There are indications that the privatization of the power sector by the Federal Government may suffer a setback following controversy over the payment of PHCN workers entitlement. MOSES JOHN, JULIET ALOHAN and TAIWO OGUNMOLA write.
It is no longer news that the Federal Government is determined to give the nation’s power sector a new lease of life by bringing in private investors through the privatisation programme that will ensure steady power supply in the country.
To actualised this, government through the Hassan Sunmonu-led negotiation committee has been negotiating with workers of the power sector for the past 14 months with a pledge that government would not proceed with the handover of the 18 successor companies unbundled from the Power Holding Company of Nigeria (PHCN) until all labour issues have been resolved.
But with the way and manner Federal Government drafted in the Military to the facilities of Power Holding Company of Nigeria (PHCN) last week without paying up the pension/gratuity of the workers, gave both experts, workers and other Nigerians concern whether government is sincere in the privatisation programme.
With over 50,000 workers of the PHCN due to be laid off in the exercise, industry watchers say it is important for government to pay the workers their entitlement as promised before handing over the facilities to the buyers.
The agitating workers also see the issue of privatisation as a hurried plan by the Federal Government to achieve an alleged hidden agenda ,especially with revelation that PHCN’s total assets worth N1.5trillion was undervalued at N200billion which federal government plan to give to buyers for peanuts.
Labour unions in the sector, National Union of Electricity Employees (NUEE) and Senior Staff Association of Electricity and Allied Company (SAEAC), have insisted that if government fails to respect agreement, it means the government is not serious with the privatisation of PHCN.
General Secretary of NUEE, Joe Ajaero said the money they are asking for is not something that should be difficult for government to pay, saying PHCN is not a sector where workers queue to collect their money.
Ajaero explained that during the 14 months long negotiation between the Federal Government and labour unions that ended without concluding the most important issues of severance payment, gratuity and pensions, turned to a mere drama as Government made renaged to turn down workers request because it claimed it has no money to pay workers for assets of PHCN worth N1.5trillion, now to be valued for N200billion.
“The building assets, transformers, transmission cable lines, cars, poles of PHCN nationwide that is now valued for N200billion, though Government claimed the company liability is N400billion, when put together as total assets of PHCN is worth N1.5trillion” , he said
He also affirmed that the new tariff regime introduced by Government has jacked up the monthly revenue of PHCN from over N18billion to N25billion to give the purported buyers’ safe landing to acquiring the assets.
Ajaero, who is the Deputy President of the Nigeria Labour Congress (NLC), called on “the Federal Government to sell PHCN to the workers for the planned N200billion to investors, stressing that the superannuation fund of 25 per cent deducted from workers, meant for pensions and gratuity in PHCN stood at N400billion in June 2010, which Government has not accounted for, can be used to settle for PHCN, and the balance paid back to workers”.
On his part, President of SSAEAC, Bede Opara, who kicked against proposed plan by Government to merge gratuity and pension to be paid as severance in line with the new pension reform Act 2004, insisted that “Government must pay workers gratuities as end of service benefits in line with the stipulations of condition of service which PHCN operates with its workers before now”.
“Government must pay appreciable severance package as it is the practice all over the world”, he added
“Government must pay workers; pensions in accordance with the 25 per cent set aside from salaries of PHCN staff for the settlement of all workers’ benefit continuation of the exercise practice in PHCN in the past years”, he further said.
Opara, while calling on the Federal Government to stop forcing workers in PHCN to open Retire Savings Account (RSA) when the payment of workers’ benefits is yet to be finalised said; “It would be foolhardy for Government to claim at this time that it has no money to finance its privatisation programme by paying its labour liabilities”.
“The same Government that has enough money to mount media campaign and attack on the unions at the onset of its programme is now claiming that it has no money to pay our benefits thereby attempting to shortchange us on our entire request”, he added.
When asked what the workers will do if government fails to meet their yearnings, the workers maintained that they are ready to fight the battle to the end except government paid the money.
On the new tariff, Opara said the consumers are still complaining that they have not gotten the new material and “I sure that they are working on it”.
He added that those who distribute utility bills are being harassed by the public, who claim they are not getting commensurate power supply.
The union leader said from the survey carried out, members of the public are lamenting the new tariff though they have no option but to comply.
The workers are anxiously waiting for the government to commence the payment as early as possible before the commencement of privatisation of the sector.
On the payment of the severance package of the workers, Minister of Power, Professor Berth Nnaji recently set up an 8-man committee to investigate the status of pension in the power sector, following issues he said were discovered in the course of negotiations with the workers.
According to him, “PHCN pensions have not been operated the way it should be, in line with the Pensions Reform Act of 2004, and for some reasons PHCN workers want to follow the scheme which is against the law’.’
Nnaji explained that the existing scheme is unacceptable to government as it contravenes the 2004 PRA and insisted that with effect from July 1, 2012, PHCN must operate its pension scheme in line the 2004 pension reform act.
The Committee is under the Chairmanship of Mr. J.O Ajibade, former Auditor General of the Federation, while members are Babayo Shehu, representing the Accountant-General’s office, J. O. Chukwu, ministry of Works, V. A. Zafi, Office of the Head of Civil Service, Nicholas Agbo, SA (Labour) to the Minister of Power.
Others are Abbo Mamman, National Pension commission and Mrs. Adetutu Shoetan, Legal Adviser, Ministry of Power, while Dr. Sam Agbogun, managing Director, Nigeria Elecetricity Liability Management Company is the committee’s Secretary.
The Committee’s terms of reference is to investigate the status of pension in the power sector vis-à-vis the pension laws, identify officers involved in any act of misconduct, review the report of the Agari committee on pension matters and recommend measures to guard against occurrence of similar incidents in the future as well as sanctions to be taken against culprits.
But analysts are worried as to why government would wait till the tail end of the reform process before instituting such a committee. With the committee’s time frame, it is likely to submit its report at the end of August, barely a month to the rounding off of the privatisation process and takeover of the successor companies in October.
Experts are worried about government sincerity regarding the payment of the workers entitlements, given that there might not be adequate time to tackle this issue before the privatisation is rounded off.