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Tag: PHCN

  • Fed Govt completes sale of PHCN’s successor firms

    Fed Govt completes sale of PHCN’s successor firms

    The Federal Government yesterday drew the curtains on the privatisation 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 liberalisation of the power sector was at an advanced stage, as the government will soon open financial bids for the nation’s 10 National Integrated Power Project (NIIP) plants.

    “We have also reached an advanced stage in the privatisation 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 Privatisation (NCP),” he said.

  • EMS takes over PHCN’S non-core assets, services

    EMS takes over PHCN’S non-core assets, services

    The Electricity Management Services Limited (EMS) has taken over non-core assets and services of the defunct Power Holding Company of Nigeria (PHCN) to bridge the gaps that would be created by the sale and take-over of the generation and distribution facilities by their new owners.

    The assets are those not included in the facilities sold to the private sector investors under the power sector reform such as the engineering laboratories, meter test stations, and central stores (where electrical equipment and materials are kept).

    The agency will also provide ancillary and support services to the Nigerian Electricity Supply Industry (NESI), such as testing and certification of major electrical power equipment, standardisation of processes, equipment and materials and also archive power sector data and information. It will also ensure safe use of power in houses.

    The agency has taken over the central stores at Oshodi, national meter test station, Oshodi, and also the clinics.

    Other assets handed over to the agency include the central workshop where transformers are repaired and nuts and bolts manufactured; central laboratories and printing press where electricity bills and other important documents are printed. These are located in Ijora, a Lagos suburb.

    In Abuja, the agency inherited only the clinics while in Port Harcourt, it received the central stores and meter test station. In Enugu, the agency was handed over the clinics and the central stores in Kaduna.

    The ceremony was done in the presence of the representatives of the Bureau of Public Enterprises (BPE) and PHCN. For instance, during the handover in Lagos, Mr. Ugochukwu Ogbonna represented the BPE while Mr. Hakim Afolabi, Assistant General Manager (Performance Management) represented the PHCN.

    Managing Director/Chief Executive, EMS, Peter Ewesor, said: “EMS is one of the successor companies from the defunct PHCN that were established by the Federal Government in line with the Electricity Power Sector Reform (EPSR) Act to take over the non-core assets of the defunct PHCN and utilise those facilities to provide common services to the entire industry (generation, transmission and distribution). This is our first visit to these facilities to see what is on ground, assess them and formally take them over from the Bureau of Public Enterprise (BPE), the agency charged with the responsibility of carrying out reforms in the power sector.”

    On why should government wind down one company and create a new one, he said: “EMS was established to create efficiency in the industry and not a duplication of any sort. He said that these assets are already existing and instead of establishing another company to build capacity afresh, it is better to build on existing capacity, therefore, the function the EMS will execute will not be limited to managing printing press, laboratories and workshops, among others, there are other statutory functions the agency will perform.

    “The EMS is established to ensure that standards are maintained in the industry. It is a brand new company on its own, created to fill in any vacuum that would have been left after the complete privatisation. EMS is not a name change but created to enforce the reforms. For instance, we will ensure that meters that are brought into this country meet the required standards in terms of accuracy such that nobody either the supplier or consumer would be short-changed.

    “We are also mandated to ensure that all electrical appliances, materials and equipment that are brought into this country meet the required standards, which will be done by our inspecting engineers. The inspection will not just be about power lines and network, it will also cover consumer houses for safety because some consumers carry out installations in their houses without earthen system (the cable connect from the gear seat to ground), which makes their household equipment to shock if there is leakage. The earthen system ensures that if there is any power leakage in the premises, instead of that leakage going around the household equipment such as the refrigerators, it discharges to the ground.

    “Household equipment also burn because they are not of the right ratings and standards. In collaboration with other government agencies, we will ensure that these anomalies are checked.”

  • PHCN retirees decry irregular payment

    Rresident, Nigeria Union of Pensioners (Electricity Sector), Chief Temple Ubani has said the non-payment of monthly pensions to some pensioners every other month by Nigeria Electricity Liability Management Company Limited (NELMCO) has become a recurrent decimal and a huge challenge.

    Ubani, who stated this at the Mid-Term Special National Executive Committee and Central Working Committee meeting of the sector, in Benin City, Edo State, also said the administration was working with NELMCO to correct the anomaly.

    He added that the payment of monthly pensions is not done at the purview of the National Secretariat but by NELMCO.

    He said the continued delay by NELMCO in payment of 120 per cent arrears of pension arising from various increases, has posed a big challenge to the union, but noted the union will not rest on its oars.

    He further disclosed that the administration has in the last 748 days achieved the payment of 50 per cent pension increase with arrears of three months.

    Speaking further on the activities of the union during the year, he said the union has tried to give the union its best within the limit of human endeavour.

    He said: “This administration, sensing danger of non-payment of August 2012 pension by PHCN Management quickly addressed the press at the Union Secretariat, in September, last year and directed them to carry out a peaceful protest at all pension pay-centres nationwide to drive home their demand.

    “The action worked out by September of same year, as NELMCO took over payments of our pensions and the takeover was seamless. The administration further received the Managing Director of NELMCO, Dr. Samuel Agbogun at the Secretariat in March, 2012 for a meeting that deliberated on the welfare and future of the members.

    “Furthermore, during the period under review, the administration collaborated with other sister unions within PHCN such as NUEE & SSAEAC, which culminated in various joint actions in 2012 and subsequently released a joint statement entitled violation on negotiated agreement which was jointly signed by the leadership of the unions”.

    Ubani said the decision became necessary to save members from the challenges posed by government’s decision to privatise PHCN even as the battle to save their pensioners was still on.

  • Needless guarantee

    Needless guarantee

    •N50bn public funds to the GENCOs won’t let them put in their best

    The Federal Government, through the Bureau of Public Enterprises (BPE) and the Nigerian Bulk Electricity Trading Company (NBET) Plc signed a N50billion needless escrow guarantee account agreement on power with three Nigerian banks. The banks: United Bank for Africa (UBA), First Bank Plc and First City Monument Bank (FCMB) Plc are to act as custodians of the funds and to ensure adherence to due process in the bid to access it by owners of the electricity Generation Companies (GENCOs). The generating companies are successor companies of the Power Holding Company of Nigeria (PHCN).

    The money, to be administered by NBET was part of proceeds from the privatisation of the defunct PHCN and is expected to insure the generating companies against revenue loss in their effort to boost electricity generation. According to Benjamin Dikki, Director-General, BPE, the Partial Risk Guarantee (PRG) expected from the World Bank could not be secured in the prevailing circumstance.

    Obviously, the Federal Government has shown understandable anxiety over the need to improve electricity generation in the country. This is because of the importance of stable power if the economy must truly develop. However, the way to go should have been for it to use whatever money at its disposal to develop infrastructure in the sector rather than acting as insurer to the GENCOs. The N50billion Naira would go a long way in helping to boost desired infrastructure in the power sector.

    This should not mean a denial of the fact that power generation requires a lot of financial investment. Dikki’s costing puts the average cost of installing a megawatt at about $1.3 million which we consider to be quite huge. But didn’t the GENCOs conduct due diligence before purchasing that part of PHCN? If they did, then the duty of providing guarantee should not be that of the selling government.

    And if they did not, the GENCOs are presumed to have voluntarily taken over the risks under the legal principle of volunti non fit injuria (voluntary assumption of risk) which should not be the fault of the government. It is this fear of loss that would make them put in their best to ensure the success of their business ventures in the power sector. The best the government ought to do is to provide the enabling environment through tax incentives and duty waivers on necessary machineries, among others, that could boost the generating capacities of the GENCOs, over a specific period of time. This policy negates the best tradition and spirit of free enterprise, and such guarantee will not instill discipline in the GENCO ranks.

    Going by the country’s awry antecedents in the handling/management of such funds, the sad result of this huge fund can easily be predicted. Despite government’s assurances that the money is not a gift, we have little or no confidence in a policy initiative whereby the government stands as surety for the GENCOs. The official fears that whatever is generated might not be bought by the public is unfounded as there is already in existence a huge market for whatever power may be generated by the GENCOs.

    This booty comes across as another ill-conceived policy grandstanding and misplaced priority by the government. Again, on this issue of power, the government should not be seen to be approbating and reprobating at the same time if truly it understands the whole essence of privatisation. We ask: What is the purpose of transiting the power sector from public to private enterprise when the government knows that our money would still be deployed to guarantee these investors?

  • N50b for electricity firms to boost power

    N50b for electricity firms to boost power

    Owners of the Electricty Generation Companies (GENCOs) are to get a N50 billion prop from the Federal Government, which is desperate to expand electricity generation.

    The N50 billion will come in form of a guarantee.

    On behalf of the Federal Government, the Bureau of Public Enterprises (BPE) and the Nigerian Bulk Electricity Trading Company (NBET) Plc, the government signed yesterday an escrow agreement on power with three Nigerian banks in Abuja.

    The three banks are United Bank for Africa (UBA), First Bank Plc and First City Monument Bank (FCMB) Plc, which is the lead escrow agent.

    Although the banks will take custody of the fund, the NBET will administer the N50billion, which will be raised from the proceeds of the privatization of the PHCN successor firms.

    In the absence of the World Bank to provide Partial Risk Gurantee (PRG), the fund will serve as a palliative for the new owners to improve power generation, The Nation learnt.

    But, speaking after the documents signing ceremony, the Director General, BPE, Mr. Benjamin Dikki, noted that such financial guarantee should not BE taken as a grant, considering established processes required for any generation company to benefit from it.

    His words: “This N50 billion is not a dash. There are certain conditions that must be met before funds can be drawn from this escrow account. The market and systems operator have to confirm the quantum of power that was put on the national grid. The market operator has to confirm that because of system defects and inefficiencies in the transmission network, certain amount of power was lost. So, there has to be a due process before any Genco can draw from this amount; it is not a gift because certain conditions have to be met.”

    He said :”It is actually the generation companies that are left on the high end and we need to guarantee that whatever power they generate will be paid for if not, they will lose their capital and not able to invest in expansion of their capacities.

    “We have a deficit of about 29,000 megawatts (MW) of basic power needed to stabilise our power needs of 40,000MW and the average cost of installing a megawatt is about $1.3 million and that will mean an investment of $7.5 billion for 5000MW, and so we need to make sure that we create the atmosphere that will enable these generation companies to make investments without worrying whether they will be able to recoup monies they have invested and that is why this escrow account was created,” Dikki said.

    On the roles of the banks, Dikki said: “The banks are the custodians of the money, which is deposited in them and we want to establish a process through which this money will be drawn and not just drawn frivolously; that is why the BPE, Bulk Trader and the banks signed the agreement to say that you have to follow a process to draw this money; otherwise, there will be penalties.”

    The distribution companies are not covered by this escrow account because they have committed to reducing the Aggregate Technical Commercial and Collection (ATC&C) losses of the companies.

    Dikki said: “If you recall, they (distribution companies) were not given to the highest bidder but to those that committed to reducing ATC&C losses by a certain percentage and so they have committed and have given a technical proposal with a business plan cataloguing the level of investments that they will make every year in this regard.”

  • MAN adopts wait-and-see attitude to power reforms

    MAN adopts wait-and-see attitude to power reforms

    THE Manufacturers As sociation of Nigeria (MAN) will not assess the power sector reforms for now, its Chairman, Infrastructure Committee, Riginald Odiah, has said.

    He told The Nation that the body wanted to watch the situation as it unfolds before passing judgment on issues relating to the sector reforms.

    He said: ‘’As regard the issue of privatisation of the Power Holding Company of Nigeria (PHCN), it is a good development in the history of Nigeria’s energy sector. The idea is aimed at repositioning the sector for growth, and further prepare it to compete with others in the emerging economies.

    “Though we believe that the National Electricity Regulatory Commission (NERC) is competent to regulate the sector and further make it work, we are still studying the situation. We want to see how the whole thing will play out before stating our position on the matter.’’

    Odiah further said the country was grouped into eight industrial clusters, out of which three were picked for citing of power plants after a careful appraisal of the developments in the country.

    He added the three clusters located in Ota/Abeokuta area of Ogun State have functional power plants generating about 550 mega watts in three of its eight delineated industrial clusters.

    Odiah said the Ota/Abeokuta axis was chosen because of its relatively huge concentration of industries.

    ‘’We were looking at areas with high concentration of industries and after necessary investigations, we arrived at a decision to choose Ota/ Abeokuta area. Besides, we discovered that the cost implication of having power plants is the area was not much, when compared with others. In the three industrial clusters located in the Ota/Abeokuta axis, we have three power plants with an output of 550 mega watts,” he added.

    The Federal Government has fixed next year for the privatisation of the National Independent Power Projects (NIPP). It is aimed at increasing electricity supply.

  • ‘Sacked PHCN workers’ll get jobs’

    ‘Sacked PHCN workers’ll get jobs’

    For the almost 47, 000 workers of the Power Holding Company of Nigeria (PHCN) who lost their jobs recently, there is hope.

    The workers that constituted the bulk of the National Union of Electricity Employees (NUEE), and the Senior Staff Association of Electricity and Allied Companies (SSAEAC), stakeholders said, are employable.

    The Chief Executive Officer, Chartered Institute of Personnel Management of Nigeria (CIPM), Sunday Adeyemi said the disengaged workers stand better chances of landing jobs in the post – sector reforms era than any new employee from outside.

    He said this view was true because thousands of the disengaged electricity sector workers have the knowledge of the operations of the power plants and other PHCN facilities across the country, adding that it would take months, or even years for the new owners of the power companies to source for new manpower for their companies.

    Insisting that experience counts and plays a major role in the recruitment of workers, particularly for those workers in technical and high skill areas, the CIPM Registrar said all the disengaged PHCN workers need do, is update and improve on their skills and competencies, to make them relevant to the new owners of the power companies.

    “The workers need to be ready to move on and find a positive way forward. It is also important to have worked out any issues concerning wrongful termination because this can prevent you from moving on,” he said, adding that it was important for the former workers to leave whatever pain they felt behind them, saying the they should not be ashamed of their job loss.

    Chairman, Lagos Chapter, NUEE, Mr. Adeleke Ibrahim, said the Federal Government’s reasons for not having the money, or will to implement the reforms was a challenge.

    He had pointed out that while the sector unions were not against privatisation of the PHCN, or the power reforms, he urged the government to pay the workers their entitlements before the new owners start operations, noting that this would put the disengaged workers on a sure footing in their quest to forge ahead in their new career.

    The Lagos State NUEE boss said some of the issues in contention, which included the non-payment of retirement savings to pension fund administrators and non-remittance of dues of two per cent deducted from workers’ salaries to the unions, be addressed, adding that a workforce without pensions and one that faces threats of sack, would not be active or productive.

  • ‘Kaduna DISCO not yet handed over to new owners’

    THE Kaduna Electricity Distribution Company (Kaduna DISCO) has not yet been handed over to the new owners in line with the current privatisation of the power sector by the federal government, the company said yesterday.

    It warned that customers in the four states covered by the company should stop preventing staff of the organisation from carrying out their legitimate duty.

    The company, in a statement by the Acting Assistant General Manager, Public Affairs of Kaduna DISCO, Uche Oranye, said it remains under the Power Holding Company of Nigeria(PHCN) and urged customers in Kaduna, Zamfara, Kebbi and Sokoto states to continue to pay their bills at the nearest business unit.

    The statement warned individuals constructing or carrying out businesses under its 11, 132 and 330 KV lines to desist, pointing out that such action could lead to a loss of property or death.

    The company commended customers in Sokoto and Kebbi States for their patience, maturity and support during the repair work on the collapsed 330 KV tower in Maiyama local government.

  • We have paid PHCN workers, says BPE boss

    We have paid PHCN workers, says BPE boss

    The Federal Government has paid all the 40,696 verified staff of the defunct Power Holding Company of Nigeria (PHCN), the Director-General, Bureau of Public Enterprises (BPE), Benjamin Dikki, has said.

    He said the payments were made in accordance with the October 31 agreement reached between the workers and the Federal Government, “that the issue of all severance benefits should be completed by (today) Friday, 15th November, 2013.”

    Dikki, insisted that the workers have  received their severance benefits, explaining that their retirement component has been credited to their Retirement Savings Accounts (RSA).

    He said: “We have paid every PHCN staff who has gone through a  verification process, who has been authenticated to be a bonafide PHCN staff, we have done a biometric capture of them.

    “They are about 40,696 who have been so verified and we have paid them both the severance package and the retirement component that goes into the retirement savings accounts. All those have been done,” he stressed.

    The BPE boss however admitted that there were issues in the Enugu Distribution Company whose workers’ data was corrupted, but is now rectified for remittance of benefits to their accounts in the next few days, adding that there are 2500 casual workers, whose status and documents government is still authenticating.

    He said: “Those we have verified, the agreement was that casual workers will be made permanent and pensionable, and all those who have authentic papers, we have regularised their employment and paid them.”

    Dikki said that the 2500 are the ones that BPE has not verified, stressing that BPE is waiting for the successor companies that engaged them to bring the necessary documents for authentication and payment.

    While commenting on the issue, the National President, National Association of Electricity Employees (NUEE), Comrade Mansur Musa, said that government has stopped payment, arguing that government has not fulfilled its own part of the pact. He urged the authority to conclude the workers’payment so as to put all the labour matters regarding the privatisation of PHCN to rest.

    His words: “So far the government has been paying and what we noticed is that the payment has stopped. And they have promised to complete payment by tomorrow and also some aspect of it by the end of this month.

    “ We are not comfortable with the way payments are going and we have already sent our representation to government. We are asking them to honour our own agreement, if they wouldn’t want us to have issues with them. They have to stick to our agreement so that we can conclude on this labour issue.”

    Meanwhile, the Federal, states, and local governments, which are the shareholders of the National Integrated Power Projects (NIPP), have asked the Niger Delta Power Holding Company (NDPHC) to reinvest the proceeds from the sales of the 10 power plants in the power sector.

    The Managing Director, (NDPHC), Mr. James Olutu said: “We are already on the verge of privatising the power generation plants that we are building. What we will be able to get from this privatisation, our shareholders- the three tiers of government have approved that the money be reinvested on power.”

    He said the NDPHC is developing about 10 power plants in hydro that require cooperation with the Ministry of Power, Water Resources and other relevant agencies to ensure that there is over 6000 Mega Watts from hydro.

    He said the company would earmark $1.8billion for electricity transmission in view of the 16,000 mega watts projection.

  • ‘PFAs have only received part payment of PHCN workers’ pension’

    ‘PFAs have only received part payment of PHCN workers’ pension’

    Pension Fund Administrators (PFAs) have only received some part payments of the pension benefits of workers of the defunct Power Holding Company of Nigeria (PHCN) who were sacked, the new Chairman of Pension Fund Operators Association of Nigeria (PenOp), the umbrella body for the PFAs, Misbahu Umar Yola, has said.

    He spoke to reporters while outlining his plans for the association in Lagos.

    Yola, who said some PFAs have received payments of the PHCN pensioners from the Federal Government, could not, however, confirm how much they have received as at press time.

    He noted that certain details and information were still being worked out by the PFAs with the Office of the Accountant-General of the Federal Civil Service, the Bureau for Public Enterprises (BPE), and the PHCN management, adding that when the process is completed, their accounts will be credited.

    Meanwhile, the Minister of Power, Prof. Chinedu Nebo, has given reasons why some of the workers have not been paid their severance packages.

    He said the delay was as a result of inconsistent information submitted to his ministry and pension fund management companies by some of the workers.

    Nebo, who spoke at the opening of a new power transmission sub-station in Ibadan on Friday, said there was a provision for payment to the workers.

    “We are working hard to ensure that all members of staff of the former PHCN are paid their entitlements. There are about 7,000 left, whose biometrics were not perfect. The problem is that they were inconsistent in the information they gave to us. Some of them opened more than one bank account and submitted different names to the pension fund managers. We are trying to clear all these anomalies before making the payment,” the minister explained.

    “The handover of the successor firms was seamless and I appeal to the workers of the defunct PHCN and those with the new distribution and generation companies that the government will fulfil its obligation to them.”

    Speaking on his tenure just as he took over the mantle of leadership of the association from the Managing Director, Pension Alliance Limited, Mr. Dave Uduanu, Yola disclosed thatplans are ongoing to upgrade the association to an institute.

    He said a secretariat will be setup in the coming weeks to help coordinate its activities while the association awaits the regulator, the National Pension Commission’s approval to become an institute.

    The chairman said his administration would place more emphasis on educating members of the public on the contributory pension scheme noting he will work closely with the media to ensure proper dissemination of information about the sector.

    He said: “The Contributory Pension Scheme has a safe mechanism to ensure the security of pension funds and pension operators will continue to support the development of the scheme, to ensure protection for workers in retirement.

    “We are considering a law that will make the funds in the Retirement Savings Accounts of workers to be able to contribute more to the growth of the economy and meet some other needs of the workers even before retirement”.

    The chairman further said his team would collaborate with the National Pension Commission (PenCom) to encourage saving culture among young people and also ensure that the open window initiative is achieved.

    A framework has also been designed by Pen Com and in a few months, it would roll out the guidelines that would enable for the sector.

    He further disclosed that the PFAs have started engaging the informal sector and have started putting incentives that will attract the informal sector.

    The new members of PenOp Executive Committee are the Managing Director, Shell Nigeria Closed Pension Fund Administrator Limited, Mrs. YemisiAyeni, who is the vice-chairman; Managing Director, ARM Pension Managers Limited, Mr Sodiq Mohammed, is the Head, technical committee; Managing Director, Premium Pension Limited, Mr. Wilson Ideva, is the Head, Legal and Regional Committee; Managing Director, FUG Pension Limited, Mr Usman Suleiman, is the Head, Branding and Communication; Managing Director, Zenith Pension Fund Custodian, Mrs. Nkem Oni-Egboma, is the Treasurer and Mrs. Susan Oranye, is the Secretary.