investments in power generating capacity alone of at least US$ 3.5 billion per annum for the next 10 years. None of the targets was met as the PHCN assets currently generates about 3000MW and the NIPP 1150MW. The Managing Director, Niger Delta Power Holding Company (NDPHC), which supervises the 10 medium sized power plants being constructed under the National Integrated Power Project (NIPP), Mr. James Olotu, said the Federal Government has so far spent about $8 billion on the projects.

    Olotu said out of the NIPP’s 10 plants, four are operational, which include Olorunsogo in Ogun State, Omotosho in Ondo State, Sapele in Delta State and Alaoji in Abia State. Alaoji according to him, came on board this month.

    He also noted that the total supply capacity from the four plants, which currently is wheeled into the national grid stands at 1150 megawatts (MW), which is expected to jump to about 1500mw by December.

    The other six plants, he added, are under construction and are at between 80 per cent and 90 per cent completion stage.

    He said: “By the end of this year, from all the stations, we will be looking at about 2500mw, which would be dependent on gas delivery. We are also building hundreds of thousands of kilometres of transmission line across the country as substations to support those transmission lines.

    “The company commissioned 150MVA transmission facility at the Ikeja West Transmission Station and another 150MVA would be commissioned this month at Akangba. Several sizes of this transmission facilities and smaller one have been commissioned and more would be commissioned before the end of this year.

    “We are also building several thousands of kilometres of lines for distribution and also the infrastructure and substations to support it. We are also building gas pipelines within the same fund to ensure that wherever you have a power plant there is gas that is flowing there and there is a line pipe that will be feeding the plant.”

     

    New projects

     

    The Federal Government revealed in the roadmap that it had plans that would lead to the commencement of construction of the Mambilla Power plant, which would have an installed capacity of 2,600MW and Zungeru Power with a capacity of 700MW as well as expand the Gurara Hydro power plant, which currently has installed 30MW to a capacity of 300 MW, 200 MW dual-fired power plant in Kaduna, which are expected to be completed within the next six years to complete.

    The Minister of State for Power Arc Darius Dickson Ishaku told the NCP last month that the Kaduna power plant is in progress, noting that eight gas turbine generators for the plant are at Onne port while the Mambilla installed capacity of 2600MW as contained in the roadmap has been revised to 3050MW. Update on the project, according to him, is still at bankable feasibility studies. The feasibility studies’ completion is last quarter of this year, adding that the entire Mambilla project would be financed through equity debt structure of 80:20 per cent ration by Exim Bank of China. The engineering, procurement and construction (EPC) would be completed by first quarter of 2013, he added. For the Zungeru plant, the minister said the project’s contract renegotiation is ongoing; the procurement of project management consultancy at BPP certification level while the environmental impact assessment has been completed.

    He also stated that the Federal Ministry of Power is in discussion with EximmBank of China for the funding of loan component, adding that the government is constructing a 10.75MW wind power plant in Katsin a, which consists of 37 wind turbines. The project, he said, was 98 per cent completion as at August 30, 2012.