Anxiety as Canadian firm takes over PHCN tomorrow

TCN is one of the successor companies created from the unbundling of PHCN; it combines the functions of a transmission services provider, a system operator and a market operator, all of which are central to the sustainability and development of the electricity sector.



Facing armed soldiers, police


The about 1,000 staff appeared to have got more than they bargained for when they resumed work the next day only to face armed soldiers and police who had taken over the headquarters. They were locked outside.

In return, the workers caused as much trouble as they could muster outside, blocking a part of the Aguiyi Ironsi Street, Maitama near their office causing a thick traffic gridlock. That was on Friday 20th, 2012 for most part of the day.

By Monday 23rd July, same was repeated until the Secretary General of National Union of Electricity Workers Joe Ajaero came from Lagos to intervene. Eventually, they were allowed to go into their offices with a commitment not to make further trouble.

How it all started

Initially, the workers opposed the privatization of the government firm but later shifted ground and demanded to be paid their severance package.

Earlier in the year, the minister of power had ordered that all staff of the PHCN working at the headquarters be transferred to distribution companies (DISCOs) and agencies created out of the unbundled PHCN.

The workers stoutly resisted it with days of protest and threats of industrial action. They argued that pension issues were still pending and that until they were tackled, going on transfer was a no go area. They argued that transferring them to DISCOs would amount to making them redundant since no vacancies existed there.

The federal government later shelved the plan but fresh trouble began last week when Manitoba was billed to access the PHCN facility. The workers feared their jobs would be taken over by the new manager.

How the Canadian coy came in

After a week of horse trading between the two parties, Manitoba signed a three-year management contract with the federal government and is billed to formally take over the TCN tomorrow.

Manitoba Hydro International won the bid to manage the TCN through a bidding process conducted by the Bureau of Public Enterprises (BPE). TCN is one of the 18 successor companies of PHCN in the power reform road map.

The minister has however allayed fears of the angry workers. According to him, Manitoba Hydro will bring only eight staff as the existing indigenous staff will be in the shadow as deputies.

The minister said, “They [Manitoba] are not going to get rid of TCN workers but they will bring in a few people to work with the TCN people and more importantly, they will bring their expertise. They will bring in speed, be able to anticipate issues and problems and address them proactively. This is what we don’t have in the public service.”

The thorny issue

One of the thorny issues is the divergent positions of the federal government and the workers on the pension scheme for workers. While workers are insisting on being settled on the Pre-2004 Pension Act, the federal government says it will use the 2004 Act.

With this development the minister of power set up an eight-man committee to probe the PHCN pension scheme spanning a 33-year period, starting from 1979.

The committee headed by a retired Auditor-General of the Federation (AuGF), Mr. Joseph Ajiboye has one month to conclude its investigations and recommend sanctions for those found wanting.

PHCN has for years operated an in-house defined pension scheme that is referred to as the superannuation pension fund, with only the management and leaders of the trade unions as trustees. This arrangement however runs contrary to provisions in the Pension Reform Act (PRA) 2004 and has been frowned at by the federal government.

There were indications that an estimated N200 billion is missing from the pension funds in view of claims that 25 percent of workers’ salaries deducted over the years could not be accounted for. This was however refuted by the minister of power who insisted that the panel was out to establish facts on the status of the pension.

Nnaji in his remarks stated that government was in disagreement with unions on the method of pension payment that should be adopted, adding that it was the only outstanding issue to be resolved in its rounds of negotiations which is at its eight round now.

“Government must always follow due process and law in its programmes and so the pension scheme for PHCN has not been operated in the way it should and has not followed the PRA. For some reasons some people in the PHCN want to continue with the old scheme but this clearly is against the reform act and this implies that it is against the law, this is not something that government will allow to happen,” Nnaji said.

The minister said, “We want to look at the operations and management of PHCN pension scheme from inception to date, but this can be done by having credible Nigerians look into the scheme. I also want to say that we have been in disagreement with the unions on method to use for pension. They insist that we should go with the scheme prior to 2004. We insist that we will go with the law of the land because we are government and will not disobey the law. Nigerians should now decide which way we should go—to disobey the law and pay PHCN higher money. But whatever calculation on severance will be based on the law.”

Bureaucracy delayed privatisation

By 2007, Electricity Act provided that PHCN should have ceased to exist after its unbundling and subsequent sale of the units to private investors. But bureaucracy and sundry challenges have kept the goal post shifting. According to the latest time table by BPE, the agency empowered to superintend the sale of the PHCN, the exercise will be concluded this year.

A list of 25 bidders recently met the deadline for financial and technical bid submission by BPE. Winners are expected to be announced upon technical evaluation by the BPE before year end.

The new owners are expected to renew employment terms with the PHCN staff who will remain behind after the takeover. While ruling out the possibility of job loss which is one of the fears expressed by the workers in the course of the privatization exercise, the minister recently issued a statement saying over 1,000 engineers, technologists and technicians will soon be employed to add to the existing TCN staff. He assured that adequate funds have been provided for PHCN workers’ entitlement.

Prof Nnaji assured that contrary to claim by some trade unionists in the power sector, there are sufficient funds in the PHCN pension scheme to settle the retirement benefits of the 50,000 PHCN workforce.

He said till July 1, 2004, the PHCN operated a non-contributory pension scheme and that “N88 billion is required to pay the retirement entitlements of the 50,000 PHCN staff members as of June 30, 2004, but only N3 billion is available in the PHCN pension scheme account.” This scheme is administered jointly by the PHCN management and the three trade unions in the power sector. He said the federal government has offered to provide the shortfall of N85 billion in the PHCN pension scheme account.

As Manitoba takes over tomorrow

In an apparent move to further douse the tension and allay fears among the workers, management contractors of TCN, Manitoba Hydro and the top management of the BPE last Thursday had a meeting with the TCN staff.

Manitoba will take over control of the TCN tomorrow. According to terms in the contract, Manitoba is expected to within the period ensure seamless stabilization of the national grid, reduce electricity losses during transmission, provide for the achievement of certain predetermined targets that will improve grid security and general performance as well as a reorientation of the management culture of TCN Nigerian staff.

The contract also provides for achievement of certain objectives that include provisions for reward and penalty clauses as incentives for success, efficient management of government investments in the process, adequate and equitable generation dispatch according to a fair merit order based on sound regulatory principles, assurance of fair market settlements between electricity traders and skills and expertise transfer to Nigerian counterparts who will serve in deputizing and other positions to the management staff of the management contractor.

In spite of the parley, the workers only have cautious optimism.  The North-Central Zonal Organising Secretary of the National Union of Electricity Workers (NUEE) , Mr. Temple Iworima said the union was yet to let go on its demands irrespective of the parley. He said it was keeping its fingers crossed while further negotiations continue.

During one of their protest, Iworima alleged, “Agreements on severance packages, pension and gratuity for the workers are still outstanding after 18 months of negotiations. It was agreed upon by both parties through the Hassan Sunmonu-led negotiation panel that there will be no take-over of the PHCN until labour issues are fully resolved.”

It is hoped that in the coming months, the workers and federal government will find a common ground towards fixing Nigeria seeming intractable power problem.

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