The federal government yesterday achieved a significant milestone in the ongoing privatisation of the power sector with the formal presentation of share certificates and licences to 15 new core owners of successor distribution companies (Discos) and generation companies (Gencos) created from the unbundled Power Holding Company of Nigeria (PHCN).
The 15 companies which were handed over their share certificates at the Presidential Villa, Abuja, yesterday, by President Goodluck Jonathan include Kann Consortium for Abuja Disco, Interstate for Enugu, Aura Energy for Jos, Vigeo for Benin, West Power and Gas for Eko, NEDC/KEPCO for Ikeja, 4Power Consortium for Port Harcourt, Sahelian for Kano and Integrated Energy for both Ibadan and Yola Discos.
Others are Mainstream Energy, core investor for Kainji and Jebba Gencos; Transcorp/Woodrock for Ughelli as well as North South for Shiroro, while Amperion and NEDC/KEPCO got share certificates for Geregu and Egbin Gencos respectively.
Jonathan, who was accompanied by Vice President Namadi Sambo, minister of power Prof. Chinedu Nebo and director-general of the Bureau for Public Enterprises (BPE) Benjamin Dikki, in handing over the documents to the investors also stated that while he did not expect a sudden turn of events in the power sector, he remained optimistic that better days were here for Nigerians with regards to improved power generation and supply.
While restating government's commitment to providing all required enablement for the new investors to succeed, he said: "To the Nigerian people who have demonstrated such great patience, putting up often with darkness, noisy power-generating sets, the related pollution and the daily disruptions in their lives, I say better days are coming."
To ensure that this becomes reality, he said, the Nigerian Bulk Electricity Trading Company (NBET) has been provided with capitalisation of over $750 million, positioning it to carry out its mandate without financial constraints.
Similarly, he said, arrangements are on-going to ensure that the Nigeria Electricity Liability Management Company (NELMCO) is adequately funded to assume all of the liabilities associated with the privatisation of the PHCN successor companies as well as other related liabilities, adding that various options are also being explored for the funding of the Transmission Company of Nigeria (TCN).
To the labour unions, he said: " It is important to say to our labour partners, who we know to be patriotic Nigerians, that they should not nurse a feeling of displacement but dwell on the tremendous possibilities that the revitalization of the sector holds for them."
He also sounded a note of warning to all relevant agencies to re-orient their staff to play the needed new roles that have been assigned to them as a result of the reform. "They must be prepared to collaborate efficiently with our private-sector partners. Business can no longer be as usual," he said.
Vice President Namadi Sambo, who is also chairman of the National Council on Privatisation, noted that the privatisation of the power utility is unique and different from previous privatisation programmes in the country in that is was driven by the need for efficiency and investment rather than optimization of proceeds to the government coffers. According to him, only bidders' technical ability and financial capability influenced the outcomes.
"The new owners of the generation companies are expected to build up capacity from the present levels of performance to additional 5,000MW within a period of five years. This promise has been clearly captured in the performance agreement that the new owners have with the Bureau of Public Enterprises which will be monitored by the regulator.
As for the distribution companies, he said, the use of the Aggregate Technical, Commercial and Collection (ATC&C) loss reduction programme for the first five years as the privatisation strategy for the selection of core investor was a clear departure from the NCPS's usual practice of awarding companies to the bidder who makes the highest financial offer to purchase an asset after being technically qualified.
"The objective behind this strategy is to provide Nigerian consumers and other stakeholders with specific parameters with which to measure the outcome of the power sector reform and privatisation."
No physical handover till labour issues are settled - FG
Meanwhile, the government has stressed that despite the presentation of the legal documents to the companies, physical takeover of the assets will be done within the course of October upon completion of all labour-related issues.
Minister of power Prof. Chinedu Nebo gave assurance that no physical handing over of the privatised power assets will take place until all liabilities to the PHCN workers have been settled.
Nebo explained that physical takeover of the power assets will be possible within the course of October when the government would have completed payment of severance benefits to workers of PHCN.
"Let me restate that today's ceremony is only a formal handover of all needed ownership certificates and licences. However, physical takeover of assets will be effected later in course of the month of October as we fully discharge our responsibilities to the remaining workers of PHCN," Nebo said.
He added that the slight delay in completing the payment is due to the large number of workers, large sums involved and the need to take all needed caution to ensure proper implementation.
He noted that out of 47,614 PHCN workers who were identified, "we have completed the biometrics capture and related validation of 45,156 workers. As at today, the severance benefits of a majority of that number have been paid while others are being processed.
We will not fail - Core investors
Speaking on behalf of the core investors, former governor of Kano State who is the chairman of Mainstream Power, Col. Sani Bello, noted that the handing over of the firms to the private sector will usher in a new frontier and hope for sustainable power supply to all Nigerians while expressing the hope that agencies of government with oversight functions in the power sector will continue to support the efforts of the new core investors.
"We assure Mr President and Nigerians that we will not fail," he said.
Workers protest handover
However, while the investors were being presented their certificates, the National Union of Electricity Employees (NUEE) staged a protest at the PHCN headquarters in Abuja over unresolved labour issues.
The union's chairman, Comrade James Ayeni, told journalists that government had failed to meet the workers' demands and had gone ahead to hand over share certificates and licences to the investors, thereby undermining earlier agreements reached.
He stated that only 25 per cent of the members have been paid their severance package and added that the union has mandated members to shut down installations to send a signal to government.
US govt, business consultant commend FG
Meanwhile, the United States government has commended the federal government for the continuing success in the privatization of the electric power sector.
The commendation made by the US Charge d'Affaires in Nigeria, Maria Brewer, is connected to the formal handover of share certificates and licences to the new core owners of the Power Holding Company of Nigeria (PHCN) held yesterday at the Banquet Hall, Presidential Villa, Abuja.
Brewer said that the US government will continue to assist Nigeria in its historic efforts to liberalize the electric power sector and ensure regular electricity supply for economic development.
Nigeria has been plagued by epileptic electricity supply which has stunted economic development in the country. It produces less than 3,000 megawatts of electricity for its 160million citizens with over 60million of them depending on electricity-generating sets.
Alli Magashi, chief executive officer, Kitari Consulting, also commended the federal government for seeing the power privatisation through, saying it would see bigger revolution than what was recorded with the privatisation of the telecom sector.
He stated: "This is a very important time for Nigerians. Power has now been handed over to the private sector and, as it was seen in the telecomm sector, that telecom revolution has changed the whole psyche of doing business in that sector. I think power is even going to do more. About $1.3 billion was brought of the finance industry to finance licences of the privatisation of the power assets. There is a lot of money invested by the private sector in the power sector and that is good because they will work to ensure they get their money back."