The Bureau of Public Enterprises (BPE) says privatised government entities are to be listed on the Nigerian Stock Exchange, although it has raised concerns on the stability and the prospects of realising good value for the firms via listing.
The BPE Director General, Mr Alex Okoh said this when he received members of the Nigerian Stock Exchange technical committee on new listings.
The NSE new listings committee was in Abuja to seek collaboration with the BPE to increase the number of listings on the stock exchange via privatisation.
Mr Okoh told the committee that the BPE’s reform structure and privatisation process envisages the listing of privatised enterprises as their final outcome.
The House of Representatives is to investigate if the concession of assets of the Nigeria Railways Corporation to General Electric violates the county’s privatisation laws.
In a motion considered during Tuesday’s plenary, the lawmakers queried what they described as an attempt by the Federal Executive Council to concession the Western (Lagos-Kano) and Eastern (Port Harcourt-Maiduguri) rail lines, to General Electric, without recourse to the Bureau of Public Enterprises, and privatisation regulations.
The move to investigate the concession agreement with GE comes after a motion raised by Honourable Chukwuemeka Ujam.
The lawmakers said the action of the FEC is a part of attempts to pander to certain interests who want to see the nation’s core assets sold off and alleged that the move contravenes the Public Enterprises (Privatization and Commercialization) Act, 1999.
The chairman of the House committee on Privatization, Yerima Ahmed, said by engaging the American firm, FEC had usurped the functions of the Bureau of Public Enterprises and the National Council on Privatisation.
“Section 11 (j) outlines the procedures for privatisation; there are four sections to be followed by the BPE and the agency is not being carried along.
“The NCP has not been inaugurated, and in its absence, the BPE is the secretariat for any privatisation.” He said
The chairman of the House Committee on Foreign Relations, Nnenna Ukeje, said it is incomprehensible how such concession or privatization agreement would be deemed legal when the National Economic Stimulus Bill is yet to be signed into law.
The house committee on privatisation was directed to investigate the matter and report back to the house in four weeks.
After the last Federal Executive Council meeting in Abuja, the Minister for Transportation, Rotimi Amaechi announced that the council has approved a negotiation with GE, towards contracting the railways across Nigeria.
He said the narrow gauge railways to be contracted would to a great extent, assist the agriculture and mining ministries in the transportation of extracted minerals.
One of them is the Port Harcourt-Maiduguri railway which would include: Port Harcourt, Aba, Umuahia, Enugu, Makurdi, Jos, Gombe and Bauchi to Borno.
The other is the Lagos-Kano railway, which would also comprise: Lagos, Abeokuta, Ibadan, Ilorin, Kano, Funtua and Zaria to Kaura Namoda.
The Transportation Minister says the railways to be rehabilitated by GE will come at no cost to the government.
As Nigerians continue to react to the Federal Government’s proposed plan to sell some of its assets, an economic and financial analyst believes the process should be carried out properly and with utmost transparency.
Channels Television hosted Mr Bayo Rotimi on Tuesday who observed that the only way the government could earn the trust of its people was to let the privatisation of its institutions go through the proper channels.
“Government Must Deliver”
He noted that the law had provided for the National Council on Privatisation (NCP) and the Bureau of Public Enterprises (BPE) to be in charge of sale of government assets.
“Essentially for government to earn the trust of its people, the government must deliver on what it says.
“I am insisting (that privatisation) goes through proper channels; through the NCP and the BPE.
“Let us, the people of Nigeria, monitor the process (and) let us flag any irregularities that we notice (and) let us hold the bidders accountable,” he said.
Hold Government Accountable
The economist also asked the citizens to hold the government accountable on how the proceeds from the sale of assets would be utilised.
He criticised the idea of individual ministries selling their own assets, reiterating that “the law has empowered the NCP and the BPE to carry that out.
“The citizenry has to be alive to their responsibilities.
“I believe that citizens must hold their government accountable.
“If the privatisation agencies sell assets that belong to the collective, first and foremost, we must see that those assets were sold through a transparent process.”
“Drain Pipe On The National Treasury”
Mr Rotimi further stressed the need for the preferred bidders to have the required technical capacity, the ‘management know how’ and the financial muscle to run the institutions effectively.
He asked the government to focus its proposed privatisation plan on institutions “that have constituted themselves into a drain pipe on the national treasury”, especially those that the Nigerian tax payers were keeping afloat.
“With regards to potential sale of stake in the Nigeria Liquefied Natural Gas (NLNG), personally, I do not support that (because) it is a company that is thriving.
“It is a company that is delivering dividend to the Nigerian people and those dividends have come in very handy in the last year and it will continue for the foreseeable future,” the economist said on Sunrise Daily.
The Nigerian government has inaugurated a ‘Steering Committee’ that will handle the concession of the eastern and western lines of the Nigeria’s Railways.
Vice President Yemi Osinbajo inaugurated the committee on Thursday, with a demand from the members to get the job done promptly.
Professor Osinbajo said that the committee would create a one-stop shop for the concession, fast track the process and beat the red-tape and bureaucratic bottlenecks.
He further expressed optimism that the Steering Committee headed by the Transportation Minister, Mr Chibuike Amaechi, would be innovative, urging the members to remove whatever obstacles in the way of a smooth concession process.
The Vice President is also hopeful that the committee will meet its deadlines and end up “to be an example of how it should be done”.
He said that the Buhari administration was determined to overcome the challenges of bureaucratic bottlenecks in the public service delivery system.
“I think this Steering Committee is extremely important, because we have tried to bring together everybody that should be involved in this (concession) project in order to see to it that we deliver quickly and efficiently in a manner that justifies Federal Government’s expense in the project.
“The whole idea of the Steering Committee raises the issue we are trying to address, to have a one-stop shop for all approvals, objections or problems so that we can realise our target,” he explained.
Speaking after the inauguration, the Minister of Transportation said that the committee was set up to ensure the concession of the nation’s railway and is expected to submit its report in six months.
The Steering Committee
The 20-Member Committee is composed of officials and individuals from relevant public and private sector agencies and firms and they are to also advise the National Council on Privatisation (NCP) on policy issues that impact on stakeholders’ interest, advise the Bureau of Public Enterprises (BPE) on efforts at improving stakeholders’ relations and also advise BPE and Federal Ministry of Transportation on planning, coordination and implementation of Nigerian Railway Corporation.
Other functions of the committee are to review existing legislations, reports, studies and any other relevant information on the railway sector and provide guidance on policy issues, review economic and financial viability of the project and recommend the level of Federal Government of Nigeria’s investment and review the concession framework developed by the Project Delivery Team.
They will also review the technical, financial and legal framework for the successful preparation and concession of the project, review the activities of the Project Delivery Team that would facilitate the concession, guide the project delivery team in the concession process, assist the concessionaire to obtain all clearances, approvals and permit as may be necessary and assist in organisation of workshops, and public awareness campaigns on the concession process.
The Steering Committee will also brief the NCP and Federal Executive Council (FEC) from time to time on the activities of the Steering Committee; and to carry out any other function that will facilitate the delivery.
The National Industrial Court sitting in Akure has adjourned the case filed by the disengaged staff of the Power Holding Company of Nigeria (PHCN) against the company.
The ruling on the matter was postponed till October 18, 2016, after the court heard from counsels of both parties on Wednesday in Ondo State, southwest Nigeria.
The electricity employees were led by the President of the National Union of Electricity Employees (NUEE), Ondo State chapter, Clement Daudu.
The staff, numbering 75 were in court to challenge their alleged disengagement since 2013 without following due process and non-payment of their severance packages.
Joined in the suit as second, third and fourth defendants were the Benin Electricity Distribution Company (BEDC), the Bureau of Public Enterprises (BPE) and the National Electricity Liability Management Company (NELMCO).
Vice President Namadi Sambo has reaffirmed Government’s commitment towards creating an enabling environment that would encourage private sector investment into the power sector.
In a press release signed by the Head, Public Communications at the Bureau of Public Enterprise, BPE, Chigbo Anichebe, the Vice President, who is also the Chairman of the National Council on Privatization (NCP), said that the challenges facing the electricity sector in Nigeria were enormous.
He however maintained that President Goodluck Jonathan’s administration is committed and determined to keep “its promise of taking Nigeria out of its perennial darkness within the shortest possible period”.
While commending the roles of the NCP, the Bureau of Public Enterprises (BPE) and other key stakeholders for the actualization of the handover, the Vice President reminded the new owners to keep to the agreed covenants.
According to him, Nigerian Electricity Regulatory Commission (NERC) and the BPE would continually monitor the operations of the successor companies, with a view to sanctioning any core investor that does not deliver on the performance agreement that was executed with the government.
The Minister of State for Finance, Dr Yerima Ngama, speaks to Dateline Abuja on the plans of the Federal Government for financing the Nigerian power sector, in view of the privatization.
He explains the activities of the Government, the partnership agreements being signed and the feasibility of the plans on ground to ensure that the reforms yield positive results for Nigerians to celebrate.
The Director General of the Bureau of Public Enterprises (BPE), Benjamin Dikki, has expressed confidence that the handover of Nigeria’s power sector to investors will yield desired results, but extended his sympathy to those who do not believe so.
“I sympathise with those who are pessimistic. All I can tell them is: just wait and see what’s going to happen.”
Mr Dikki who was speaking on Sunrise Daily, from our Abuja studio described the handover as “a historic process.”
Making an example of the privatised Telecoms sector, he stated that the progress witnessed in that sector will pave way for Nigerians to appreciate the handover of PHCN to private investors.
“We have to look at what has happened via the reform of the telecom sector for us to appreciate the magnitude of what is happening and what will happen in the power sector,” he said, “once you hand over a sector to the private sector and create an enabling environment, you would see a revolution in that sector.”
“We are looking out for a revolution in the power sector,” he said.
Speaking about the defunct PHCN, Mr Dikki explained that the separation of power generation from power distribution would correct the inconsistencies which marred the former system, that amounted to loss of revenue and power.
The power generating companies will sell to the distribution companies who will in turn sell to the end users.
“This has introduced transparency in the power value chain. Revenues that are expected to be collected will be collected because this is now business” and those who invested, expect to make returns, Mr Dikki stated.
The handover will also unburden the Federal Government of any financial obligations as the private investors are expected to pump in funds in order to meet up with the demand for electricity.
“Government is now being free from the responsibility of financing and budgeting for the 14 companies handed over to private investors.”
He countered arguments that the total privatization of the power sector would pose security issues stating that similar things were said when the telecoms sector was to be privatized.
However, he assured that “government is not going to go out of power immediately” and the “proceeds from the NIPP plant (National Independent Power Project) will be ploughed back into other sources of energy: hydro, renewable energy and solar.”
An independent regulatory agency, Nigerian Electricity regulatory Commission (NERC) which he described as the ‘policeman of the sector’ will ensure that the investors follow the laid down guidelines and tariff structure.
The Bureau of Public Enterprises (BPE) has cancelled the sale of the Aluminium Smelter Company of Nigeria (ALSCON) to US-based BFI Group Corporation.
In a statement by its head, public communications, Chigbo Anichebe, BPE said the directive to terminate the offer to BFI Group Corporation for the purchase of 77.5 per cent of ALSCON is from the National Council on Privatisation (NCP)
The statement explained that the decision followed BFIG’s inability to pay the agreed 10 per cent of the offer price within the stipulated 15 working days of the execution of the share/sales purchase agreement as directed by the supreme court of Nigeria.
However BFIG’s chairman, Reuben Jaja, reportedly said that the cancellation of the sale was a violation of the July 6, 2012 order of the Supreme Court.
The Supreme Court had granted perpetual injunction restraining any act by any agency of government against the contract until all the issues that resulted in the crisis are resolved.
The Governors of Edo, Delta, Ekiti and Ondo on Thursday rejected the announcement of Vigeo Power Distribution as the successful bidder for the Benin Distribution Company by the Bureau of Public Enterprises (BPE).
The states are investors in the Southern Electricity Distribution Company which lost out in the bidding process.
The Chairman of the Technical Committee, National Council on Privatisation (NCP), Atedo Peterside, had on Tuesday during the opening of the commercial bids of the privatization of Power Holding Company of Nigeria, announced Vigeo as the successful bidder claiming the committee adopted Aggregate Technical Commercial and Collection loss Reduction as the basis for choosing the preferred bidder for the Benin Distribution Company.
In a press briefing after the announcement, Governors Adams Oshiomhole of Edo State, Emmanuel Uduaghan of Delta State and Kayode Fayemi of Ekiti State, told journalists that the process that led to the emergence of Vigeo Consortium lacks transparency.
It accused NCP of not judging by necessary parameters which include; technical competence, state participation, on the ground knowledge and financial competence.
The governors said: “States were allowed to participate in the privatization exercise after exhaustive deliberations and consequent recognition of the value that the states were uniquely positioned to add to the success of the post privatization utilities mostly in the troubled areas particularly, the Niger Delta Region. Some of these include Right of Way, rural electrification, legislation against theft and vandalism, policing to improve collection.
“Our states have invested heavily in power generation, transmission and distribution across the length and breadth of our respective states as we recognized the importance of power as the pre-condition for socio-economic growth and industrialization of our states.
“We participated and came out as the most technically competent and have the consortium that is most suited to the peculiarities of our region.’’
“In our region, you cannot succeed in operating the utility without the participation of the state governments, on ground knowledge and relationship with different stakeholders such as youths, communities, leadership. Our consortium possesses all theses. Experts have said that Aggregate Technical Commercial and Collection losses as the singular basis for selecting the preferred bidder after qualifying technically was completely flawed. It is neither here nor there. It is simply arithmetic progression or statement which does not in any way demonstrate your ability to succeed post privatization.
On the question of whether the governors were considering litigation to restrain the BPE and the successful bidder, Governor Adams Oshiomhole responded that the company would not be allowed to operate in the states.
He added that “The technical qualification criteria also failed to take into consideration the peculiarities of the various discos, otherwise why would a company whose current service territory is 500 square kilometre be technically qualified to operate a 57,000 kilometre service territory in an area like the Niger Delta region without any local knowledge of this trouble area?
“BPE just allocated to companies that have big figures, you don’t reduce power to patronage, something you give to the boys, who are connected. It is a big shame. The whole process was riddled with corruption. The winner isn’t welcomed into our states; we will not allow it to operate in our state. He may be the one to go to court.