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Our fears for power sector privatization – Labour

…faults timing of tariff increase


Amid worsening electricity supply in the country, the Federal Government on June 1, 2012, jerked up claiming it is to attract private investors into the sector. In an interview with the President-General of Senior Staff Association of Electricity and Allied Companies, SSAEAC, Engineer Bede Opara, spoke about labour position, the stalled negotiation with government on severance benefits for workers of Power Holding Company of Nigeria, PHCN, among others.

What is the state of negotiation between government and labour today?
Negotiation between PHCN Labour Unions and the Federal Government started May last year and it has dragged on for so long. In some situation we may agree, but the implementations always have some issues.

The stage in which we are now is the discussion of severance package as well as terminal package. The labour position is that since PHCN will be privatized to different companies and if we are to continue to work with the new owners, we must be settled of the one we have done already with PHCN so that by the time we get into those companies whom we do not know who will run it, we will have a new conditions of service or agreement with the new investors.That is where we are. The issue of the terminal benefit is where we are now and nothing has been agreed.

Governments are saying that they are going to pay us maximum of one year basic salary, which means no matter the calculation, the number of weeks and the years of service an individual has rendered once it gets to your one year basic salary that is the end. At the same time, the federal governments are saying that they are not going to pay the total emolument salaries. But Labour unions, we are saying that when it comes to salary it has to be total monthly salary, not basic salary. Because basic salary is nothing compared to the other allowances.

So we have not agreed on these issues. They are saying basic salaries; the unions are saying total emoluments. May be I have served for 15 years and another person worked for five years, they are saying all of us will be paid one year maximum. We have said no because there is nowhere anyone who has worked for 20 or 30 years is not short change at the end of his service.

What about the issue of Pension?
What government is saying about the issue of pension is that we should move to Contributory Pension Scheme, CPS and open RSA, Retirement Savings Account. But we have our scheme that is the Superannuation Fund Scheme and we are running it but unfortunately, the management of PHCN has over the years not been funding that account properly. If they have not been funding the scheme properly it is not our business it that of the federal government because they are the one that appointed the management of the scheme.

We have made some researches and discovered that the amount we will get from RSA cannot be compared to what we get now according to our condition of service. Our condition of service says government has to implement it because that is our contract document with the federal government.

If we have to move to RSA, talking about what the law says, funding should be proper. We must agree on the value of what you want to put into the account. These are some of the issues that are on ground which is why the condition of service must be implemented before any other digression.

From your investigation, if was properly funded, what would have been accrued?

By the assessment made by PHCN as at 2010, we had about N331 billion and as of today it is a different ball game.

Who is driving the process of privatizing PHCN because we seem to have noticed overbearing influence of the Ministry of Power?

As far as we are concerned it is the Bureau for Public Enterprises, BPE that is the one driving the process. We know that the force behind BPE is the government. They have chairman of National Council of Privatisation, NCP as the vice president but the acting ingredient there is the Minister of Power.

Whatever is the outcome of the negotiation, the ministry of power will be one to take the lead. But as regards the driving force what the law says is BPE that will drive it but they are only an integral part of government or an arm of government.

Whenever government calls you for another round of meeting as it is now, what will be your Position?

Our position has not change. It is when we get in there we will see if government has shifted ground or not. But if they have not shifted their grounds, I don’t see Labour shifting their ground.

What is your take on the new tariff as Nigerians believe they are simply paying for darkness?
If you ask me if there is need for the adjustment of electricity tariff I will say yes. Why? We know the cost of generation or the cost of producing power is very high. Before now what the public or consumers are paying to PHCN is far less than the production of power.

But our problem is that there have to be some things on ground before the adjustment takes effect. Like the number of meter, let the people have meters so that they can be sure of what they are consuming. Also the increase in power generation that everybody is looking forward to should come so that the increment in tariff will be justifiable and that that is the angle Labour is taking in regards to the tariff increment. We believe that if power is there at least, up to 18 hours a day Nigerians will be willing to pay for the new tariff.

Our members have suffered so much in the field when it comes to collection of revenue for the company. However, government assured us of every effort to be deployed to ensure that meters from NERC (Nigeria Electricity Regulatory Commission) told us that between now and 18 months everywhere should be properly metered. If that is done people will find it easier to pay, but we know that Nigerians are very difficult in doing something, we know that some people will still cheat but the point is that it will be easier to catch up with people that are cheating and sanction them properly.

In a nut-shell let government make effort and put the required structures down and the materials needed for this power issue to be resolved so that Nigerians can easily welcome the new tariff. The government is saying that people that are on the low consumption level, the low income people, people who are consuming below 50 unit kilowatt pair hour, their bills will be compensated by government subsidy called MYTO (Multi Year Tariff Order).

Government is saying the tariff adjustment is what will attract investment in the power sector. Does it sound logical?

That has been our argument. We are saying make the product available and then put your price. In the spirit of reform, Labour is not saying no to reform. But what labour said earlier was complete no to Privatisation but since government is saying that they must privatize then they have to pay us. Investors are asking if there is any future in this business but it is left for the government to assure them that there is future in the business. We are expecting government to make the product available and it is like the same condition that investors are giving the government and they are


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