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FG to Use Privatisation Proceeds to Pay PHCN Workers Benefits


News » Business
Abuja

Image: Prof. Chinedu Nebo

May.02, 2013

 

A large chunk of the privatisation proceeds from the sale of 17 successor companies created out of the Power Holding Company of Nigeria (PHCN) will be ploughed back by the federal government to pay the severance entitlements of workers of the defunct PHCN, Minister of Power, Prof. Chinedu Nebo has said.
Nebo noted Wednesday at a briefing in Abuja that the government plans to augment its statutory budget for settlement of severance entitlements owed to PHCN workers with whatever fund it realises from the privatisation of the PHCN assets.

He stated this to clarify obvious gap in governments’ budgetary allocation for the payment of severance entitlements of the workers in the 2013 budget which is pegged at N45 billion as against the approved sum of N384 billion required to offset labour entitlements in the privatisation process.

The minister, who spoke on various contemporary challenges of Nigeria’s power sector, also explained that the government in addition to shopping for $3.4 billion financial outlay to strengthen Nigeria’s electricity transmission network, is also seeking to commit huge finance in developing a 765 mega volt amperes (MVA) super grid transmission network for the country.

Accordingly, the government estimates to garner about N394 billion as proceeds from the sale of the 17 successor PHCN companies, out of which a larger chunk of it will be ploughed back into settlement of labour entitlements as agreed between it and members of the PHCN unions.

“With regards to the electricity workers, Federal Government has earmarked N384 billion for pay-off of the staff and provided N45 billion as was rightly said, the proceeds of the sale of these companies will fund the rest.

So, already, Federal Government has taken that bold step, the only unfortunate thing is that almost all the proceeds will go into paying-off the staff and nothing will be left for developing the transmission and distribution network,” Nebo lamented.

Speaking further on the super grid transmission network for which the government is shopping for funds from international financial sources, Nebo said: “There is no way the Federal Government alone will find the fund to give Nigerians the super grid transmission network that we need.

Just to meet our current transmission demands, we need a minimum of $3.4 billion and that money is not easy to come by. We need international funding organisations that will partner the government to develop that which is why we needed a management company to attract that kind of investment; the management contractor is expected to help bolster investment in our transmission network.”
The minister equally stated that ongoing resuscitation works at the Kainji and Jebba hydro power plants are expected to bring in additional megawatts of electricity into the national grid by the year end, adding that President Goodluck Jonathan by his commitment to reforms in the power sector has signed a social contract to provide sustainable electricity to Nigerians.

Nebo in refutal of government’s alleged disregard of extant agreements in the power sector especially with regard to existing disagreement between the Bureau of Public Enterprises (BPE) and Geometric Aba Power Limited over the power supply exclusivity right of PHCN Aba and Ariaria business units noted that:  “Right now, Aba is ring-fenced and that is what the contract says, so that the Aba power plant will be able to feed the entire Aba/Ariaria area as agreed and licensed to Aba power plant and Geometric power.

It is just that the government did not exercise that area and sell it completely to the power plant as the owners would want but it is ring-fenced that whatever power will come from that will be sold to the area and I will say that government intends to honour that agreement.”

Meanwhile, the Nigerian Electricity Regulatory Commission (NERC) has denied that it is currently insolvent and unable to meet up with its statutory financial obligations.

NERC in its condemnation of a news report in a national daily yesterday, which alleged that it is bankrupt and cannot pay salaries of its staff, stated that the report was untrue and an attempt to smear its reputation
.
Chairman of the commission, Dr. Sam Amadi said in response to the claim yesterday in Abuja that: “Our checks show that NERC does not owe its staff any salary arrears.”

He noted that the reference to a disgruntled contractor who took the commission to court was actually an attempt to force it to make payments for a disputed transaction that predates the current leadership of NERC.
“The case is still in court and the transaction was not about the purchase of vehicles and has nothing to do with President Goodluck Jonathan,” Amadi noted.

He also revealed that NERC is financially strong with duly audited accounts from its authorised auditors, adding that the report was a deliberate act of  mischief.
The report had stated that NERC was in deep financial mess following a court injunction that froze its Ecobank and First Bank accounts following an alleged N250 million debt owed   a contractor that had supplied it 22 vehicles under its former sole administrator, Alhaji Imamuddeen Talba.

 

Article Credit: Thisday Newspaper

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Updated 6 Years ago
 

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