The Nation Newspaper

Tag: Benjamin Dikki

  • Eight bills will impact on economy, says BPE

    Eight bills will impact on economy, says BPE

    The Bureau of Public Enterprises (BPE) has said the  quickly passage of its  eight  bills into law by the National Assembly would have a positive impact on the Nigerian economy.

    The Director-General,  Benjamin Dikki  applauded the Federal Executive council for hastening the transmission of the eight reform bills to the National Assembly for passage.

    BPE’s Head, Public Communications, Chigbo Anichebe,  In a statement  listed the bills as;  Railway Bill, Inland Waterways Bill, Ports and Harbour Bill, Federal Roads Authority Bill, National Roads Fund Bill, National Transport Commission Bill, Competition and Consumer Protection Bill and Postal Sector Reform Bill.

    While exchanging views about the reforms bill during donor agencies coordination meeting on infrastructure and Public Private Partnership (PPP) with the Nigeria Regional Office of the African Development Bank (AFDB) Group in Abuja on Monday, Dikki,  expressed the hope that with the necessary stakeholders’ engagement, the Bills would be passed within the current legislative year.

    He said the purpose of the Bills among others, include the abrogation of existing monopoly laws and to liberalise the various sectors to allow private sector participation, ensure a conducive business climate to encourage private investment, promote competition and institute a sound legal and regulatory framework that would ensure independent regulation.

  • DISCOs’ growth tied to losses’ reduction, says BPE chief

    DISCOs’ growth tied to losses’ reduction, says BPE chief

    Reduction in the Aggregate, Technical, Commercial and Collection (ATC&C) losses is vital to the growth of the 11 power distribution companies (DISCOs), the Director-General, Bureau of Public Enterprise (BPE), Benjamin Dikki, has said.

    He said the failure of DISCOs to do that would affect their profitability and further impact negatively on the operations of the firms.

    The firms are Eko Electricity Distribution Company (EKEDC);  Ikeja Electricity Distribution Company (IKEDC);  Kano Electricity Distribution Company(KEDC); Kaduna Electricity Distribution Company; Jos Electricity Distribution Company; Abuja Electricity Distribution Company and others.

    Part of the conditions given investors of distribution firms during privatisation by the BPE, was that they should demonstrate the ability to reduce commercial and technical losses for growth.

    Dikki told The Nation that the companies’ ability to reduce losses would determine how well they can go in the industry. He said the losses arise when the firms were unable to fix their distribution problems, while commercial losses occur when the firms could not block loopholes in revenue generation and collection.

    He said: “The government is happy when the companies are able to reduce their commercial and technical losses for growth, if a company does not minimise its losses,  such a company is in danger.  It would record   low profitability. The generation companies (GENCOs) generate electricity, wheel it to the  grid and sell it to the distribution companies.  The DISCOs receive, for instance, 100 megawatts of electricity at a cost. If the DISCOs lose one megawatt of electricity, they have to make up for it because nobody would compensate them. Every megawatt the DISCOs loses because of distribution inefficiency is money.”

    He said gas is the bane of the sector, noting that it is affecting the operations of the generation and distribution companies. “Inability of the  power plants to access gas  means they would not be able to generate electricity for the distribution companies,” he added.

    He said the BPE, which conducted post-privatisation monitoring of the DISCOs to assess their performance, learnt they were investing in infrastructure to improve operations.

    ‘’The exercise shows that the DISCOs are investing in infrastructure for growth. Eko Electricity Distribution Company has carried out rehabilitation programmes. The company is buying transformers, cables and others. It has raised $450,000 to improve its operations. Ikeja Distribution Company has increased installations by about 230,000 houses. They go out, meet customers, know their problems and expand their clients’ base, improve efficiency and profitability.   Until we have sufficient gas, that is when people would realise the amount of investments these DISCOs have made to improve the network,” he said.

  • Nigeria’s GDP drops four per cent due to poor power supply

    Nigeria’s GDP drops four per cent due to poor power supply

    Nigeria’S Gross Domestic Product (GDP) has lost about four per cent of its value due to shortage of power supply, the Director-General, Bureau of Public Enterprises (BPE), Benjamin Dikki, has said.

    Presenting a paper tiltled: “Update on post-Privatisation Issues” yesterday in Abuja during the inaugural of the National Council on Nigeria, Dikki explained that  power supply has a direct relationship with the affluence of a country.

    “Look at the percentage of GDP that is lost because of power. We are losing almost three to four per cent of GDP because of poor power supply.”

    He lamented that Nigeria cannot develop with its kind of power supply at the moment, stressing that “no nation can abandon investment in power for so long and expect to make progress,” he said, adding that  while Germany has 406watts per capita, Nigeria is doing a paltry 40 megawatts per capita.

    “We cannot develop and grow with that kind of power consumption. That also shows you that there is a direct relationship between power and affluence and economic development. The more power available to the citizenry, the more development and affluence resulting from the whole process,” he said.

    Dikki said the Federal Government has paid severance and pension gratuity to  over  98 per cent of the 47,913 workers of the defunct Power Holding Company of Nigeria (PHCN).

    He said out of the 47,913 who were identified as workers, 46,326 were validated, while 45,750 have had their funds remitted to the office of the Accountant General of the Federation.

    The BPE boss explained that out of this number, 365 have retired and have been handled as retirees, while there are 201 outstanding payments that have been validated that are in the process of being effected.

    Dikki said the government is yet to validate 865 workers and 722 unidentified cases.

    He said N371billion has been remitted to the Office of the Accountant-General for payment.

    In the case of retirees, he said: “We have identified 4,126; we have verified 3,233; 933 showed up for verification; 1,083 have already been paid while 358 are undergoing auditing to validate the retirees;  381 computation is going on to determine their entitlement.”

    Dikki explained that N10billion has been remitted to the office of the Accountant General to effect the  payment of the retirees.

    He said: N392billion has already been remitted  for effecting the payments of these retirees, and there is funding for those that have not been verified. As soon as they are verified, remittance will be made appropriately for their payment.”

    On the National Council on Power, the Minister of State for Power, Mohammed Wakil, said the Council is an enlarged forum consisting of key stakeholders in the power sector, mainly from the public, private and non-governmental organisations and the development partners to deliberate on issues that will support the Federal Government’s effort at accelerating sustainable power supply.

  • BPE, bidders meet on assets sales

    BPE, bidders meet on assets sales

    The Bureau of Public Enterprise (BPE) has met with the preferred bidders for seven of the 10 National Independent Power Plants (NIPPs) to ensure  a smooth exercise,  its Director-General, Benjamin Dikki, has said.

    He said the Abuja meeting became imperative for BPE and the investors to look at issues vital to the plants’ sale.

    The issues were  shares purchase agreement (SPA), performance agreement and shareholders agreement, among others.

    The forum, Dikki said, was also an opportunity for BPE and the firms to look at the terms   governing sale and purchase of the plants.

    The National Council on Privatisation (NCP)  chaired by Vice President Namadi Sambo, approved the sale of the seven plants, following successful financial bids opening last March.

    At the meeting were EMA Consortium which is hiding for (Benin Generation Company and Calabar Generation Company), Dozzy Integrated Power (Egbema Power Generation Company),  Seoul Electric Power Limited (Geregu Generation Company), ENL Consortium Limited (Olorunsogo Generation Company), and Omotoso Electric Power (Omotoso Power Generation Company).

    Alaoji, Omoku  and Gbarain  power plants’ prospective buyers were not represented at the meeting because of of litigation.

    Dikki said the court has restrained the government from selling the three plants.

    According to him, the sale of the 10 plants is on course,  adding that no problem would be  allowed to hinder the privatisation.

    Dikki said: “The government has slated 10 power plants for privatisation, but a company went to court to stop the sale of three of the plants. The government believes in the rule of law and has gone to court to reverse the injunction in order to privatise the plants soon.

    “The seven firms have submitted the preferred bidders guaranteed forms. Based on this, they are qualified to discuss the sales’ document with BPE. The document contains the Shares Purchase Agreement, the Performance Agreement and the Shareholders Agreement, which have been discussed at the meeting. The meeting was called to negotiate and agree on the document.

    “Once agreement is reached on the document, it would be executed. From the day of execution, the preferred bidders are obligated to pay 25 per cent of the bids’ price within a particular period of time. Thereafter, they would be given six months to pay the balance.  They have the option to pay early and take over the plants. That is where we are on the privatisation of the plants.”

    The spokesman of NDPHC, Yakubu Lawal, said he was aware that BPE and the seven preferred bidders had a meeting. He said the meeting was organised to finalise the sales and purchase deal.

    He said: “The meeting was organised to examine issues relating to Shares Purchase Agreement, Shareholders Agreement and others that need to be signed in order to achieve the privatisation goals. I think the two parties need to go through the agreements to arrive at a consensus on the issue of selling the plants.”

    The 10 midsized power plants built under the NIPP Plants, which are supervised by the Niger Delta Power Holding Company (NPHDC) are expected to generate combined 5,000 megawatts (MW) of electricity.

  • BPE urges banks to invest in power infrastructure

    BPE urges banks to invest in power infrastructure

    The Director-General, Bureau of Public Enterprise (BPE), Benjamin Dikki has urged banks to invest in the provision of infrastructure in the power sector, lamenting that in spite of  the agency’s efforts to attract investors into the sector, the level of investment remains very low.

    He urged the lenders  to enter into agreement with the distribution companies (DISCOs) by funding transformers’ purchase.

    He said infrastructure remains the major problems besetting the sector, noting that BPE has on several occasions appealed to investors to set up companies that would manufacture transformers, cables, meters and other components needed to distribute power effectively in the country.

    He said one or two companies produce meters in the country, adding that they have not been able to meet the demands.

    He said: “We have appealed to investors invest in Nigeria.  We have shown them that there is an opportunity in the country. We have provided an opportunity for investors meet us (BPE) on the issue of producing transformers, cables, smartcards, meters, but to no avail. These components are important in the industry, if we are to achieve meaningful progress.  The DISCOs need them to distribute electricity they get from the gas-powered plants.’’

    He said huge capital is required to set up companies that would manufacture power equipment, giving the state of the country’s economy.

    “Nigeria requires millions of metres to provide power to people.  To produce these meters and other equipment in Nigeria, billions of dollars are needed to achieve results,”  he added.

     

  • 66% of privatised firms doing well, says BPE

    66% of privatised firms doing well, says BPE

    • 17 investors show interest in NITEL

    ABOUT 66 per cent of the privatised enterprises in the country are doing well while 34 per cent are not doing so well, the Director- General, Bureau of Public Enterprises (BPE) Mr Benjamin Dikki has said.

    He identified poor policy implementation by previous administrations as the factor responsible for the non-performance of some of the privatised firms.

    He said the Federal Government is trying to create the environment that would allow private sector investments in infrastructure through the institutionalisation of sound policies, liberalisation and delineation of the roles of the parties. He added that appropriate legal and regulatory framework, mitigation of risks and introduction of independent economic  regulators limiting government to policy formulation, planning and technical regulation, among others are also important steps government is taking.

    According to him, 17 investors have signified interest to buy the Nigerian Telecommunications Ltd (NITEL) and its mobile arm, Mobile Telecommunications Ltd (MTEL), in the ongoing guided liquidation of the national telecom carrier.

    He said about 22 investors have shown interest but five out of them were left out because of lateness.

    He said: “When the time for the submission of Expression of Interest (EoI) closed, we got 17 EoIs. Five were late and were not accommodated in strict compliance to our rules.

    “The 17 bidders are currently being evaluated and would go through the approval process. BPE would announce those that emerge on completion of the evaluation. They would be given a chance to do due diligence and then at the appropriate time, be asked to submit technical and financial bids.”

    Dikki said the guided liquidation was not auctioning of the various parts of the company.

    As for  the N350 billion liabilities of NITEL, he said the Federal Government in line with the Companies and Allied Matters Act (CAMA) has sought for protection so that the balance from liabilities would not go back to the treasury, noting that the liabilities are huge necessitating the choice of guided liquidation.

    He said: “We are selling the company as a business unit that must continue doing business in the telecoms sector, because NITEL is the first national carrier. We have done similar things before with the AFCON, the fertiliser company which is today known as Notore.”

    He said the government had opted for a guided liquidation option because the expected proceeds from NITEL would likely be less than its debts value.

  • Fed Govt loses N1.6tr to 600 public enterprises

    Fed Govt loses N1.6tr to 600 public enterprises

    The Federal Government’s  N1.6trillion investment over the years to create 600 public enterprises in all sectors of the economy before privatisation may have gone down the drains, the Bureau of Public Enterprises (BPE), has said.

    Its Director General, Mr. Benjamin Dikki lamented that there were no corresponding returns on these investments to the economy which later became a huge drain pipe through which public funds were siphoned.

    According to a statement, endorsed by Head, Public Communications, Mr. Chigbo Anichebe the DG who made a presentation titled The Nigerian Reforms & Privatisation Policy, Processes, Gains, Challenges and Prospects to members of the Ibrahim Badamasi Babangida (IBB) International Golf and Country Club, Abuja, said in addition to this colossal losses, only 500,000 jobs were created just as the enterprises had over 5,000 board seats.

    Dikki disclosed  that  a substantial part of the then  non-performing debts owed to the London and Paris Clubs were mostly  loans to these enterprises which also owed salaries and left huge pension liabilities  amounting to over N2 trillion to the be borne by Federal Government.

    Dikki said: “Public enterprises consumed over $3 billion (about N480billion) annually in subventions and  subsidies. Tax deductions at source were not remitted to the tax authorities and  no dividends were received or reasonable service provided by  them despite their monopoly status.”

    The BPE boss said the objectives of the government to invest directly in the Nigerian economy and promote  indigenisation failed woefully to produce the desired economic results as the enterprises could hardly break-even let alone make returns on the investments.

    Instead of turning the country’s fortunes around, the enterprises became a burden resulting to economic downturn. “Nigeria’s economy experienced declining growth, increasing unemployment, galloping inflation, high incidence of poverty, worsening balance of payments, debilitating debt burden and increasing unsustainable fiscal deficits,” he lamented.

  • Pay before assuming control, BPE warns DISCO owners

    The Director-General of the Bureau of Public Enterprises (BPE), Benjamin Dikki, has reminded the new owners of Afam Power Plc and Kaduna Electricity Distribution Company (KEDC) to pay before assuming control.

    According to a statement, while inaugurating the Transitional Committees (TCs) of the two companies in Abuja yesterday, Dikki said the Bureau initiated the TCs concept to allow the core investors to interact with the management and to enable them have first-hand information on the companies to prepare to implement the Post Acquisition Plan (PAP).

    He also said it was aimed at allowing the investors to interface with the management for a smooth transition from a public-oriented enterprise to a private sector-driven one and to engage them to understand the challenges and peculiarities of the company.

    However, the director general emphasised that they would not assume full ownership of the companies until full payment was made.

    “You are only allowed access to information and to acquaint yourselves with the working of the company but not decision-making. You should also not engage in any turf war with the management,” he said.

    Dikki said the practice was novel in the privatisation history in Nigeria and that the Bureau initiated it because of the complex nature of the power transaction.

    He hoped that the two committees would also be beneficial to the core investors.

    On February 21, last year, after a meeting with the Federal Government, management of the successor companies and the preferred bidders, it was resolved that after the payment of the initial 25 per cent deposit by the bidders, they would have the right to access the company facilities and participate in a Transitional Committee.

     

     

  • FG spends N360bn on PHCN workers’ benefits

    The Federal Government on Tuesday said it had spent more than N360 billion on the payment of severance benefits to workers of the defunct Power Holding company of Nigeria (PHCN).

    The Director-General, Bureau of Public Enterprise (BPE), Mr. Benjamin Dikki said this in a chat with the News Agency of Nigeria (NAN) in Abuja.

    He said the payment was in accordance with the agreement to settle the severance benefits to the affected workers.

    Dikki said that at the beginning of the privatization process, the budgeted cost for the settlement of labour liabilities in the sector was put at N401 billion.

    “The BPE contributed N315.6 billion from the sale of PHCN asset, while the Federal Government provides N45 billion to bring the amount so far remitted to more than N360 billion.

    “It would be recalled that the federal government had demonstrated great commitment in resolving labour issues in the power sector reform and privatization.

    “ From the beginning, it had committed the entire proceeds realised from the sales of the power assets to the payment of the worker’s terminal benefits.

    “ The N360 billion so far spent was forwarded to the office of the Accountant-General of the Federation to settle 51,247 PHCN Staff, both active and retired,’’ he said.

    Dikki also said that of the 51,247 workers, 47,913 were active staff, and 3,334 were retired staff of the company.

    The Director-General said 2,158 staff, comprising casual workers and those not properly documented, were yet to be settled.

     

  • FG completes sale of PHCN’s successor companies

    The Federal Government on Monday drew the curtains on the privatization of the successor companies to the Power Holding Company of Nigeria (PHCN) with the formal handing over of the remaining two – the Kaduna Distribution Company and Afam Generation Company – to their new owners.

    The Northwest Power Limited got the Kaduna Disco, while Taleveras Afam Power Plc, promoted by Taleveras Group got the Afam Generation Company.

    The Bureau of Public Enterprises (BPE) had earlier announced Taleveras as the preferred bidder for Afam Genco with an offer price of $260 million, while Northwest had the highest Aggregate Technical Commercial and Collection Loss reduction (AT&C) of 29.26 per cent in respect of Kaduna Disco .

    The handing over of the companies to their new owners was completed yesterday at the signing of the Share Purchase Agreement (SPA) by representatives of the BPE and the companies in Abuja.

    BPE’s Director General, Benjamin Dikki signed for the Federal Government; Oghens Sanomi signed for Taleveras, while Yusuf Abubakar signed for Northwest.

    Before the signing of the agreement, Dikki said the final handing over of the nation’s power sector to private managers will be completed next year.

    He said the commencement of the second phase of the process of full liberalization of the power sector was on its advance stage as the government will soon open financial bids for the nation’s 10 National Integrated Power Project (NIIP) plants.

    He said, “We have also reached an advance stage in the privatization of the 10 NIPP plants. We shall be holding the financial bid opening for the plants after we have got the approval of the Technical Committee and the National Council on Privatization (NCP).

    “Once that is concluded, we would have come to a situation where the power sector will be completely in the hand of the private sector.

    “But that will not preclude further government investment in the sector.

    “Once the sector is completely liberalized, government can also be a player in the sector until we achieve sufficiency in power supply in the country.

    “Today we are making history as we come to the end of the privatization of the PHCN’s successor companies.”