FG 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.