The Nation Newspaper

Tag: privatisation

  • Railway workers kick against privatisation

    The planned privatisation of rail will not be in the na tional interest, Nigerian Railway Corporation (NRC) workers have said.

    President of the National Union Railwaymen (NUR), Mr Raphael Okoro, told reporters in Lagos that the government should not privatise rail because it would not enhance the transport sector’s growth.

    A few weeks ago, the Bureau of Public Enterprises (BPE) said after the sector’s reform, the government would grant concession to private operators.

    But Okoro said: “A lesson should be learnt from Britain’s experience whereby the nation’s railway assets were blatantly sold off; most regrettable was the disastrous privatisation of London Underground.

    “Spain is a typical example of high-speed rail transport system that developed astronomically and steadily.

    “Why does the rail transport remain public despite European Union’s cruel pressure to privatise and liberalise it?

    “I strongly believe that the future of Nigeria’s rail system is bright if government still remains its owners.”

    Okoro said public ownership and democratic accountability would facilitate social and economic change.

    He said: “The government must realise that it is only the rail transport mode that can guarantee the social, economic and geographical developments that our nation craves for.”

    A former president of the union, Mr Godwin Ero, also urged the government not to privatise the rail transport sector as it would sabotage the governments’ Transformation Agenda.

    “By privatising railway that is just re-emerging after years of comatose, you want to sack railway again.

    “It is regrettable to have Nigerian Railway Corporation where it is today. The glory of the 70s and 80s has departed carelessly due to neglect from government,” he alleged.

    He said restoring the glory of rail transport system would require strong will and huge funds which no private organisation coudl afford.

  • Investor backs refineries privatisation

    Investor backs refineries privatisation

    A MEMBER of the Integrated Energy Distribution and Marketing Company (IEDL) in charge of the Ibadan and Yola Distribution Company, Captain Hosa Okunbo, has backed the planned privatisation of the nation’s refineries.

    He said the transfer of the ownership of the refineries to private investors will end the nightmare associated with the distribution of petroleum products.

    Okunbo, who spoke at the weekend at Benin Airport in Edo State, said Nigerians should not expect an immediate end to the epileptic power supply being experienced across the country because of the transfer of the sector to private investors.

    He commended the Federal Government for taking the initiative to privatise the power sector, arguing that it marks the dawn of a new era for the economy as it will not only create a competitive market, but provide qualitative service and affordable electricity.

    He said the government is taking the back seat as it should, creating the right environment for private businesses to thrive.

    He said: “The Federa Government should let the refineries go to private investors and things will get better.

    “We just took over most of the DISCOs and GENCOs. It takes time to settle down to actually go into full operations.”

  • PTDF, experts disagree on refineries’ privatisation

    Operators have said sustainable development is required to move the oil and gas industry forward. They spoke at the Sustainability Conference organised by a Non-Government Organisation, Corporate Social Responsibility (CSR-in –Action), in Lagos. The Manager, Public and Government Affairs, Chevron Nigeria, Deji Hastrup said the growth recorded in the industry must be sustained to achieve economic growth. hE said: “In Nigeria, there is a gap between resource availability and the realisation of its potential. We need to recognise that there is no country that can develop without energy.” An official of the Shell Petroleum Development Company, Dr Uwem Ite, said: “Sustainable development is not about one group, but about partnerships amongst different stakeholders.” The Chairman, Petroleum Technology Association of Nigeria (PETAN), Emeka Ene, said: “The importance of building trust with indigenous communities cannot be overemphasised.” The President, Movement for the Survival of Ogoni People (MOSOP) Legborsi Saro Pyagbara, said: “The monies spent by oil companies do not translate to impact on the ground. Communities must be elevated to the status of equal partners in sustainability discussions.”

  • ‘Power privatisation process faulty’

    ‘Power privatisation process faulty’

    A Peoples  Democratic Party (PDP) chieftain, Dr Katchy Onojuju has criticised the ways and manners in which the assets of the Power Holding Company of Nigeria (PHCN) were privatised.

    The Bureau of Public Enterprises (PBE) had just completed the first phase of PHCN privatisation, a development that resulted in the emergence of 14 power distribution and generation companies.

    Ononoju, in a statement titled: ‘’ Power Assets Privitisation: Bending the Rules Is Dangerous ’’, said the process leading to the sales of the six generation companies and 11 distribution companies was not in order. He said the assets were privatised to satisfy the yearnings of members of the ruling party.

    Ononuju said PDP is noted for bending the rules to satisfy certain powerful interests, even when their competence has been called to question.

    He said the Bureau of Public Enterprises and National Council on Privitisation undermined its own rules in the case of Enugu Distribution Company and Sapele Generation Company, adding that the development was capable of eroding confidence in the entire exercise.

    He said: ‘’ In the case of Sapele, somebody bid for $201million and do not have the money to pay for it. If they could not pay for it all this while, then the other people that come second should be called on to automatically come and pay and move on. Instead of behaving like this, they are keeping the assets for certain people and bending the rules. It is fraudulent because things are not being done according to the rules that were set to ensure transparency and it is wrong.

    Ononuju added: ‘’It costs about $2million to do due diligence to acclaim all those who came to bid and if you start undermining the rules in the middle of the game, they are not going to come back. And we are doing this just for the initial phase of the process that we envisage will get us 40,000 to 80,000 megawatts of electricity. So, what we are doing is small compared to what has to be done to get Nigeria to that target. Our international partners who have come to participate in this with us today will not have confidence in anything we do tomorrow.’’

    According to him, companies that have shown profound lack of capacity to raise the required bid money to purchase the power assets can not be trusted to raise working capital and funds to upgrade the assets.

    He praised the government for demonstrating the political will to privatise the power sector.

    ‘’After initial delay and some uncertainty, the National Council on Privatisation (NCP) last month approved the payment of the remaining 75 per cent of 14 out of the 15 bidders for the acquisition of the 15 Power Holding Company of Nigeria (PHCN) successor companies.

    ‘’Rising from its sixth meeting in the year, the NCP approved the late payments by North South Power and Interstate Electric Limited for Shiroro Power Plc and Enugu Distribution Company Plc respectively but subject to the late payment penalty as provided in clause 12.20 on interest for late payment and clauses 5.5, 5.5.1 and 5.5.2 of the Share Purchase Agreement (SPA).

    According to reports, the NCP had previously approved the payments of the 12 companies which paid on or before the August 21- due date. They include Amperion Power Co. Ltd (Geregu); Transcorp/Woodrock (Ughelli); Integrated Energy Company ( Ibadan ); NEDC/KEPCO (Ikeja); Vigeo Power Ltd. ( Benin ); Aura Energy Ltd. (Jos); Integrated Energy Company (Yola); Mainstream Energy Ltd. (Kainji);

    Others are West Power & Gas (Eko); Kann Consortium ( Abuja ); 4Power Consortium ( Port Harcourt ) and Sahelian Power SPV Ltd. ( Kano ).

    However, the Council referred the case of CMEC/EURAFIC consortium, the preferred bidder for Sapele Generation Company who had paid $119,887,156 of the $201,000,000 bid consideration to the Office of the Attorney General of the Federation and Minister of Justice for advice. It was gathered that there were legal issues which needed to be resolved.

    ‘’Of particular interest here is the inability or reluctance of CMEC/EURAFIC consortium, the preferred bidder for Sapele Generation Company, to fulfill payment terms binding its successful bid.. It has emerged that the company started developing cold feet after it realise it had grossly over bidded by its $201,000,000 million bid far higher than the reserved price to $106 million and JBN-NESTOIL 106.500 million dollars which automatically made JBN-NESTOIL the reserve bidder. Government reserve price was pegged at 106 million dollars. Faced with the difficult task of raising the funds to beat the August 21 deadline for the payment of balance 75percent, the company developed cold feet and consequently failed to make any payment but only managed to pay $119million after the deadline had lapsed. Two clear months after the expiration of August 21 deadline, CMEC/EURAFIC consortium is yet to make whole its bid.

  • ‘Labour issues yet to be resolved in PHCN privatisation’

    The National Union of Electricity Employees, (NUEE) has refuted claims by the Minister of Power, Prof. Chinedu Nebo, that labour issues with the Power Holding Company of Nigeria (PHCN) workers has been resolved.

    Recently, the minister said the Federal Government had resolved outstanding contentious issues with the workers.

    But the Lagos State Chairman of NUEE, Comrade Adeleke Ibrahim, maintained that the core labour issues had not been settled, noting that the minister had made similar pronouncements in March, this year.

    He said: “In March, this year, the Minister of Labour said Labour issues have been settled with PHCN workers, but we have not seen anything yet. None of our members have been settled.

    “Recntly, we saw the Minister of Power, Prof. Chinedu Nebo on national television saying that labour issues have been settled and severance payment will be made by the end of July.

    “We will watch and see if government will fulfill their promise at the end of this month (July),” he said.

    Ibrahim, however, admitted that the Federal Government is looking into the severance payment of PHCN workers before handing over assets to investors.

    It would be recalled that the Federal Government had disclosed that it would hand over 15 of the successfully privatised successor companies heaved off the Power Holding Company of Nigeria (PHCN) to their winning investors by the end of this month.

    Meanwhile, Minister of State for Power, Hajia Zainab Kuchi, had earlier hinted that labour issues have been addressed, adding that payment of severance would commence at the end of last month.

    “We are finalising on labour, the labour is what is standing between us and the handing over and all the issues that were there had been addressed. We are about to begin payment, as soon as the payments are finalised by June ending, we will definitely be handing over to the successor companies by the end of July; that is the projection we have here and that is the stance of the BPE which has a timeline which was created with the labour issues in mind.

    “We have taken over all the problems and addressed all the issues, the funding is there for the payment of labour and all we are doing is data computation and as soon as we are done with that the handing over will be done,” Kuchi said.

  • Three months of controversies, hopes

    Three months of controversies, hopes

    The energy sector in the first quarter of 2013 was an interesting mixed grill. Unlike last year, the battle was in the operators’ arena; this year, it shifted to the National Assembly. Initially, it was a fight against 10 per cent Petroleum Host Communities Fund by northern legislators, and later it was that people from the north own over 83 per cent of oil blocks. The National Assembly within the period firmly stood against moves by the Nigerian National Petroleum Corporation (NNPC) to borrow $1.5 billion. However, the power sector privatisation programme recorded some milestones with preferred bidders 25 per cent payment of the PHCN assets they bought. EMEKA UGWUANYI Assistant Editor (Energy) looks at the activities in the sector in the past three months.

    The country’s oil production remained flat at 2.4 million barrels per day in the first quarter. However, the French multinational oil firm, Total awarded a contract for the construction of the floating production, storage and offloading vessel put a cost of $3.2 billion to Korea’s Hyundai Heavy Industries Limited. The vessel will be used for the production of oil from its deepwater asset, Egina field, which is expected to add about 150,000 barrels of oil per day to the country’s production when it begins operation.

     

    Petroleum Industry Bill (PIB)

    The issues in the Petroleum Industry Bill (PIB) took centre stage in the National Assembly, with focus on the 10 per cent Petroleum Host Communities Fund, a provision meant for development of oil producing communities. Northern Legislators vehemently opposed the provision on the grounds that it would put more revenue in the coffers of oil producing states.

    Their stance was, however, punctured by the revelation that a sizable proportion of the nation’s oil blocs and wealth, about 83 per cent, that is, are in the hands and control of northerners. Therefore, the argument was that the 13 per cent and the proposed 10 percent communities fund in PIB are but a pittance when compared with what the oil blocks owners earn, especially when compared to the grave environmental and health hazards the oil producing communities go through.

    Considering the fact and validity of the argument of the southern lawmaker, the PIB passed second reading at the National Assembly, and it is believed the legislators will pass the bill into law soon, to move the petroleum industry forward.

    Another issue that made the round in the the review period, was the plan by the Nigerian National Petroleum Corporation (NNPC) to borrow $1.56 billion from a group of local and foreign banks to pay debts incurred during transactions with foreign oil marketers. The issue lingered in the National Assembly with a couple of invitations to the management of NNPC by the lawmakers seeking explanation for the loan.

    The management of the NNPC, in one of its appearances before the lawmakers, explained that the $1.56 billion was not a loan, but a forward sales arrangement to offset accumulated legacy liabilities incurred as a result of crude oil and product losses, pipeline vandalism and demurrage on products in the strategic reserve stock.

    The Group Managing Director of the NNPC, Andrew Yakubu, stated this while making a presentation to the House of Representatives Joint Committees on Petroleum Resources (Upstream), Petroleum Resources (Downstream), Aids, Loans and Debt Management and Justice in Abuja.

    Yakubu said: “The non-reimbursement by Federal Government of the petroleum products price differential to NNPC has gradually led to accumulated and unpaid petroleum products invoices of about $3.5 billion.” He added that petroleum products importers have become agitated over the non-payment of their petroleum products invoices some of which were over three years old and the exposure of domestic banks is about $1.5 billion, noting that default of this magnitude of exposure could lead to another round of banking crisis.

    Crude oil theft and pipeline vandalism continued unabated in the first quarter of the year to the extent that President Goodluck Jonathan has commenced to collaborate with leaders of other countries to help fight the menace. Jonathan held a meeting with the Prime Minister of Britain on the issue while other measures are being planned internally to check the crime. A source told The Nation that the Presidency said it would use diplomatic resources to ensure that it makes it easy to track and identify stolen crude from the country in order to discourage the thriving activities of oil thieves.

    Another concern in the first quarter was the production of oil and gas from shale formations by the United States, a major consumer and importer of Nigeria’s oil. There was concern that the development would lead to substantial drop in volume of Nigeria’s oil export and price. It was reported that breakthroughs made by advance countries including the United States in terms of extraction of oil and gas from shale formations would position the United States from a consumer to a net exporter of oil and gas by 2030, which top officials of the NNPC proved wrong.

    Shell Petroleum Development Company (SPDC) declared force majeure on Bonny Light following shutdown of Nembe Creek Trunkline (NCTL) after it discovered leaks on the pipes caused by vandals.

     

    Downstream

    The arrest, interrogation, prosecution and trial of alleged oil marketers fingered to have fraudulently collected fuel subsidy claims continued in the first quarter, while the bulk of fuel import still remained with the NNPC as a result of non-payment of arrears of subsidy to purported genuine marketers by the government.

    Vandals continued to attack System 2B pipeline, a major petroleum products distribution facility, at Arepo community in Ogun State. Yakubu said the corporation was losing about N600 million worth of fuel to vandals through the Arepo axis per week. In view of the losses and frequency of attacks on the asset, NNPC has begun horizontal and directional drilling which would enable the pipes be buried deep below the surface to prevent vandals from accessing the them.

     

    Power

    A substantial progress was made in the power industry in the first quarter of the year. The commencement of finalisation of negotiations of transaction documents between the Federal Government and the preferred bidders for Power Holding Company of Nigeria (PHCN) successor generation companies (Gencos) and successor distribution companies (Discos) began on January 15, in Abuja after receipt of bank guarantees for 15 percent by the Bureau of Public Enterprises (BPE).

    But before end of the quarter, 14 preferred bidders of 10 distribution and five generation companies unbundled from the PHCN have paid 25 per cent value of the assets they submitted bids for, which is $559,445,573.96. While the 14 preferred bidders shop for the remaining 75 per cent cost to complete payment for the assets, which is a condition they will meet before handover of such assets, the BPE is progressing with the process of selling the remaining one generation and one distribution companies that were not sold alongside others for the failure of the bids submitted for their acquisition to meet stipulated criteria.

    The preferred bidders have been given six months to pay the remaining 75 per cent as the Federal Government strives to settles it liabilities, such as payment of severance package to the PHCN workers. The BPE said: “All the preferred bidders for the 15 PHCN successor companies have met the deadline for the payment of the mandatory 25 percent of the offer value of their bids. As at March 21, 2013 deadline, the Bureau had received $559,445,573.96 from 14 bidders for the 15 successor companies.”

    The BPE said it received $32.25million from Vigeo Consortium for Benin Distribution Company; $31million from 4Power Consortium for Port-Harcourt Distribution Company; $31.5 million from Interstate Electrics Limited for Enugu Distribution Company; $27,913,633.50 from North-South Power Company for Shiroro Power Plc while Transcorp/Woodrock Consortium, paid $75 million for Ughelli Power Plc; CMEC/EUAFRIC Energy JV, paid $50,249,965 for Sapele Power Plc; $41 million from Kann Consortium for Abuja Distribution Company; $20,464,968.15 from Aura Energy for Jos Distribution Company; Mainstream Energy Limited paid $59,467,500 for Kainji Power Plc; and Sahelian Power SPV paid $34.25million for Kano Distribution Company.

    Others are: Amperion Power Company Limited, which paid $33 million for Geregu Power Plc; Integrated Energy Distribution & Marketing Company, $42.25 million and $14.75 million for Ibadan and Yola Distribution Companies respectively; NEDC/KEPCO paid $32.75 million for Ikeja Distribution Company; and West Power & Gas, paid $33.75 million for Eko Distribution Company.

    Following directive by the Vice President, Namadi Sambo, that projects under the National Integrated Power Projects (NIPP) be completed by end of this year, the Niger Delta Power Holding Company Limited (NDPHC) owners of the National Integrated Power Project (NIPP), has delivered several distribution and transmission projects across the country while power plants under the NIPP are capable of supplying over 2,000MW of electricity.

    Most of all, the Minister of Power, Prof. Chinedu Nebo, was appointed as the minister in February, six months his predecessor resigned and the former Director-General of BPE, Ms Bolanle Onagoruwa, was also sacked within the quarter by the Federal Government.

  • N2.7b ALSCON liability: Unions seek review of privatisation

    The Metal Products Senior Staff Association of Nigeria (MEPROSSAN) and the Steel and Engineering Workers Union of Nigeria (SEWUN) have petitioned the Chairman of the National Council on Privatisation (NCP), Vice-President Namadi Sambo, seeking the review of the privatisation of the Aluminium Smelter Company of Nigeria (ALSCON).

    They also sent the petition to Senate President David Mark and House Speaker Aminu Tambuwal.

    They said the core investor, RUSAL, has not complied with the guidelines on privatisation.

    Apart from non-settlement of a N2.7billion liability to ALSCON workers, they alleged, the plant is dying.

    The unions made their position known in a petition signed by Stanley Inyang (Chairman MEPROSSAN); Linus Usen (Chairman SEWUN); Akpan Monday (General Secretary, MEPROSSAN); and James James (General Secretary, SEWUN).

    The petition, obtained by our correspondent, reads in part: “The reduction facility, which is the major engine room for the production of aluminum has been grounded due to the absence of any functional crane for operations. Nine cranes were inherited in 2007 but as at today, not even one is working. This has resulted in the loss of 30 pots.

    “An automated plant as was designed has become a manually operated plant with some equipment scrapped to service others instead of procuring spare parts.

    “As of today, the management of RUSAL has not invested enough money in the plant that it is claiming ownership.

    “All spare parts inherited have been used up. And instead of procuring new ones to service the plant, we see a situation where if an equipment or machine breaks down, it is abandoned for the one on standby and when the next one, they vandalise the broken down one to service the other.

    “This practice has led to the cannibalization and scrapping of a greater percentage of equipment they inherited in good condition and turning an automated plant to a manual one thereby making operations more labour intensive and very hazardous.

    “Nigerians have laboured against all odds that the plant is kept alive and they have achieved huge success but there are limits to which human efforts can battle against technical shortfall, in the face of the prevailing lack of spare parts.

    “As you are aware, machinery and their components (mechanical, electrical, electronics etc) have designed service lifespan and must be replaced when due, failing which imminent breakdown cannot be avoided.”

    The unions criticised non-settlement of a N2.7billion liability by RUSAL.

    The petition added: “The total liability for 1,800 staff as you area aware is about N2.7billion only. The Federal Government should ensure that this liability is completely paid off, otherwise the staff will resist any handing over.

    “Your prompt response and action is highly solicited so as to save ALSCON from total decay. Additionally, we wish to remind you that it is nearly six years now after the privatisation of ALSCON was completed and the plant handed over to the new investor-RUSAL.

    “But, contrary to the labour provisions in the privatization guidelines of the National Council on Privatisation (NCP) regarding settlement of staff claims and liabilities in privatised companies before handing over to the core investor, these liabilities in ALSCON were not settled and have not been settled and therefore these liabilities have to be settled before the Supreme Court judgment is implemented.”

  • PHCN privatisation: Now that Nnaji is gone

    PHCN privatisation: Now that Nnaji is gone

    When Prof Barth Nnaji left as Minister of Power in late August, it was not clear whether he jumped or was pushed. Most guesses including mine, however, was that he was pushed, if only because his departure was rather too sudden.

    The terse two paragraph announcement of his departure by the spokesman for President Goodluck Jonathan, Dr. Reuben Abati, hardly suggested the minister left on his own. “President Goodluck Ebele Jonathan,” Abati said, “has accepted the resignation WITH IMMEDIATE EFFECT of the Minister of Power, Prof. Barth Nnaji.

    President Jonathan thanks Prof Nnaji for his services to the nation under the present administration and wishes him well in his future endeavours.” (Emphasis mine)

    Presidents don’t go about accepting the resignations of their sidekicks with immediate effect and without saying why.

    In this case, the President did say why eventually but his reason hardly suggested that Nnaji jumped. In any case, sudden resignations are very unusual ways to depart lucrative jobs like ministering to a country’s electricity power supply.

    Nnaji left on August 28. It took the President two days to say why. This was on August 30 during a town hall meeting in Onitsha after he’d inaugurated the town’s inland river port complex. “Barth Nnaji,” he reportedly said, “has not committed any offence. He is a very competent and seasoned professional.”

    However, before seemingly exonerating the minister, the president made an oblique reference to the issue of conflict of interest involving not just the minister but probably other senior government officials as well. “Before we started this privatisation,” Thisday (August 31) reported him as telling his distinguished guests, “some major stakeholders who had access to me, came to me and said, ‘Mr President, we heard all these privatisation of projects in the power sector had already been shared among the people and we want the president to assure us so that we do not waste our time.’ I said, ‘no you can keep faith in the process.’”

    The minister, the President reportedly said, had willingly declared his interest in two companies that had bid for Afam Power Station and for Enugu Distribution Company. This, he said, was what gave rise to a conflict of interest that made the minister resign in order to safeguard the privatisation exercise. Obviously, it was contradictory for the President to say his minister did nothing wrong and yet point at the conflict between his private interest and his public duty as the reason why he “resigned.”

    The President did not say when Nnaji declared his private interest in the privatisation of the Power Holding Company of Nigeria (PHCN), but anyone familiar with the exercise knows the minister’s conflict of interest did not arise yesterday. It goes all the way back to the time of the President’s immediate predecessor, the late Umaru Musa Yar’Adua, when the minister was his special adviser on energy. That conflict of interest had been a source of serious, and a times violent, conflict between Nnaji and both management and workers of the PHCN.

    The minister could, therefore, not have resigned simply because the President suddenly discovered his private interest was in conflict with his public duty; the conflict had been there all along. From the President’s oblique talk about some VIP stakeholders’ worry about the integrity of the exercise, a more likely explanation could be that the private interest in the exercise of some officials more powerful than the minister simply trumped the minister’s.

    In which case it should be obvious that Nnaji’s resignation alone has hardly solved the problem of the conflict of interest of government officials responsible for the exercise.

    When the president announced on August 28 that he had accepted the “resignation” of his minister, he said he would replace him quickly and with another Igbo. It’s now mid-October and Nnaji is yet to be replaced at all, never mind with an Igbo compatriot. This undue delay suggests the politics of PHCN’s privatisation has complicated matters for the President.

    If this is the case, the President has only himself to blame; he ought to have known that a policy of allocating portfolios by ethnicity – or for that matter, by state, as seems to be the case with the ministry of defence which has remained vacant since he sacked the last minister, who is from Kebbi State, months ago – is as wrongheaded as it is untenable in a world where competence has no tribe, creed or colour. Not that there are no other Igbos even more competent than Nnaji. There are. But to insist on an Igbo replacement was clearly restricting his choice.

    In announcing Nnaji’s departure as minister, the President praised him for his competence and professionalism. Few would or can question the President’s judgement about the ex-minister’s credentials. However, it misses the main issue which is the integrity of the exercise. The fact is that competence and professionalism are no substitutes for integrity. And it is the dubious integrity of the exercise that has left the country as poorly served today by its power utility company as it was nearly 13 years ago when President Olusegun Obasanjo promised he will turn the sector around.

    Nnaji did little to enhance the integrity of the exercise which, by the president’s own admission, was why the gentleman had to leave.

    The question is would his departure make any difference? It is doubtful that it would, for the simple reason that Nnaji is probably not the only senior government official whose private interest ran counter to his public duty. The evidence is there in the history of privatisation in this country where the commonwealth has largely ended in the hands of senior government officials and their cronies and kins. It is also there in the fact that, as with previous exercises, perhaps the most notorious of which was that of NITEL, the country’s telecommunication company, the assets of PHCN have probably been grossly understated.

    Government ownership of companies may have been discredited in this country but the record of the private ownership in sectors like banking and aviation has given little cause to believe that privatisation is the only solution.

    Elsewhere, among the Asian Tigers – South Korea, Taiwan, Singapore, Malaysia, etc – and in China the world’s emerging economic super power, there is ample evidence that efficiency and profitability is not the preserve of privately owned companies. The evidence is also right here on our continent, where the publicly owned Ethiopian Airline, for example, has shown that public ownership is not necessarily an obstacle to commercial success.

    By all means let’s go ahead and privatise our public companies since they have proved unviable. However, as we do so we must remember that their problem was less the nature of their ownership than the lack of integrity with which they were run.

    Unless the authorities do all they can to guarantee such integrity in the sale of the public companies, their privatised offsprings can only bring even more pain to consumers than was the case before.