PHCN workers warn FG against power sector emergency

By Adetunji Adeleye - updated: Tuesday 01-07-2008

Fatima Ibrahim,
Minister of State for Energy
(Power)AHEAD of the planned declaration of a state of emergency in the Power sector by President Musa Yar'Adua, the leadership of workers' union in the Power Holding Company of Nigeria (PHCN) has said members have been directed to down tools and begin an indefinite strike the moment President Yar'Adua declares emergency in the sector. Under the umbrella of the National Union of Electricity Employees (NUEE), the leadership of the union said apart from the fact that the president lacks the constitutional power to do so, the Power sector since the government of Olusegun Obasanjo has been under emergency.

Addressing journalists in Lagos, General Secretary, Comrade Joe Ajaero, lamented that years before the beginning of civil rule, the Power sector had been abandoned and with the coming of civil rule till date, no facility has been provided for PHCN staff to work with. According to him, the workers who had been putting all their energies into ensuring that the nation does not go into total darkness in the midst of very difficult environment, have been passing through emergency declared by former President Obasanjo by the freezing of employment, promotion, increment of salary of staff among other staff welfare. He warned that the staff would not accept any other emergency, especially one which has no clear definition as every attempt to get President Yar'Adua or agents of his government to explain what the emergency entails, has so far yielded no result. Comrade Ajaero threatened that should the President declare an emergency without carrying the workers along, the workers would within minutes of the declaration of the emergency down tools and go to their respective homes.

He warned that if feelers they are getting are anything to go by about the planned emergency, it would be worse than the National Integrated Power Project (NIPP) of former President Obasanjo which though engulfed billions of dollars, ended up compounding the power situation in the country. According to him, Yar'Adua, just like Obasanjo, now planned to spend over 6 billion dollars of public money for about three years on the so-called planned emergency after which the sector would be handed over to private sector cronies of government. The NUEE General Secretary decried a situation where public money would be spent on a project only for the same project to be handed over to the private sector cronies of government officials, stressing that not less than 25 companies, including those of former President Obasanjo and Dangote, were given licences to generate electricity, up till today, he claimed, nothing has been done.

Comrade Ajaero posited that all what the licensees have been doing is to wait in the wings to take over public projects that billions of public funds had been spent on. He wondered why the Yar'Adua government has not deemed it necessary to implement the outcome of a recent probe of the Power sector by the House of Representatives instead of planning to lead the nation into another wasteful adventure. Comrade Ajaero called on the government to provide facilities for the workers of PHCN to work and at the same time, address the issue of workers' welfare, lamenting that staff of the newly set of National Electricity Regulatory Commission (NERC) receive 300 per cent salary higher than engineers of PHCN.

The NUEE Scribe alerted the nation that more power stations would soon break down because the government is not interested in maintaining even the existing power stations and lamented that Nigerians have ignorantly continued to vent their anger on innocent PHCN workers who have been doing their best to prevent total collapse of public power supply in the country. According to him, in most cases, PHCN workers are seen carrying ladder and other tools that ordinarily should be carried by vehicles, on their shoulders all in efforts to ensure that fellow Nigerians get public power supply, yet the same Nigerians would turn around to assault, harass, and abuse PHCN workers.

Comrade Ajaero vowed that the union is now prepared to take on government and the management of PHCN over welfare of members starting from both 12.5 per cent and 15 per cent salary arrears, the non-release of the result of a promotion interview held since February 2008 among others. According to Comrade Ajaero, the "CEC in session viewed the much advertised state of emergency in the Power sector by the President and Commander-in-Chief of the Federal Republic and observed with amazement the seeming neglect of the stakeholders. It is most amazing that a government, a democratic one for that matter, is not having a listening ear. All efforts made by the union to have audience with the President or his Minister of State on the sector to enable us make input on the state of the Power sector were met with deaf ears.

The unconstitutio-nality of the said State of Emergency notwith-standing, the workers in PHCN have been working under harsh conditions reminiscent of a State of Emergency, hence we are at a loss to understand what Mr. President is out to achieve. The government should be open to Nigerians, especially the stakeholders represented by the Labour Union in that sector by carrying them along and not to shroud his state of emergency in secrecy. Consequently, the CEC in session has resolved to resist the State of Emergency that is anti-workers, anti-people, hence all workers are directed to remain at home should government go ahead with their planned action."

"The CEC in session noted with dismay the unpaid 12 l/2 and 15 per cent salary arrears in almost all the locations and urged the secretariat to take appropriate steps to prevail on PHCN management to effect payment without further delay. The CEC in session urged the management to suspend the issue of National Health Insurance Scheme until necessary areas are tidied up or in the alternative, pay for the workers, and continue to operate the existing retainership scheme. The CEC in session viewed with dismay the reluctance in releasing the result of the promotion interview held since February 2008, and worse still, that management has been adamant to the 21 days ultimatum given to her by the union for the release of the promotion letters.

Consequently, the CEC resolved that seven-day extension of the ultimatum be given to PHCN management effective from 18th June 2008, and at its expiration, if management remains adamant, the union should commence a nation-wide praying session, and thereafter embark on industrial action."

Financing shortfall shackles in Nigerian oil output

Sola Fadare, Lagos - updated: Tuesday 01-07-2008

Ann Pickard, the head of Royal Dutch Shell in Africa, pushes across her desk a map that appears to suggest Nigeria has broken out in an alarming rash. Marking the location of oil and gas deposits, multi-coloured blobs pepper both land and sea, revealing the scale of untapped potential. “The future is huge,” says Ms Pickard. “You can see a lot of gas, but surprisingly there’s still a lot of oil left.” Western majors rank Nigeria as one of the most promising frontiers in an increasingly frantic search for new sources of energy. There is rather a large snag. Nigeria has developed into a case study of how underinvestment, inefficiency and insecurity can conspire to stop fossil fuels leaving the ground, no matter how ravenous the world’s demand.

Fears over supply in Nigeria - one of the top 10 crude exporters - have helped hoist oil prices to record highs close to $140 a barrel this year. As if to underscore the depths of the decline, fast-growing Angola pumped more oil than its bigger brother for the first time in April, courtesy of a strike by ExxonMobil workers who temporarily paralysed a more than a third of production. Umaru Yar’Adua, the President, wants to revitalise the industry by launching the biggest overhaul of the energy sector since Shell exported the first boatload of crude from the country 50 years ago.

His strategy is both bold and risky. The central thrust is to reform the Nigerian National Petroleum Corporation (NNPC), the notoriously opaque state oil company, to lay a long-term foundation for attracting more investment. But Mr Yar’Adua faces a more immediate challenge: soothing fears among energy companies that short-term uncertainty over his agenda may scare investors away. So far, he has shown few signs of doing so. Last month, he ordered Shell and ExxonMobil to pay $1.9bn in revenues and taxes after a government committee reviewed agreements covering offshore fields signed in 1993.

Nigeria enjoys a good name for respecting contracts in the oil industry; suddenly its reputation seemed in doubt. Shell was in for another surprise this month when Mr Yar’Adua announced that its exploration blocks in Ogoniland, scene of the hanging of Ken Saro Wiwa in 1995, would be awarded to another operator by year-end. But by far the biggest shock occurred last week, when speedboat riding gunmen navigated more than 100km of open sea in darkness to attack Shell’s giant Bonga vessel, forcing the company to shut in 200,000 b/d of oil production and shattering the hopes that Nigeria’s deepwater arena would be immune to the violence plaguing operations onshore.

While images of militants skimming through the Niger Delta in powerboats are the most obvious threat to the industry - where rebels have shut in a fifth of output since early 2006 - Mr Yar’Adua’s reforms aim to solve a lesser known but equally insidious problem: funding. Despite the extraordinary gains in oil prices in recent years, Shell and other majors have struggled to develop their operations as quickly as they would like, in part because of the government’s failure to pay its share of costs for their joint ventures with NNPC.

The five joint ventures form the core of the industry, pumping just over 70 per cent of its crude. Mr Yar’Adua’s advisers warned in an internal report in January that unless Nigeria solves the financing issue, production could fall by a third by 2015. Downplaying the risk of such a catastrophe, the government says efforts to improve security in the Niger Delta and tackle the funding issue will soon yield results. “I think the prospects are for Nigeria to be producing well over double its current production,” Odein Ajumogobia, petroleum minister, told the FT.

To tackle the immediate financing crisis, Shell, ExxonMobil and Total have agreed to lend NNPC a combined total of $6.1bn this year to cover arrears and kick-start projects. But Mr Yar’Adua wants to find a more permanent solution by restructuring the system to allow each joint venture to approach the capital markets to raise funds. Shell has said it accepts the principles of the new plan, although industry insiders say there is a host of unanswered legal and financial questions.

Perhaps the biggest barrier will be reform of the NNPC itself. An agglomeration of agencies, ministries and departments, the company has earned a reputation as the place where oil, money and power fuse at the heart of Nigeria’s body politic, not always with savoury results. Mr Yar’Adua wants to transform NNPC into a national champion along the lines of Saudia Arabia’s Aramco. The idea is to impose discipline on a sector where distortions in everything from the allocation of exploration blocks to fuel import licences have often served powerful businessmen rather than commercial logic.

Acknowledging that those benefiting from the current state of affairs will make reform “a major challenge”, Mr Yar’Adua says he is nevertheless hopeful of completing the restructuring within a year. Lawmakers have set up a panel to investigate the company’s operations from 1999 to the present, an exercise likely to illuminate something of the NNPC’s murky past. Although recent attacks on pipelines have revealed the fragility of the situation in the Delta, Nigeria’s offshore prospects offer some succour. Chevron’s 250,000 b/d Agbami field is in the process of starting up, while Total could add more than 200,000 b/d from its Akpo field later this year.

But the real test will be whether Mr Yar’Adua can forge the kind of partnerships that will make companies confident enough to spend the sums needed to turn the green and red dots on Ms Pickard’s map into the black stuff.