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Privatisation: FG suspends funding of PHCN hqtrs

By Clara Nwachukwu
ABUJA — The Federal Government, yesterday, announced the suspension of funding for the Power Holding Company of Nigeria, PHCN.

The suspension which became effective on January 1, followed the winding up of the power company, in line with its privatisation programme.

Accordingly, the staff of the PHCN at its corporate headquarters in Abuja, are currently being redeployed to its successor companies.

Clarifying issues further in a statement, Minister of Power, Prof. Barth Nnaji, was quoted as saying: “The regulatory agency (the Nigerian Electricity Regulatory Commission, NERC) has already directed that no further funds be made available to the PHCN corporate headquarters since it is not a market participant with effect from January 1, 2012.

Therefore, “staff who choose to remain in the former PHCN corporate headquarters building rather than proceed forthwith to the companies to which they have been redeployed, would find that there is no work to do in the building and that there is nobody to pay them at the end of the month for doing nothing in that building.”

Underscoring the legality of the action, the minister said the Electric Power Sector Reform, EPSR Act 2005, “empowers the National Council on Privatisation, NCP, to incorporate an initial holding company within six months of the coming into force of the Act. This holding company would assume the staff, assets and liabilities of the defunct National Electric Power Authority, NEPA,” which gave birth to the PHCN.”

Against this backdrop, Nnaji said the current exercise was a routine transfer of staff and not a displacement or redundancy exercise that could warrant any form of anxiety or protest.

In addition, Section 7 of the EPSR Act mandates the NERC to issue an interim licence to PHCN, which shall be valid for a period of not more than 18 months. The industry regulator was said to have duly issued this licence in 2006, as required by law. “What this means is that, by law, PHCN should have ceased to exist by 2007.”

Quoting Section 10, the minister said, “this law stipulates that not later than one year after the creation of successor companies, NCP shall issue a binding order to PHCN to transfer its remaining employees, assets, liabilities, rights and obligations to the successor companies.”

He said that the PHCN has been issued with the transfer order, which resulted in the current transfer of the headquarters staff “not only to the various successor companies but also to the parent ministry and other agencies of government where their services would be required.

“These processes are without prejudice to prior agreements reached with the workers on their entitlements, including the 50% salary increase which government has graciously granted the workers. The transferred workers shall enjoy their enhanced salaries, benefits and allowances in whichever successor company to which they have been redeployed.”

However, the transferred workers were told that their 50% salary increase arrears for June, July and August 2011, plus their transfer and January allowances will be paid at their new stations.


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