By Victor Ahiuma-Young
ABUJA — PRESIDENTIAL Task Force on Power, PTFP, yesterday, said the process of winding-up the Power Holding Company of Nigeria, PHCN, has begun and that employees in the corporate headquarters, were being transferred to the Power Ministry.

This came as the task force announced that the Nigerian Electricity Regulatory Commission, NERC, had initiated studies and consultations to determine a level of tariffs that would stimulate investment by making it possible for investors to recover cost, adding that new tariffs would be announced in April 2011.

PTFP, which noted that the transfer of workers from corporate headquarters to the Power Ministry by the end of March, revealed that Power Grid of India,  ESB International of Ireland and Manitoba Hydro of Canada have been invited to submit technical and financial proposals for the management contract of the Transmission Company of Nigeria.

In a statement, Chairman, Communications Committee, PTFP, Dr. Abimbola Agboluaje, said a World Bank Partial Risk Guarantee and a Federal Ministry of Finance Risk Guarantee to compensate against political and other risks and further give confidence to investors were being finalised.

According to him, “winding up of PHCN Central Headquarters: This process is underway. Headquarters staff have started moving out to the Ministry of Power to successor companies.

Functions are being transferred to individual successor companies. The eventual winding-up will be a legal or court-ordered formality, occurring when ongoing staff movements and transfer of assets and liabilities are concluded, probably during Q1(first quarter) 2011.

“The 11 distribution, six generation and 1 transmission companies now have individual budgets.”

The companies are now de facto independent entities, thus putting the PHCN in winding-up mode. All of the PHCN Successor Companies are set to enter the “Transition Stage” of the reform when they will buy and sell electricity based on contracts agreed with each other and stop operating as parts of a government monopoly financed through a common budget and obliged to provide power or electricity evacuation services to each other without payment.

This will create incentives for the power companies to provide service to as many Nigerians as possible as frequently as possible so they can earn money to pay for their inputs and operational costs. The companies will also operate in accordance with the Market Rules and Grid Code overseen by the Market Operator and System Operator under the regulatory supervision of the Nigeria Electricity Regulatory Commission (NERC).”

Adverts inviting companies to submit “Expressions of Interest” in taking up 51 per cent stake (or in the concession) of the 6 generation and 11 distribution PHCN successor companies have been published in the Nigerian and international media. Interested companies are to submit Expressions of Interest by 18 February 2011; shortlisted companies will be invited to submit bids for the successor companies early in Quarter 2 2011 and winning bidders will take over management of the companies by the end of Q 2 2011.”

On labour issues, the statement said: “Arrears of monetisation benefits worth N57 billion has been paid to PHCN workers. The government also secured an additional N143 billion naira from the National Assembly as part of the supplementary budget of 2010 to compensate current PHCN workers for the severance of their current employment contracts with the government.

A Labour Committee chaired by the Honourable Minister of Labour, Mr. Chukwuemeka Wogu, has been established by the Presidential Action Committee on Power (PACP) to ensure that the government fully honours all obligations to current PHCN workers. The Nigerian Electricity Liability Management Company (NELMCO) will be legally obliged to settle any outstanding liabilities after the PHCN Successor Companies come under the management of new private sector investors.

It is worth noting that Investors cannot afford to bring in expatriate staff to replace Nigerians who best understand the system; they will rely on the technical experts currently engaged in the sector to run the companies.”

“In anticipation of the competition and the related need for skilled manpower and expectations of higher levels of performance which the reform will bring to the sector, the National Assembly mandated the creation of the National Power Training Institute of Nigeria (NAPTIN). NAPTIN will train existing and new entrants to the sector so as to position Nigerians for the new but more demanding opportunities greater investment and private sector management will give rise to.

The industry currently suffers from a shortage of engineers and other skilled technical staff, a gap which has to be closed to secure maximum benefits from new investment in the power sector.  NAPTIN is already fully operational.”