The Nation Newspaper

Tag: BPE

  • Body faults NCP, BPE on power sector privatisation

    The Senior Staff Association of Electricity Workers and Allied Companies (SSAEAC) has faulted the privatisation of the power sector by the National Council on Privatisation (NCP) and the Bureau of Public Enterprises (BPE) ,picking holes in their claims of carrying out due diligence on the new power investors’ financial and technical capabilities.

    Speaking to The Nation, the General Secretary of Association, Abiodun Ogunsegha said the claims were false and misleading, in view of the financial and technical problems being experienced in the sector and the poor electricity supply across the country.

    He said: “Had it been that NPC and BPE conducted a thorough financial and technical due diligence on the investors, they would know that many investors are not financially prepared for the electricity business. Many are struggling to pay back the banks that gave them loans to purchase the assets of Power Holding Company of Nigeria (PHCN).  Some of the distribution firms cannot provide money to carry repairs of facility because they could not generate enough revenue.

    “Many investors are technically deficient. They do not have deep knowledge of operations of the sector. They were not properly advised on the issue of technical partners needed for growth. They thought they would recoup their money within three months. However, events and circumstances have proved them wrong.”

    Ogunsegha said the sector is suffering because the investors are not ready to commit additional funds.   He said it is illogical for investors to use money realised from other business to finance the loans, adding that the sector would continue to suffer.

    According to him, the pre and post-privatisation mistakes committed by the BPE and NCP have culminated in the problems facing the sector.   He said consumers are protesting because they could not get regular power, adding that protests would not stop until there is improvement in electricity supply.

    However, the BPE’s spokesman, Joe Anichebe said the allegations that proper due diligence was not carried out on the bidders were not true. Anichebe said the bodies consulted on wide range of issues before taking decisions, noting that they spent months in examining the bidders’ proposals.

  • Privatisation: Workers score BPE low

    Privatisation: Workers score BPE low

    The Steel and Engineering Workers’ Union of Nigeria (SEWUN) has scored the Bureau of Public Enterprise (BPE) low over its handling of the privatisation process in the country.

    Its National President, Comrade Elijah Adigun, who spoke at the union’s yearly Industrial Relations Conference held at the Teachers’ House,  Ibadan, said the BPE, saddled with the responsibility of selling partially and wholly owned Federal Government companies, has not done well.

    “The BPE that was saddled with the responsibility to sell partially and wholly owned Federal Government companies, ostensibly to increase capacity utilisation and create jobs for our teeming workforce must be ashamed of its achievement as nearly all the companies privatised have either closed shop or are comatose,” he said.

    Adigun cited the case of the steel industry, which has been comatose to include automobile companies such as Anammco Limited, Enugu; National Truck, Kano; Steyr Nigeria Limited, Bauchi and Leyland Nigeria Limited, Ibadan, designed for the manufacturing of trucks, medium and long range mass transit system because of the steel firm’s inability to supply raw materials to them .

    The country, he said, continues to deplete scarce foreign reserves to import needed vehicles for its mass transit system.

    He said whereas the Federal Government established Peugeot Automobile Nigeria (PAN) Limited and Volkswagen of Nigeria (VON) to provide the country’s official and pleasure cars, the aforementioned vehicle assembly plants are lying idle and their premises being used as warehouses for junks imported from Asia.

    Adigun faulted the claim by Volkswagen of Nigeria that it has begun assembling vehicles in the company, pointing out that such claims are mere publicity stunts to deceive the world.

    In a similar vein, the its Deputy General Secretary, Mr. Okonma Paul, said the essence of privatisation in the steel sector has been completely defeated, adding that the investor, who bought most of the steel manufacturing companies, does not know anything about the sector.

    The union, he said, has written the BPE on two occasions to show its disagreement on the way issues are being handled.

    Adigun also blamed the comatose state of the manufacturing sector on the epileptic power supply, describing it as one of the major hindrances to the growth of the sector.  He regretted that the cries of the union for improved power has received little or no attention from the concerned authorities.

    He said although every succeeding government claimed to have sunk billons of dollars to address the malaise,  but  the impact has not been felt in the industry, noting that, the situation has allegedly contributed to the crippling of the manufacturing sector  regarded as the hub of employment generation.

    “This is exactly the reason for the manufacturing division of most private sector companies’ relocation to neighboring countries, while bringing finished goods to our country. The implication is that our economy creates jobs for the home countries of manufactured goods at the detriment of our teeming workforce,” Adigun said.

    The high interest rate regime in the country, according to him, is crippling business and fuelling inflation in the economy. He added that the situation is further compounded by the directive of the Central Bank of Nigeria (CBN) to commercial banks to retain 50 per cent of public sector funds in their custody.

    He said except this high cost of obtaining fund is addressed, the plight of the industrial sector will grow from bad to worse.

    Chairman, Nigeria Labour Congress (NLC), Oyo State Branch, Comrade Bashiru Olanrewaju  urged steel  workers to improve their productivity because it is the only way to be competitive in the labour market, adding that the steel industry must be embraced for the country  to where it should be.

    “Our nation should get a functional and effective steel sector. If we must grow, we must also embrace Information and Communications Technology (ICT). We can also learn from other nations like China, Japan,” he said.

    He said about  30 years ago, nobody respected China and Japan. But today, they are respected because they have embraced the industry, developed their steel manufacturing industry.

  • BPE moves to repeal monopoly laws

    BPE moves to repeal monopoly laws

    The Director General of the Bureau of Public Enterprises (BPE), Mr. Benjamin Dikki yesterday said the agency is sponsoring eight reform  bills in the National Assembly in order to repeal monopoly laws.

    He added that the reform bills are to liberate the various sectors of the economy, separate the roles of policy formulation from regulation and operations and also set up independent regulators for the sectors.

    Making a presentation to officials of Department for International Development (DFID) and other international development partners on “The  Federal  Government  Privatisation and  Economic  Reform Programme” in Abuja yesterda, Dikki the eight bills were designed to eradicate all forms of monopolistic practices in the affected sectors.

    In a statement endorsed by its Head,  Public Communications, Chigbo Anichebe said the bills are the Railway Bill, National Transport Commission Bill, Inland Waterways Bill, Ports & Harbor Reform Bill, Road Sector Reform Bill, Federal Competition and Consumer Protection Bill, Roads Fund Bill, and Postal Sector Reform Bill.

    He also identified other sector-specific reform laws midwifed by the BPE to include Electric Power Sector Reform Act (ESPRA), Nigeria Railway Commission Bill, Telecommunications Act, National Inland Water Way Bill, Solid Minerals Act, Gas Bill, Petroleum Industry Bill,  Federal Competition Commission Bill, Ports and Harbour Authorities Bill,  Postal Sector Reform Bill, National Transport Commission Bill, Industrial Policy,  Federal Roads Authority Bill, Pension Reform Act, and  Roads Fund Bill.

    Dikki further elaborated on the role of the BPE in championing the reforms of the nation’s seaports through the concession of the various port terminals, adding that before the reform, it was practically impossible to carry out meaningful business activities in the ports as it took months to clear goods.

    He said ports operations were characterised by long waiting periods, diversion of Nigerian bound vessels to neighboring countries and very high and duplicated charges to Ports users.

    According to him, collaboration with international development partners has positioned the Bureau as Knowledge based institution.

    He said without the Technical and Financial support of the World Bank, the US Agency for International Development (USAID), the United Kingdom DFID and other development partners, the reform and privatisation programme of the Federal Government would not have achieved the success recorded so far.

  • ‘Cost-reflective tariff only possible with stable power’

    There cannot be a cost-reflective tariff until a significant improvement in power supply is attained, the Director-General, Bureau of Public Enterprise(BPE), Benjamin Dikki, has said.

    The new power investors are seeking for a hike in tariffs to improve their earnings and compensate for the cost of doing business. However, the Nigerian Electricity Regulatory Commission (NERC) said it would not be right to increase tariffs in the face of poor electricity supply.

    Dikki said a lot still needed to be done to improve power, given his assessment of the operations of the power companies.

    The firms, he said, are trying to fix infrastructural problems to improve electricity supply, adding that it would take some time to achieve that goal.

    He said as much as BPE and NERC would be willing to look into the possibility of having a cost-effective tariff in the industry, the present power supply situation in the country may not make it possible for now.

    According to him,  NERC came up with Multi-Year-Tariff-Order (MYTO), after considering the variables involved in the production and distribution of power.

    He said: “For there to be increased tariffs, NERC has to look at the variables again, analyse them and see whether they align with the prevailing situation in the industry. MYTO is scientifically determined. This implies that the tariffs need to be painstakingly handled to achieve the desired results.

    “Once there is an improvement in power supply, consumers would not hesitate to pay the tariffs issued by NERC. Conversely, consumers would fault any attempt to increase tariffs as long as they having poor power supply.”

    He explained that gas has been a problem in the sector, adding that attempts to proffer solution  would require galvanising activities of the operators.

    “Gas is one of the variables in the industry. If all the variables are well taken care of, there would be an improvement in power generation, distribution and transmission. Once this happens, businesses would improve,” he said.

  • 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.

     

  • BPE: Sale of refineries will take two years

    BPE: Sale of refineries will take two years

    It will take two years to privatise the four refineries, the Bureau of Public Enterprise (BPE) has said.

    BPE Director-General Benjamin Dikki said  the explanation became necessary to enable Nigerians understand the complexities of selling the Kaduna,Warri and Port Harcourt 1 &2 refineries, which have combined capacities of 445,000 barrels per day (bpd).

    He said the 10 investors that got licences have not done anything because of poor investment climate.

    Last January, this year, the government privatise the refineries but later changed its mind, following an outcry.

    The organised labour, including the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and National Union of Petroleum and Natural Gas Workers (NUPENG), kicked  the plan because the government did not  follow due process.

    Dikki told The Nation that the government has not decided on whether to privatise the refineries or not because the issue is multi-faceted. He said there are various stages in privatisation, adding that each stage requires at least two months to enable the Bureau do a good job.

    He explained that a committee comprising representatives of the fiscal agencies would be set up to provide modalities for selling the refineries. The committee, he further explained, would request for expression of interests from prospective financial advisers, who will submit their proposals, which will be opened by the committee who will evaluate them and announce the preferred advisers. This exercise alone, Dikki said, would last about three months.

    The successful advisers, he said, would after the processes of expression of interests and submission of bids by prospective investors, carry out due diligence on the bidders.

    According to him, the advisers will look at the technologies/equipment the bidders are using, their technical capability, viability, drilling, piping, and pipeline network at their disposals, among other factors. The advisers will also study the dynamics in the sector, after which they will submit their recommendations to the committee for necessary actions.

    Dikki said the due diligence will capture these variables, adding that the exercise would last about nine months.

    He said: “The committee will review the reports of the advisers, and determine the options needed to make them workable. The committee would submit the reports to the National Council on Privatisation (NCP) who will provide the recommendations to the President.  The actual privatisation starts after the President has approved the recommendations.

    “Even if we start the process today, privatisation would not start until next year. Thereafter, we determine the transaction structures/modalities and advertise for expressions of interests. At this point, we would give investors six weeks to express interests and shortlist those we think have the capabilities to run our refineries, and pipeline networks for oil and gas. Besides, we will reach an understanding with labour and that would also take some time. We are still a long way off.The implementation of the privatisation procedures will take a longer period of time.”

    According to him, failure to reach an understanding with the labour would affect the transition from public to private ownership of refineries.

    Dikki explained that the Ministry of Petroleum Resources, Nigerian National Petroleum Corporation (NNPC), Department of Petroleum Resources (DPR), Petroleum Products Pricing Regulatory Agency (PPPRA), play regulatory roles,  stressing that the development is inimical to the growth of the gas industry.

    “There is the need to separate policy formulation from regulation to achieve results in the industry as we have done in the telecomss sector. The policy formulation lies with the Ministry of Information and Technology, while the regulation lies with the Nigerian Communication Commission (NCC); while the operators include Etisalt and MTN, among others. No person should play two roles. An operator must not involve in policy formulation; a policy formulator must not be involved in policy regulation,” he added.

  • Firm faults BPE,others on NITEL, MTEL privatisation

    A firm, Basbsim International Limited has faulted the ongoing process to sell  the assets of Nigerian Telecommunications Limited Plc (NITEL) and Nigerian Mobile Telecommunications (MTEL).

    It alleged that the process being handled by the Bureau of Public Enterprise (BPE) is devoid of transparency and tailored to favour certain interest.

    The allegation is contained in court processes in relation to a suit marked: FHC/ABJ/517/2014   filed before the Federal High Court, Abuja by the firm through its lawyer, Christopher Eichies. Sued with BPE are its Director-General, the National Council on Privatisation (NCP), NITEL, MTEL and the Attorney General of the Federation (AGF).

    Basbsim stated that it learnt about the sale of assets of NITEL and MTEL via an advertorial published by BPE on page 49 of the June 9 edition of Thisday newspaper where the advertisers invited expression of interests from the general public.

    It further stated that on the strength of the advertisement, it undertook to bid for the assets by putting in a first financial and technical proposal. It added that in line with international best practices, it took it made to submit its bid at the offices of the BPE on June 30 as requested in the advertorial, but was prevented.

    The plaintiff said its head of operations in Abuja was refused entry into the premises of BPE located at plot 11, Osun Cresent, Maitama, and that all entreaties made by it to the BPE and its officials to accept its proposal fell on deaf ears as the security operatives in BPE’s Abuja office said they had instruction from the management not receive any proposals.

    It alleged that by its conduct, BPE gives the impression that it had already predetermined those companies to whom the assets of NITEL and MTEL would be sold, and that there was a plot to exclude credible investors from partaking in the sale of the assets.

    The plaintiff argued that the assets of the two public companies, valued at billions of United States dollars, belonged to Nigerians and not personal estate of those whose responsibility it is to sell them.

    It urged the court to order the BPE to accept its interests to be prequalified in the privatization process and to declaration that the BPE’s refusal of its expression of interests on June 30 is unlawful.

    Basbsim is also seeking a declaration that the NCP possesses the power to prevail on the first and second (NCP and its DG) defendants to accept its prequalification bid. It equally seeks an order directing the first defendant to accept its expression of interests and those of other companies earlier rejected.

    The defendants are yet to respond to the suit.