….As the saying goes, every responsibility demands accountability and having been given the responsibility of steering the reform and privatization program of the Federal Government of Nigeria, we deem it apt to give an account of our stewardship to the Nigerian people, through you, members of the fourth estate.
You recall that it was in this same venue, a year ago that we briefed you on our 2013 work plan and kept in touch with you every step of the way as we implemented that plan. It is important that we also come together to do a collective review of that 2013 work plan to see how far we have come with the implementation and use the opportunity to also unveil our 2014 work plan.
As you are aware, the Bureau is the secretariat and the policy implementation arm of the National Council on Privatization (NCP). In this regard, at the beginning of every year, the Bureau takes its work plan to Council for approval before we begin the implementation. Consequently, at its first meeting in 2014, Council approved the 2014 work plan of the Bureau.
2. A REVIEW OF THE 2013 WORK-PLAN
Council in approving the 2014 Work Plan reviewed the performance of the 2013 approved work plan. In 2013, Council had charged the BPE with mostly the conclusion of the privatization of the unbundled 17 of the 18 PHCN successor companies. Council in this regard, commended the BPE for the highly successful conclusion of the privatization of those 17 successor companies created out of the defunct PHCN.
In the same year under review, NCP equally approved the appointment of a Liquidator for the guided liquidation of NITEL/MTEL pending court confirmation. That processes is continuing in 2014 and is also reflected in the 2014 work plan.
In 2013, Council had also approved in that work plan the inauguration of the Project Advisory Teams (PAT) for the Housing, Stadia and National Parks of which all PATs have been inaugurated and work has reached an advanced stage. Each Advisory Team’s draft policy, legal and regulatory frameworks will be presented to NCP in 2014 for approval.
Council noted with satisfaction that at the end of 2013, gross transactions revenue was N397.7 billion, mostly generated from PHCN transaction.
3. THE 2014 DEPARTMENTAL WORKPLANS
THE 2014 Key Performance Indicators (KPIs)
Council has set for the Bureau, some key performance targets in the 2014 Work plan to include:
Passage of the eight (8) reform bills currently before the Federal Executive Council for approval;
Implementation of the approved transactions
Effective and robust monitoring of privatized enterprises;
Effective public enlightenment and stakeholders engagement; and
Enhancement of the IT infrastructure of the Bureau.
4. EXPECTED 2014 PROCEEDS
In the 2014 work plan, the Bureau has proposed to handle a total of 23 definite Transactions and a total of 29 Prospective Transactions. Consequently, we envisage gross proceeds of N535.3 billion from the definite transactions. We hope to realise about N211.3 billion from prospective transactions when they are executed.
5. 2014 WORK PLANS
A. THE REFORM BILLS
The critical element in the 2014 work plan will be the review and follow up, until passage of the eight reform bills currently before the FEC for approval. The Bills have been reviewed and finalized by the office of the Attorney-General of the Federation and presently before the Federal Executive Council (FEC). The Eight (8) Bills are:
Inland Waterways Bill;
Federal Roads Authority Bill;
National Roads Fund Bill;
National Transport Commission Bill;
Ports & Harbour Reform Bill;
Federal Competition and Consumer Protection Bill; and
Postal Reform Bill.
The passage of the bills would lead to the abrogation of monopoly sector laws, liberalization of the sector and set up of regulatory agencies. In pursuit of the Goodluck Transformation Agenda, these Bills seek to create an enabling environment for private sector investments in these various sectors of the economy. The expected outcomes are inflows of private sector investments, job creation and economic growth.
Once the Bills are enacted by the National Assembly, the regulatory agencies would then be set up.
B. TRANSPORTATION DEPARTMENT
The transactions approved for the Transport department were to privatize the Skypower Catering & Hotel Services and Sale of moveable assets in the ports.
The sale process for Skypower Catering & Hotel Services will commence as soon as the Steering Committee is inaugurated. However, the sale of moveable assets in the ports had reached advanced stage of conclusion.
DEFINITE TRANSACTIONS IN TRANSPORTATION DEPARTMENT
Definite Transactions in Transport department are therefore to auction the Ports moveable assets.
The prospective transactions (subject to passage of the reform bills) are:
o Concession of river channels (NIWA)
o Concession of railway tracks.
o Development of a framework for the concession of Federal Roads
o Establishment of regulatory agencies, NTC, Road Fund Board, etc as a result of enactment of Bills
o Commence the Privatization of Sky Power Catering Services Ltd: Subject to consideration of Steering Committee
o Re-commence transaction on Abuja International Airport, subject to consideration of Steering Committee
C. INFORMATION AND COMMUNICATIONS (I&C) DEPARTMENT
The transactions approved for the department include, to execute the Guided Liquidation of Nitel/Mtel and to review the Policy, Legal and regulatory framework that will prepare ground for the commercialization of the Media Enterprises: NTA, FRCN, National Film Corporation and NAN.
We reported to Council that the court process for the appointment of the Liquidator for Nitel/M-tel has been concluded when the Federal High Court sitting in Abuja, on Friday (14 March 2014) granted the Petition for the Winding-up NITEL/M-TEL through a ‘guided liquidation’ process and the appointment of Otunba Olutola O. Senbore as the Liquidator.
On the media enterprises, we reported to Council that a concept paper for the reform of the media enterprises has been sent to the Minister of Information and his inputs are being awaited. The objectives is to review the policy, legal and regulatory framework that will enable the enterprises to operate as commercial outfits while still owned by the Government.
DEFINITE TRANSACTIONS IN I&C DEPARTMENT
The definite transactions in the Information and Communications department are to conclude the guided liquidation of NITEL/MTEL and the Policy/Legal and regulatory framework review to prepare ground for the commercialization of the Media Enterprises, NTA, FRCN, National Film Corporation and NAN.
D. MINES AND STEEL DEPARTMENT
The Mines and Steel Department was to privatize the coal blocks and sell the remaining non-core assets of Nigeria Coal Corporation (NCC) and Nigeria Mining Corporation (NMC) in 2013 but litigations, resistance from host communities and other stakeholder issues delayed the transactions. The Bureau is collaborating with the Enugu State Government and have set up a joint Committee to resolve the issues. Another joint committee headed by the Permanent Secretary, Ministry of Mines & Steel Development was set up to resolve the legal and other issues that impeded the sale process of the coal blocks.
DEFINITE TRANSACTIONS IN MINES AND STEEL DEPARTMENT
In the Mines and Steel department therefore, NCP has approved the following transactions as definite for 2014:
Sale of residential Houses/lands of NCC
Sale of Naraguta & Maiduguri Bricks
Sale of non-core assets of Makeri & Mineral Houses, residential houses/vacant lands
Sale of Ogwashi-Azagba Coal Block
o Sale of NMC Joint Venture and Associated Companies
o Sale of Owupa Coal Block
o Sale of core Assets of Nigeria Coal Corporation (NCC) in Inyi, Amansiodo, Okpara & Onyema Coal Blocks
o Resolve issues involving the coal to power contracts
o Conclude arbitration with GINL and develop strategies for the privatization of Ajaokuta Steel Company and NIOMCO.
E. NATIONAL FACILITIES AND AGRICULTURAL RESOURCES DEPARTMENT
National Facilities & Agricultural Resources department was tasked with carrying out the reform of the Housing sector, concession of Stadia and the National Parks, privatization of Abuja Stock and Commodities Exchange (ASCE), Development Finance Institutions (DFIs),
The concept paper for sports reform and concession of the Stadia has been sent to the National Sports Commission (NSC) for inputs and the response is being awaited. For the National Parks, the work of the Steering Committee is on-going and the Project Advisory Team is compiling its final report for submission to the Steering Committee. The PAT has already compiled recommendations on the legal and regulatory framework for the sector and will soon present same.
Please note that the FHA was not originally in the 2013 work-plan but was approved for reform by the NCP during the year. The restructuring plan for the FHA has been submitted to the Technical Board for review, while the recommendations for the policy, legal and regulatory frameworks for the Housing sector are being finalized for the consideration of the Board and NCP.
DEFINITE TRANSACTIONS IN NF&AR DEPARTMENT
Council had also mandated the Bureau to achieve the following milestones in 2014 as it relates to the NF&AR department:
Restructuring & Partial Privatization of Bank of Agriculture (BOA)
Partial Privatization of Bank of Industry(BOI)
Privatization of Nigeria Commodity Exchange (formerly ASCE)
Commercialization of National Parks
Restructuring/Corporatization of FHA and reform of the Housing Sector
F. ELECTRIC POWER DEPARTMENT
In the Electric Power Sector, the Bureau would conclude the residual Labor Issues and also sell the non-operational assets at Oji & Calabar Power Plants.
Jointly conclude the privatization of NIPP Plants with the NDPHC.
The Bureau would also be working with relevant stakeholders in meeting the conditions precedent for the declaration of Transition Electricity Market and to continue to handle post privatization issues relating to the Discos, Gencos and TCN.
G. PROSPECTIVE TRANSACTIONS IN OIL & GAS DEPARTMENT
In the Oil and Gas department, the following are the prospective transactions:
Privatisation of Port Harcourt(1&2), Warri & Kaduna Refineries
Conclude sale of SPDC assets
It should be noted that the labor unions have expressed their willingness to dialogue with government to develop appropriate Business models for the refineries. This will be followed up and should lead to the commencement of the privatization process in 2014.
The Steering Committee is expected to soon commence work and develop an appropriate framework for privatization that is acceptable to all stakeholders
H. CAPITAL MARKET UNIT
The prospective transactions in the Capital Market Unit for 2014 are:
Initial Public Offering of FGN’s 24% shares in the Transcorp Hilton Hotels
Appointment of Privatization Advisers to carry out private placement of Federal Government shares in Nicon Insurance and Nigeria Reinsurance
Conduct a quick assessment to carry out deferred public offering of Nigerdock Plc shares.
Carry out a quick assessment to offer the remaining 30% of Federal Government shares in Egbin Power Plc to the general public
The Bureau will obtain financial statements and other data to determine the timing of the public offering of shares in PHCN successor companies.
A quick assessment to start the deferred public offering in SAHCOL
Council directed that the BPE continues to play a leading role in African Privatization Network & and other Bilateral Commissions
I. RESIDUAL ISSUES IN INDUSTRIES & SERVICES DEPARTMENT
In the Industries and Services department, Council directed the department to continue to handle the outstanding/residual issues in respect of the following enterprises:
o Lafiagi Sugar Company
o Iwopin Pulp & Paper Company
o Nigeria Sugar Company
o Lagos International Trade Fair Complex
o Nigeria Paper Mill, Jebba
o NNMC, Oku Iboku
o Tafawa Balewa Square
o Nigeria Hotels Limited
PROSPECTIVE TRANSACTIONS IN I&S DEPARTMENT
The prospective transaction in the Department is the privatization of the Nigeria Romania Wood Industry, Ondo, once some legal issues are resolved.
J. POST PRIVATIZATION MONITORING DEPARTMENT
The Bureau is responsible for monitoring the performance of privatized enterprises to ensure adherence of investors to the Share Purchase Agreements, Performance Agreements and full implementation of investors’ Post Acquisition Plans. Council directed that specific emphasis would be placed on monitoring PHCN successor companies. Council has approved a capacity building programme to enable effective monitoring of the power companies.
Distinguished members of the Press, ladies and gentlemen, the BPE/NCP would continue to use the reform and privatization programme to institute corporate governance mechanisms to reduce government transfers to PEs and improve efficiency in the economy. The meteoric rise in tele-density, growth in the capital market, efficiency gains at the seaports and stoppage of budgetary provisions for privatized public enterprises and the use of the savings for social services are the benefits accruing to the economy.
Thank you for your attention.
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Being the text of an address to Journalists by Mr Benjamin Ezra Dikki,Director General,BPE on Tuesday , March 25, 2014 in Abuja