2 May 2014

Nigeria: More Electricity Challenges


NIGERIANS complaining over poor electricity supply should brace up for tougher times as the confusion over new ownership of the generating and distributing companies continues. If the agitations of electricity workers are sustained, there would be further disruptions that could lower already poor supplies.

The issues would become more contentious now that the new companies that spawned last year from NEPA, as we commonly knew it, were supposed to have taken over the businesses at the beginning of this month.

A six-month transition contract to assist the new successor companies assess NEPA staff to determine those they would keep has ended. What should be a smooth transition with those not employed disengaged, is brewing a crisis. The Federal Government reportedly paid N380 billion as the entitlement of NEPA workers.

The understanding of the new owners was that it would be at their discretion to decide who to retain. It seems enough questions were not asked about what the Bureau of Public Enterprises did with the privatisation of the electricity sector.

New owners who paid billions of Naira to purchase these power assets cannot recover their investments if they are unable to make critical decisions about the quality and quantity of staff they would engage.

Can the new owners succeed if electricity workers do not allow them to decide how to run their businesses? Retained NEPA staff would have had the double distinction of enjoying their entitlements and working with the new company.

Electricity workers make their case powerfully too. They have started picketing the new companies. According to them, more than 10,000 of them have not been paid their full entitlements. They fear that if they leave, nobody would pay them. They could be leaning on the experience of former Nigeria Airways staff, who have been denied their entitlements since the business was sold in 2004.

They also claim the new owners are turning down the agreement they had with the workers, which provided for consultations before disengagement of workers.

New electricity companies want to recoup their investments. They also want to be the ones to make the important decisions, especially who works for them. Many had expected that many NEPA staff after their huge payouts would have opted for self-employment or stake their interests in other ventures.

Unless government handles this matter with care - by resolving outstanding issues it has with the electricity workers - it is setting up grounds for the failure of another privatisation exercise. Nigeria Airways and NITEL went similar ways.

The impact of the botched privatisation of Nigeria Airways and NITEL was minimal because existing private enterprises took up their places. How would we manage without even the worse form of NEPA?

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