PHCN is broke, Lagos & Abuja headquarters up for sale

Prior to the unbundling and total privatization of the Power Holding Company of Nigeria (PHCN), the Federal Government has put its total liabilities at N392.722 billion. This was disclosed on Monday by the Managing Director of the Nigeria Electricity Liability Management Limited (NELMCO), Dr. Samuel Agbogun, during a media chat, in Abuja.

Agbogun also disclosed that the PHCN, as a way of shedding excess weight and making its financial commitments lighter and easier, has resolved to dispose of its non-core assets. He described the non-core assets as those items the agency, or any of the bodies inheriting them, would not need for power generation and distribution. Prime among such assets that have been put up for sale include the Marina, Lagos head office of the old National Electric Power Authority (NEPA) that PHCN later inherited at its name change.

Also for sale is the present head office of the PHCN at Zone 4, Wuse, Abuja. Agbogun said the values of the two properties and some others that would also go in the weight shedding are yet to be ascertained as NELMCO will soon engage property valuers who would assess and determine what the market price of the properties would be. He gave assurance that the sale would be handled in an open and competitive bid and there would be no shady deal about the transaction.

A breakdown of the bulk liability of the power holding agency shows that it has a burden of N75 billion on litigations all over the nation, N42 billion on pollution and environmental hazard and related issues, N5 billion as outstanding gratuities to retired workers and N1.8 billion as local and foreign loans. NELMCO noted that what constitutes the bulk of the debts is what it tagged “PPA and Gas Indebtedness” which is a bill of N150 billion, and that its foreign financial liabilities have been transferred to the Debt Management Office (DMO) to handle.

He explained that the federal government in the current fiscal year allocated N12 billion to the body for the payment of workers pensions of N1 billion each month. “So far, NELMCO has received the allocation for six months amounting to N6 billion and the money is deposited with the Central Bank of Nigeria for safekeeping pending when it would be made use of.

“It is out of this amount that NELMCO has paid the August pensions. This payment is to those locations that forwarded their records and information required for the processing, and that amounts to N762 million.” The NELMCO boss also noted that instead of over 140 pension pay points operated nationwide, from where pensioners got their payments, the new e-pay point would be centralized in Abuja for easier handling from a common point.

Agbogun stated that the new procedure would not pose any problems for the office and pensioners as it is easier and faster to handle since the pensioners have bank accounts where the payment are forwarded and with the electronic system of banking, there are no hitches to the operation.

“The implementation of the Electricity Power Sector Reform Act, 2005 required that a special purpose entity be created, into which will be domiciled all of the huge PHCN liabilities that cannot be settled from the eventual proceeds of the sale of the PHCN successor companies.” He promised that the body would not fail in accomplishing the task and ensuring that the society and those directly affected would not have cause to regret the setting up of the agency.

Source: Daily SUN