New owners to take over electricity firms Nov. 1 • Presidency directs retention of electricity workers for six months

HERALDING the end of the Federal Government monopoly on electricity generation and distribution, the new owners of the Power Holding Company of Nigeria (PHCN) successor companies would physically take them over on November 1, 2013.
On that day, government’s managers who have held sway at the facilities will give way to private investors who have bought them over. But electricity workers who have hitherto manned the facilities will not be sacked immediately, even though they would have all been paid their entitlements.
In fact, going by the latest information from officials, they will be retained on contract by the new owners for a duration which government insists must be at least six months.
Through the reforms occasioned by the privatisation, which is coming to an end in a few weeks’ time, electricity production will be controlled largely by private entities, distribution fully by private entities, and transmission fully by the Federal Government. Under this arrangement, the operational control of gas production and transmission will largely be in the hands of private entities, while electricity production and distribution will be operationally controlled in full by private entities.
President Goodluck Jonathan had on September 30, 2013 formally handed over its shares in 14 of the 18 successor firms of the PHCN to new owners. And because labor payments and related issues had not been concluded, the actual handover of the utilities to the new owners was scheduled for a later date.
The Bureau of Public Enterprises (BPE) announced Thursday that the new owners would now finally take over operations of the privatised utilities on November 1, 2013.
Speaking at a public hearing and workshop on the regulation of the electricity market post-privatisation, the Deputy Director, Electric Power Department of BPE, Amaechi Aloke, told anxious investors that the physical handover had been approved. He was optimistic that all issues concerning labour would have been settled by the handover date.
He announced that the National Council on Privatisation (NCP) had directed that the nation’s electricity workers must be given a six-month lay-off grace, following which the new owners would be at liberty to disengage and recruit as they deem fit.
On its part, the Nigerian Electricity Regulatory Commission (NERC) has warned that though the new owners paid huge amounts for the facilities, it remained the regulator and that it would not allow them to dictate to it, or to the government.
The Chairman of NERC, Sam Amadi, said: “In making rules, we need to listen to all stakeholders, operators, experts and those that will be impacted by the rules. We will not make rules without the input from those to be affected by the rules. We will write the rules; not the operators or disco roundtable but NERC will write the rules.
“We believe that the operators and consumers do not have irreconcilable interests. Our job is to converge their interests into a single commitment to provide to every Nigerian home and business access to adequate, reliable and safe electricity.”
The Deputy General Manager, Market Competition and Rates at the commission, Abdulkadir Shetimma, presented the draft interim market rules expected to guide the electricity industry between November 1, 2013 when the electricity firms will be handed over to the investors, and February 28, 2014 when the Transitional Electricity Market (TEM) will commence in full.
The Minister of Power, Prof. Chinedu Nebo, had in an interview with sources recently assured electricity workers that the successor companies of PHCN would not be handed over to the new owners until all labour-related issues were resolved.
Nebo spoke in an interview in response to the agitations by labour that the new owners would not be allowed to take possession until government settles their entitlements.
The minister said that government would stick to its own part of the agreements reached with labour and that there was no cause for alarm. He also clarified that what government did on Monday was to transfer its shares in the firms and issue operating licences to private owners. The physical handover, he said, would be done much later (sometime in November) when labour issues would have been resolved.
His words: “We are not going to physically hand over until everyone is fully taken care of. Most of them have now received their severance package but we also need to pay pension package. So, severance package will be given to everyone of them and their pension benefits will be credited into their PFA accounts.
“Once that is done, we know that the severance is complete and then we can physically hand over to all these private companies. I can say that the physical handover has not been made because we need to complete that first.”