Privatisation: PHCN Workers Demand 10% Equity Holding

BEVERLY HILLS, December 01 (THEWILL) – A fresh crisis could be brewing in Nigeria's fragile power sector as ex-workers of the privatised Power Holding Company of Nigeria (PHCN) are haggling for a showdown with the government and the 18 succession companies in the sector over failure to implement some key components of the privatisation laws.

One of such breaches, according to the workers, is the failure to accommodate the 10 percent equity holding reserve for workers of the PHCN as provided for in the privatisation law. Another breech, the workers pointed out, is the non-payment of full entitlements to about 5,000 workers who were left in the processing of severance benefits prior to the sale of the company.

The workers, who are under their umbrella body, the National Union of Electricity Workers (NUEE), say the Federal Government should declare the privatisation of the PHCN illegal and inclusive, saying the process was imbued with fraud that requires thorough investigations.

According to the union, the President Buhari Mohammadu-led government should institute a high-powered investigation into how PHCN was sold, and the people behind the acquisition of this national asset and at what price.

Joe Ajaero, the general secretary of NUEE, who spoke with THEWILL in Lagos, said the union was not against the privatisation of the power sector, but insisted there was something fundamentally wrong with the process and the manner in which PHCN was sold.

According to Ajaeo, Buhari should unmask the personalities who bought the assets and seek to know whether there was competitive pricing of these assets.

Ajaeo alleged that “the government under the Peoples Democratic Party (PDP) used the Bureau for Public Enterprise (BPE) to sell PHCN to their cronies, a development he described as disheartening for a struggling economy like Nigeria's.”

He explained that whereas the privatisation envisaged Foreign Direct Investment (FDI) inflow, PHCN was sold without any FDI into Nigeria because funds for its purchase were sourced within. And because Nigerian banks are not known for long-term investment, the buyers of PHCN now under pressure from the banks are passing the cost on electricity consumers. The consequence, he said, is increased tariff and estimated billing, which consumers pay without seeing the light.

He explained that whereas the privatisation envisaged Foreign Direct Investment (FDI) inflow, PHCN was sold without any FDI into Nigeria because funds for its purchase were sourced within. And because Nigerian banks are not known for long-term investment, the buyers of PHCN now under pressure from the banks are passing the cost on electricity consumers. The consequence, he said, is increased tariff and estimated billing which consumers pay without seeing the light.

“For us to take this government seriously in its anti-corruption crusade, it must revisit the process of privatisation of PHCN because government still retains 49 percent equity holding in the company.