Unending ripples over unbundling of PHCN

LIKE other sectors of Nigeria’s
socio-economic existence, the
story of the country’s energy
sector since the Electricity
Corporation of Nigeria, ECN,
ordinance No. 15 of 1950,  has
been punctuated by operational
failures. Although, those in charge
of the nation’s power sector can
claim otherwise owing to some
distant and recent reforms in the
But the sad state of the power
sector, is a common knowledge to
both the learned and unlearned
man on the streets of Lagos and
Lafia, as  almost all Nigerians are
victims of the near absence of
electricity in a country of about
160 million people.
It is for this reason, that a lot of
people are not often bothered
about developments in the sector,
even when such developments
could make darkness give way to
light. This situation is already
playing out, following the
liquidation of the Power Holding
Company of Nigeria,PHCN.
Expectedly, this move would have
triggered diverse reactions from
consumers following the planned
exit of government in its
management, but reverse is the
case. This, to a large extent,
underscored the apathy of the
populace to  happenings in the
sector. In fact, but for the dispute
between, National Union of
Electricity Employees, NUEE and
the Federal Government,FG, not a
few would have been aware, that
PHCN had been buried, leaving in
its trail a lot of contentious issues.
Liquidation of the PHCN: These
issues, Vanguard Features,VF,
findings revealed, bordered on
labour matters, job security of
affected staff, how the reforms
would enhance power generation
and distribution, the role of PHCN
in the new set up, among others.
For instance, it was recently
reported that the government had
concluded plans to sack no fewer
than 20,000 workers of the PHCN
ahead of takeover by successful
bidders of its assets.
Protesting PHCN workers
Though the government had come
out to dismiss the report, fear is
the word among PHCN staff across
the country.
Terminal benefits
While the FG recently announced
that  N384 billion will be used to
settle the terminal benefits of
workers  ahead of the privatization
of PHCN’s assets, the workers led
by  the Senior Staff Association of
Electricity and Allied Companies,
SSAEAC, do not feel comfortable
with the decision. The association
has not only rejected it, but it has
like its NUEE counterpart, gone
further to petition the Minister of
Power, reminding government
that labour only gave conditional
support to the planned
privatization of the sector.
SSAEAC in the petition through its
President-General and General
Secretary, Mr. Bede Opara and
Biodun Ogunsegha, warned
government that if it went ahead
with  privatization without carrying
labour along, it would definitely
be counter- productive.
The petition reads: “In furtherance
of the agreement that the unions
in the power sector signed with
government on December 11,
2013, the Federal Government of
Nigeria through the Bureau for
Public Enterprises, BPE, engaged
the services of an international
consultant, Alexander Forbes, to
compute, using the necessary
variables to arrive at the total
terminal benefits due to staff of
PHCN and also determine the
individual benefits. The unions
were invited to work with the
consultant and BPE, to diligently
carryout this assignment.”
Terminal benefits ontroversy: “At
the meeting with the consultant
that was held on 14th and 15th
January, 2013 in Lagos, our
representatives (of the two in-
house unions) on the computation
of terminal/severance benefits,
reported fundamental
observations/errors in the
computation as follows: The salary
scale used in computing gratuity is
not PHCN salary scale as at June
2012, as agreed with negotiation
team under the leadership of SGF.
“Souvenir entitlement was
omitted in computation of total
entitlements as agreed with
Comrade Hassan Sumonu
Committee, in compliance with
our 2010 Conditions of Service.
The variables used in the formula
for annuity by the consultant are
not realistic: (a) interest rate, (b)
inflation rate (c) discount rate, and
(d) life expectancy of each staff.
Alexander Forbes used:
*5% as inflation rate (pension
increase), instead of current rate
of 12.5%; *14% as discount rate,
while the current rate is 11%. The
data used for all staff are not
correct in addition to unclear
assumed life expectancy of each
worker.” According to SSAEAC:
“We are left with no option than
to bring this to your notice, for
immediate redress by directing
the Consultants through the BPE
to correct these abnormalities to
enable the reform to go on as
planned. While our Union and staff
re-affirm our conditional
acceptance of Government reform
despite our preferred position, we
will not allow our members to be
“Any attempt to the contrary of
the agreement reached will be
resisted by the workers.  It is in
the light of the above that we
were surprised at the
announcement of a N384 billion
approval by the Federal Executive
Council as representing total
terminal benefits to PHCN
“This announcement was grossly
misplaced because the Alexander
Forbes Consultant engaged by BPE
had not concluded his assignment
and no figure had emanated from
his work. We do not understand
the rationale for announcing such
a figure. It should be noted also
that only the unions as
representatives of the workers can
confirm the basis of computations
while individual staff will verify
their data.
Report of the valuers of PHCN
“The proposed issuance of
statements of workers’ terminal
benefits at the exclusion of our
association headquarters by BPE
will be counter-productive. The
earlier this verification of staff
data is done the better for
progress of the reforms. We
remind the government that our
support for the reform is
conditional upon the final
settlement of all labour liabilities,
hence the long period of
negotiations and the resultant
agreement which upheld our
Condition of Service 2010.
It would be recalled that barely 24
hours after the government said it
had approved N384 billion for the
payment of all entitlements of
workers of PHCN, and process of
the payment expected to begin a
day after (21-02-13), NUEE
rejected government position,
threatening to shut down the
industry, should government fail
to reverse its position and
perceived provocative utterances.
Similarly, the General Secretary of
NUEE, Mr. Joe Ajero, reportedly
said: “With all sense of patriotism,
we demand also for the report of
the valuers of PHCN assets and
liabilities which actually came up
with the current value of PHCN
put at N200 billion only.
Valuation of a company like PHCN
should be transparently done with
active participation of all
stakeholders. We believe that this
is the only way credibility and
transparency would return to the
whole privatisation process. This
will enhance investors’ confidence
and those of the international
Puncturing Ajareo’s position, a
retired NEPA staff, Mr. Uchenna
Onyewe, told VF that: “I have
been in that system and I know
why they are always protesting.
This is not the first time that they
are threatening fire because of
privatisation. If you know the
height of sharp practices among
these NEPA civil servants, you will
know why the sector has
remained inefficient. Privatisation
is good if well carried out, with all
parties involved having a fair
Also lending his voice, President-
General of Trade Union
Congress,TUC, Peter  Esele, urged
government to make the funds
available to the workers for a
successful takeover of the various
power assets recently privatised
across the country.
Despite these doubts on the
Federal Government’s sincerity, it
has promised that all issues
concerning labour’s severance
settlement in the sector will be
resolved before the end of June
‘“We are finalising on labour.
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,”
Minister  of State for Power, Hajia
Zainab Kuchi noted.