The Nation Newspaper

Tag: PHCN

  • PHCN assets: BPE to penalise defaulting investors

    •New owners to take over in October

    Any new investor in the Power Holding Company of Nigeria (PHCN) that is unable to pay the 75 per cent bid balance would be penalised.

    Director General of the Bureau of Public Enterprises (BPE), Mr. Benjamin Dikki, who disclosed this in Lagos, also said that the new investors are expected to fully take over in October this year after paying the balance of 75 per cent bid.

    The investors in the PHCN successor companies had earlier made the mandatory 25 per cent payment.

    Dikki, who spoke during a television programme, however, expressed the confidence that all the investors were serious businessmen who have the required financial muscle to pay the bid price.

    Head, Public Communications, Mr. Chigbo Anichebe made this disclosure in a statement yesterday.

    He also allayed fears of monopoly by the investors, saying that the necessary framework and institutional checks had been put in place to regulate their activities and appropriate pricing.

    The BPE boss appealed that the investors be given time to increase capacity.

    He said: “They (investors) will after take over, re-tool and bring in new machinery like turbines, which are not easily bought off the shelf to put power on proper footing”.

    Besides, he said  the investors would need time to re-tool after take over and between two- three years to bring in the required machinery after which the country would witness increased and steady power supply.

    Dikki  assured Nigerians that power supply in the country will improve when the private investors take over. He expressed confidence that the introduction of sound maintenance culture would ensure that the current installed capacity of 6000 megawatts is exploited and put on the national grid. He stressed that that alone would stabilise power supply.

    Dikki who also spoke on agriculture and transportation sectors in the country, said the Bureau was working in tandem with the transformation agenda of the present administration to transform the two sectors through the privatisation of the Abuja Securities and Commodity Exchange (ASCE) and the setting up of a regulatory body in the transport sector.

  • Communities decry arbitrary bills

    Residents of Oke Ira Community and its environ,in Lagos State are kicking against arbitrary issuance of estimation bills by the Power Holding Company of Nigeria, Ikeja Distribution Zone. The action is common in areas operating with analog meters and it has been on for the past two years . According to the residents,PHCN officials complain of shortage of staff.

    The residents through a petition signed by Hon. Babatunde Bankole, Elder Olayinka Fadahunsi (chairman of the Association) and Comrade Hamilton Olajide (Secretary) respectively, further alleged that PHCN Ikeja distribution Zone has failed to solve the problem of constant breakdown affecting NOB – OLUWA Feeder, that supply electricity to the most populated area in Oke Ira and its environs right from the back of Excellence Hotel in Aguda to the end of Power- Line in Oke Ira.

    They called on the Managing Director of NIPP Mr. James Abiodun Olotu to act quickly on the installation and commissioning of the abandoned second Oke Ira 15MVA, 11/33 KV. transformer.

     

  • ‘Why there is power failure in Ibadan’

    The Power Holding Company of Nigeria (PHCN) in Ibadan has explained the reasons for the poor power supply in the state capital and its environs in the past few days.

    The Principal Manager, Public Affairs, Ibadan Electricity Distribution Company, Tokunbo Peters, said the poor power supply was as a result of a sharp drop in supply to Ibadan.

    He said in most cases, a Business Unit, which requires 45 megawatts (MW) for its customers is restricted to just 10MW, while in some cases the six Business Units were placed on zero allocation.

    The management of the company, he said, appeals to the company’s customers in Ibadan and the surrounding towns to bear with it during this critical period as it is not unmindful of the discomfort and inconvenience, which the load-shedding may have caused them.

    It implored members of the public to refrain from invading PHCN offices or molesting its employees on account of the load-shedding since the company does not generate electricity, but only distributes whatever megawatts it receives from the source.

    The management said: “Mass protest and invasion of PHCN offices would not translate to improved power supply. Customers should be mindful of the fact that PHCN employees live amongst them and they also endure whatever hardship or discomfort that is created by the poor power supply situation.

    “Concerted efforts are being made to improve power supply to customers at Felele, Challenge, Odo-Ona area of Ibadan and environs as PHCN has constructed another 33kv Feeder from Ayede 132/33kv Transmission substation to the interchange 33/11kv Injection substation. As soon as the new 33kv Feeder is commissioned, there will be much improvement in power supply to customers in Felele, Odo-Ona, Idi-Ayanre, Elewura, Orita-Challenge and environs.”

  • Why investors are yet to pay 75% balance for PHCN

    Why investors are yet to pay 75% balance for PHCN

    The preferred bidders who have made the initial 25 per cent payment for the purchase of the unbundled Power Holding Company of Nigeria (PHCN) are yet to pay the 75 per cent balance, which is obligatory before the handover that is scheduled for July ending, because of the pending labour issues, it was learnt yesterday.

    According to an insider source at the Bureau of Public Enterprises (BPE), none of them (the investors) had paid the balance of 75 per cent.

    The source also explained that even if the investors had paid the balance, the Federal Government would not hand over the entities to them until the labour issues are resolved.

    “None of them has paid yet. They are waiting for the labour issues to be resolved. Even if they finish paying, they won’t be handed over until the workers’ issues are resolved,” said the reliable source.

    The Nation also gathered from another source that the July ending handover date which the BPE has proposed is also dependent on the settlement of the PHCN workers issues.

    It will be recalled that the Minister of Power, Prof. Chinedu Nebo, had on May 1 this year disclosed that the Federal Government would pay the workers’ severance package with PHCN privatization proceeds next month. Although it was not clear whether the proceeds, which he said would all be used to pay the staff, included the 75 per cent that the investors are yet to pay.

    President Goodluck Jonathan approved N348 billion for the payment of severance package, although only N45 billion was appropriated for that purpose in this year’s budget.

    But according to Nebo, government would raise funds to take care of the deficit from the PHCN privatization proceeds.

    Although it is not clear whether the 25 percent the investors have already paid is enough for the deficit, the investors, it was learnt yesterday, are are also waiting for the government to sort out the labour issue before releasing the balance of 75 per cent to the appropriate financial authorities for the BPE.

    Despite this waiting game from both sides, the Minister of State for Power, Hajiya Zainab Kuchi, on Thursday told journalists in Abuja that the fund required for the payment of the workers was available.

    She added that the data computation was already ongoing.

    Her words: ”We have taken over all the problems. We have addressed all the issues. The funding is there for the payment of labour. All they are doing is data computation and as soon as we are done with this, the handing over processes will take place.”

  • Investors to take over PHCN in July

    Investors to take over PHCN in July

    • Govt releases MYTO funds

    Winners of the successor firms unbundled from the Power Holding Company of Nigerian (PHCN) are to assume possession of the companies by July, the Minister of State for Power, Hajiya Zainab Kuchi, has said.

    Hajiya Kuchi said the new date, which is in line with the Bureau of Public Enterprises’ (BPE’s) timeline for the privatisation of PHCN, was chosen to allow for the resolution of outstanding issues between PHCN staff and the Federal Government.

    Kuchi, who spoke to reporters in Abuja, noted that the ministry had taken over the challenges and addressed them.

    According to her, the fund for the workers’payment is available and the ministry that is computing the data would pay the workers in June.

    She said: “We are finalising on labour. The labour is what is standing between us and handing over. And all the issues that were there have been addressed. We are on payment to a certain level and once the payments issues are finalised, which we hope will be June ending, we will definitely be handing over to the successor companies by the end of July.

    “That is the conjecture that we have here and that is the stand of BPE. BPE has a timeline, but this was stretched forward because of the labour issues that we needed to address here.

    “But we have taken over all the problems. We have addressed all the issues. The funding is there for the payment of labour, all they are doing is data computation and as we are done with this, the handing over processes will take place.”

    The minister, who clarified what she told the Senate Committee on Power on Wednesday, said there were projections that by December last year, the privatisation process would have been concluded. Thus there was a zero allocation for the distribution and generation companies.

    But the situation, according to her, “is being addressed through the release of (Multi-Year Tariff Order (MYTO) fund for the transition period until handing over.”

    On when the Federal Government would supply 10,000mega watts in the country, the minister said though the ministry was generating 10, 000mw, it would supply in 10,000mw next year.

    She added: “By our projection and by the data available by the Transmission Company of Nigeria, we will reach 10,000mw by December next year- 2014 – if we succeed. We are depending on the Transmission Company of Nigeria because right now, we are generating up to 10,000mw, but the wheeling power is what we are trying to increase its capacity.”

    The minister explained that the gap between generation and supply is because of the “rot” that the transmission section suffered.

    She said the Niger Delta Power Holding Company has been trying to revive the infrastructure, which has been down.

    Continuing, Kuchi said following the rehabilitation of the companies, “we have about 10 NIPP projects that are going to be commissioned.”

    Besides, she said with the additional power supply, which the Federal Government is expecting from the Africa Development Bank and the Europe bond that the government has just finalised, wheeling in 10,000mw be attainable next year.

    She noted that the ministry is maintaining a deliverable generation capacity of 4,500mw.

  • Lagos communities reject PHCN’s ‘arbitrary’ billing

    Three communities, Shogunle, Mafoluku and Oshodi in Oshodi/Isolo Local Government Area of Lagos State, have accused the Ikeja Electricity Distribution Company and its Oshodi Business Unit of imposing outrageous and arbitrary electricity bills on the people.

    They said that the bills have no bearing with electricity supply and consumption in the areas.

    Rising from a meeting of the community development committee (CDC) where all community development associations (CDAs) were represented, the people, in a letter dated May 1, 2013 and addressed to the Chief Executive Officer (CEO), Ikeja Electricity Distribution Company, stated that they could no longer honour the obnoxious ‘coded’ billings until the policy is reversed, advising that it should ask its disconnection staff to keep off the community.

    “After several representations to you and your officials on the devastating effect the high billings from your obnoxious policy of coding is exerting on our people without any positive response, we have decided at a congress of our entire people held on April 30, 2013, that with effect from the date of dispatch and receipt of this letter, you advise your staff at all levels to desist from serving on any person/premises in Oshodi, Mafoluku and Shogunle with coded and estimated billings and going into any place in the council area for the purpose of disconnection in their own interest as their safety doing so can no longer be guaranteed by our leaders,” the people said in the letter.

    The letter entitled: “Coded Billing: We Can’t Pay Any More” was signed by all community leaders in the area.

    They also decided to make a report of the matter to the Nigeria Electricity Regulatory Commission (NERC) and the Ikeja Public Forum of the Commission to determine the honesty and fairness of the coding policy, questioning the legality when it was not part of the new Federal Government Electricity Tariff Structure.

    “We are unable to understand how the idea of coding meters and billing came about and why we have to be inflicted with such obnoxious policy in total disregard for the economic reality of today; the bills are totally unacceptable and we cannot continue to allow them to be building up as they are now.

    “Such explanations advanced by some of your officials for the policy, including faulty and aged meters, non-possession of meters and meters without seal are untenable. In fact, the reasons are self-exposure of your failure as an organisation. From time, we paid our fixed (maintenance) charges as at when due; if a meter is faulty, aged or without seal, is it our responsibility to service or replace it?

    “If we have paid and got a meter in the past and it becomes obsolete on the grounds of old age, why should it be our responsibility to pay for a new one to replace it and if we pay for a meter and you are unable to supply, why should you at the same time turn around to punish and inflict us with arbitrary billing in the name of coding for non-possession of a meter?

    “Coding is exploitative and obnoxious; meters are not read and even where they are read, the readings are not taken into account as they are said to be unreliable because of the ages of the meters and we are billed arbitrarily for consumptions not enjoyed.

    “Those of us who have paid for meters and are not supplied for years are also put in this category for no fault of theirs and made to pay these questionable bills,” the communities alleged, stating that they would ask the Ikeja NERC Public Forum to compel the electricity distribution company to provide and install prepaid meters for all those who have paid for meters in the past and have not been supplied and compensate those who were subjected to the coded billings for the unwarranted payments collected from them.”

  • Fire guts Ipaja power transmission station

    Fire guts Ipaja power transmission station

    An early morning fire yesterday razed a power transmission station based in Ipaja, a Lagos suburb, causing fears of likely blackout in Ikeja and its environs.

    Eyewitnesses said the cause of the fire which began around 11: am was unknown. The fire consumed a massive transmission station belonging to Transisco Power Company. “We don’t know the cause of the fire but it started shortly before the rains began. The fire was so massive that even the fire services were unable to bring it under control,” an eyewitness said.

    It was also gathered that efforts of the Lagos State Fire Service (LSFC) at bringing the fire under control failed and the team withdrew after 30 minutes. The heavy rain yesterday could not also stop the inferno which eventually ended around 3: pm.

    The eyewitness added: “I think there may be oil or some fuel in the transformer, because it continued to burn despite the efforts of the fire service men and it didn’t stop also in the rain until whatever was burning inside had been exhausted.”

    Meanwhile, a source at the Power Holding Company of Nigeria (PHCN), Ikeja District, said the fire might likely disrupt allocation of power in Ikeja and environs.

    “The fire happened at a transmission station; we at the distribution end of it are waiting for proper briefing on the extent of damage and how much it will affect power distribution in Ikeja and environs. But take this from me, it will definitely affect power distribution, but we just don’t know the extent,” the source said.

  • Fed Govt to spend PHCN privatisation proceeds on severance payment

    Fed Govt to spend PHCN privatisation proceeds on severance payment

    • Says Nigerian banks can’t finance $3.4b loan

     

    The Federal Government will spend proceeds from the privatisation of the Power Holding Company of Nigeria (PHCN) to offset the severance package of the power sector disengaged workers, the Minister of Power, Prof. Chinedu Nebo, has said.

    Nebo, who spoke yesterday in Abuja, explained that the proceeds will be employed to bridge the gap between the N384billion approved for the payment of the workers’ severance package and the N45billion allocated for the same purpose in this year’s budget.

    He explained that with regards to the electricity workers, the government has earmarked N384billion for paying off these staff, but added that only N45billion has been provided for in the budget.

    He said the proceeds of the sale of these companies will fund the rest, adding that after the payment of the deficit, there will be little or nothing left from the privatisation proceeds.

    The minister stated that Nigerian banks were free to compete in the financing of the $3.4billion loan required to fix the transmission grid, adding that the fund was required for the 776MVA super grid.

    He was however sceptical on the possibility of Nigerian banks’ preparedness to provide the level of capitalisation required in the power sector, since in his opinion, they were used to short term loan and high interest rates.

    He revealed that the foreign banks involved in the financing are offering very low interest rates and long term credit facilities.

    Nebo said: “In fact there are people who are ready to fund the transmission. They are coming with billions of dollars. What about Nigerian banks? The gentleman Tony Elumelu has mentioned that the Nigerian banks are also ready. They are welcome. It will be unfortunate if they are not. I think it is difficult for them because of the level of capitalisation and the fund that is required.

    “Unless as a consortium, they may not be able to bring the billions of dollars needed over a long stretch of time. Some of them that are saying they will fund the transmission line, we will pay in 30 to 40 years. And I don’t think any Nigerian bank will be ready to do that. And the interest rates are low and these banks may not have the facilities to give us low interest rate.”

    The minister also noted that the Federal Government requires N77billion to meet the metering gap in the country.

    Nebo said the country needs over 3million smart meters to bridge the existing gap.

    He said that government cannot reverse its implementation of the power road map , especially for the fact that the bidding for the privatization of the power sector was very transparent in accordance with international best practice.

    Nebo noted urged Nigerians to bear the current situation of the power sector, which he said would soon become history when the ministry wheels in additional mega watts from the National Independent Power Projects (NIPP).

    According to him, the Zungeru Hydro electric and Mambilla Hydro electric projects are underway to provide additional mega watts.

    He accepted that although the country has capacity for generation of 6,000mw at the moment, it supplies about 4,500mw.

     

  • ‘Many forces are working against PHCN privatisation’

    ‘Many forces are working against PHCN privatisation’

    The Chairman, Presidential Task Force on Power(PTFP), Dagogo Jack, has alleged that beneficiaries of the public sector-led Power Holding Company of Nigeria (PHCN) management are still strategising against its the privatisation.

    Jack, who was fielding questions from reporters after the Presidential Power Transactions Signing ceremony at the Banquet Hall of the State House in Abuja on Monday, added that the beneficiaries have the potential to upstage the exercise.

    He said the outgoing management and staff of the PHCN were accused of foul play.

    Jack said: “Some people are even saying they are doing something negative because they know they are going.”

    According to him, the Federal Government has been secretive about its plans for the settlement of labour severance packages because some of the opponents could incite the workers to oppose the exercise.

    The chairman submitted that it is preferable for the Federal Government to be strategic in its labour relations.

    His words: “There are too many forces. Let me share something with you. And I think you need to go away from here with that. There are a lot of forces that are not interested in this game. And sometimes when we talk about it, they think we are being defensive. But I wish you guys will at some point make it for you to be on this side of the table to know what I am talking about.

    “There are some people who benefitted from the fact that there is no reform; that there is no privatisation they benefit from it. And they have been benefiting from it for years, so they have more potentials to upstage it than the people that are just trying to come inside.

    ” So ,when you are saying you are going to discuss labour issues on the pages of newspapers, people will go in there and sensitise labour to take another position. And you won’t know how that happens and suddenly, you are very close to closing a deal and the deal gets open again and you will not know how. So, it is better to be strategic in labour relations. That is all I will say.”

    Jack also explained that it would be better to allow the investors to state their investment projection in terms of power generation and transmission capacity instead of government rolling out plans for them.

    He said the electricity market is shifting ownership; when it is completed, the new owners can release their projections.

  • Govt to conclude PHCN workers’ severance payment in June

    Govt to conclude PHCN workers’ severance payment in June

    The Federal Government yesterday said it would settle all outstanding workers’ severance payments with the Power Holding Company of Nigeria (PHCN) before the end of June, this year.

    The Minister of Power, Professor Chinedu Nebo, said this at the Presidential Power Reform Transaction Signing ceremony in Abuja.

    Though the government recorded an achievement in the power sector reform when it handed over certificates of 25 per cent payment for the first installment of the purchase of the PHCN generation and distribution companies, severance package for workers had remained a problem.

    However, a representative of the Generation Companies (GENCOs), Tony Elumelu, said once the government removes the labour crisis barriers, the investors are ready to pay their 75 per cent balance instead of waiting for the expected six months.

    Elumelu, the Chief Executive Officer, Transacorp & Woodlock Consortium, that invested in the Ughelli Power Pant, urged the government to resolve the outstanding labour issues.

    “The Hon. Minister has said it will be concluded before the end of June. Some of us are ready to pay the balance of 75 per cent today and go on. But we do not want the labour issue to affect us,“ he stressed.

    Already, the Federal Government has appropriated N45billion in the 2013 budget for settlement of labour arrears. President Goodluck Jonathan approved N348billion for the same payment.

    The deficit, said the Chairman, Presidential Task Force on Power (PTFP) Dagogo Jack, could be raised from other sources, such as proceeds of the PHCN privatisation.

    He said: “There are other sources to fund the settlement. If you come to the conclusion that there is only N45billion in appropriation, that means there is no money. You might not be right. It is a government responsibility. You just have to act in good faith that the government will find a way.”

    Nebo said there is an installed generation capacity of 6,000MW, while generation capacity has risen to 5,228MW, with a peak generation at slightly above 4,500mega watts (mw).

    He explained that despite the increase in power generation, the power sector needs a robust transmission grid.“Currently, our transmission grid remains a weak link with a wheeling capacity of about 4,800MW,” he said.

    He pointed out that with the government’s policy to achieve 10,000MW in 2014 and 20,000MW in 2016, the need to expand the transmission capability is imminent.

    He said: “A total capital outlay $3.4billion is required up to 2016 to bring our transmission grid to evacuate all the generated power. Government is working out the funding of Transmission Company of Nigeria’s (TCN’s) long term expansion plan for a mix which will include the Transmission Development Fund, International Development Banks and multilateral agencies.”

    Jack listed the foreign organisations involved in the funding of the power sector to include Chinese, German and of Japanese origin, saying they offered very low interest rate in the transaction.