We can’t conclude PHCN workers’ payment by August 21 – Nebo

 

…As DISCOs urge FG to resolve labour issues

From DENNIS MERNYI, AbujaThe Minister of Power Professor Chinedu Nebo disclosed that government cannot settle all entitlements owed former workers of the Power Holdings Company of Nigeria (PHCN) before the final date of 21st August, 2013 earlier announced.

He stated that though, government has commenced payment of the workers entitlements and settlement of other labour issues involved, it will be impossible for it to complete the payment by next week, citing difficulties with the labour unions in reaching certain conclusions.

The minister stated in Abuja Tuesday at the DISCO Roundtable meeting with the preferred bidders of the 11 distribution companies has already put the government and the DISCOs on collision part as the companies urged government to finalize its obligations to the PHCN employers on 21st August to enable them draw down on funds from their lenders who are expecting evidence of the payment and settlement of the workers by government.

 

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Fresh fear over electricity privatisation

 

• New owners give terms for payment

• Tax holiday, shift in date top demands

• Lenders not willing to fund projects

• $1.6b from sale of 10 NIPP plants goes to TCN

ABOUT one week to the August 21 deadline for the new owners of the nation’s electricity distribution companies to make their 75 per cent balance payment for the utilities, there is fresh fear that all may not be well, after all.

Indeed, the new owners Tuesday gave strong indications that the date would not be possible, urging government to consider a further shift.

That is not all. The private investors have decried the attitude of lenders who are no longer able to guarantee them funds as previously agreed due to lingering issues of labour. They have, therefore, given government a litany of conditions to put the privatisation process back on course.

Under the auspices of Disco Roundtable, the new owners stressed the need for government to recognise the electricity sector as an infant industry worthy of nurturing and consider giving them a tax holiday of five to 10 years.

Speaking on behalf of the group, former Chairman of the Nigerian Electricity Regulatory Commission (NERC), Dr. Ransome Owan, asked government to conclude all labour issues and meet all conditions before August 21; release subsidy fund contained in the Multi-Year Tariff Order (MYTO) model for each of the distribution companies under new owners; fund the Transmission Company of Nigeria (TCN) adequately; issue an extended five to 10 years special tax holiday for electricity distribution akin to the telecoms start-up assistance to mitigate tariff increase and high cost; and extend the longstop date to September 21, 2013 to allow for the full satisfaction of all conditions by government.

He went on: “It is a condition precedent (CP) that the Discos would be handed over free from all legacy liabilities. Our lenders are mindful of this and are reluctant to approve loans and condition drawdown. Therefore, it is vital for full payment obligations to the current PHCN employees to be finalised by the longstop date of August 21, 2013. Lenders expect evidence of these payments before we can draw down on funds to complete our payments.

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Power privatization: Banks unwilling to release fund, says new owners

 

 

Banks in the country are unwilling to lend funds to the preferred bidders of the 11 privatized Electricity Distribution Companies due to uncertainty associated with the settlement of entitlements of former Power Holding Company of Nigeria (PHCN) workers.

The owners of the DISCOs, who made their plight known to the minister of power in Abuja yesterday, urged the federal government to complete the Condition Precedent (CP) of the privatization process, and extend the Long Stop Date to September 21.
Chairman of the Distribution Companies (DISCO) Roundtable, Dr. Ransome Owan, at a meeting with the Minister of Power, Prof. Chinedu Nebo, said, “We pray the minister to conclude all labour issues and meet all CPs before August 21st.”

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Power firm bidders may not meet payment deadline

 

The hope of an early completion of the privatisation of the power sector is being threatened by the inability of the Federal Government to settle all outstanding labour issues at the Power Holding Company of Nigeria and the subsidiary companies unbundled from the utility firm.

The preferred bidders of the 10 electricity distribution companies slated for privatisation on Tuesday demanded that the Federal Government must complete the payment of the severance benefits of the workers of the PHCN before August 21.

Speaking under the aegis of the Roundtable of Distribution Companies, a trade association formed by the successful bidders, they said they might not pay the outstanding 75 per cent of the bid sums for the Discos before the August 21 deadline if outstanding labour liabilities were not cleared.

However, the Federal Government has said it is not feasible for it to clear the N400bn entitlement of the PHCN workers before the stipulated date.

 

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PHCN investors give condition for 75% outstanding payment

 

The Roundtable of Electricity Distribution Companies (Discos) yesterday urged the Federal Government to complete the payment of the Power Holding Company (PHCN) severance package for disengaged staff before the August 21, 2013 date set for the completion of payment from the investors.

Following the National Council on Privatisation (NCP) dateline for the privatisation of the Discos, the investors are expected to pay the balance of 75 per cent for the purchase of the entity on August 21.

But the Disco Roundtable, yesterday told the Minister of Power, Prof. Chinedu Nebo that lenders are insisting on verifying the evidence of the payments before lending them fund to complete the outstanding 75 per cent payment.

Chairman of the Roundtable, Dr. Ransome Owan, said: “It is a condition precedent that the Discos would be handed over free from all legacy liabilities. Our lenders are mindful of this and are reluctant to approve loans and condition draw down. Therefore, it is vital that full payment obligations to PHCN employees be finalised before the Long Stop Date of August 21, 2013. Lenders expect evidence of these payments before we can draw down on funds to complete our payments.”

 

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Power Privatisation: Investors Give Tough Conditions To Balance Bid Payment

 

Preferred bidders for the 10 privatised distribution companies (Discos) yesterday gave the federal government tough conditions which must be met before they can pay the balance 75 per cent bid prices. The investors had already made an initial 25 per cent part payment for the companies and are expected to make the final payment on August 21, 2013 before taking over the utilities in September, the Ministry of Power said. This position however conflicts with the Bureau of Public Enterprises (BPE) timeline, which indicates that deadline for the payment of the 75 balance expires on September 21, 2013. Recall that BPE Director General, Benjamin Dikki had recently said deadline for payment of the balance is September 21. 

 

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Power: Bidders for Discos Seek Extension of Payment Deadline

 

Minister of Power, Prof. Chinedu Nebo
•Nebo advises investors to pay up TCN to get $1.6bn from proceeds of NIPPs
Chineme Okafor

The preferred bidders of the 10 distribution companies (Disco) carved out from the unbundling of the Power Holding Company of Nigeria PHCN (PHCN) Tuesday stated that unless the federal government met their conditions they might not be able to pay the outstanding 75 per cent bid price and take over the distribution assets.

The bidders also requested an extension to the payment deadline just about two weeks before the expiration of the deadline set by the National Council on Privatisation (NCP) for the payment of the outstanding balance.

But the Minister of Power, Prof. Chinedu Nebo, has said government would only make realistic adjustments that are consistent with its PHCN privatisation timelines, reminding the bidders that adjustments had initially been made necessitating changes in the deadline for...

 

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