EPILEPTIC POWER SUPPLY: Coy Moves To Abort Privatization Of PHCN


In a calculated move to frustrate recent attempts by the Federal Government to improve power supply in the country through a proposed sale of its 51% stake in Power Holdings Company of Nigeria and all the subsidiaries under the state owned power generating company, the Federal Government has been dragged before a Federal High Court sitting in Abuja and presided over by Justice Daniel Abutu; the Chief Judge of the Federal High Court, by a company which claims to have a valid contract with the power company worth sum of 150 billion Naira from which it hopes to reap a profit of 75 billion Naira if allowed to satisfactorily complete the contract.

The company, Ziklagsis Networks Limited, claimed that it obtained, through an Agreement made on 5th December, 2003 with the then National Electric Power Authority, now PHCN, contractual rights to install One- Phase and Three- Phase electricity meters in different locations in Nigeria which, it said, is presently ongoing. It further claimed that subsequent upon the award of the contract to it, that it sought for financial accommodation from different bodies and institutions to meet the completion of the project in different stages for which it is currently indebted to various institutions including Union Bank of Nigeria Plc, Intercontinental Bank Plc, Cakasa Nigeria Limited and Unistar to the tune of 16.1 billion Naira so far.

Ziklagsis Networks Limited, through their counsel, Prof. S. A. Adesanya, a senior advocate of Nigeria, told the court that the multi billion Naira project it is handling for the state owned power company is being threatened by the Federal Government’s recent publications in the media that it is at an advanced stage of privatizing the electricity system in the country in collaboration with the Bureau for Public Enterprises through which some foreign companies have been invited to take over the activities of Power Holding Company of Nigeria; PHCN, and its subsidiaries, without consulting it or taking any step to protect its proprietary interest in its contract with the power company.

The embattled company further stated that it had no problem with PHCN which awarded the contract to it with the full knowledge of the Nigerian Government, but with the intervention of the Federal Government who is a non- party to the bilateral agreement, without notice and without observing the due process of law, and in circumstance which would destroy the immovable proprietary interest which it had already acquired for which the company is already owing third parties more than 16 billion Naira.

It further claimed that institutions from Canada, Ireland and India have been brought in by the Federal Government to take over PHCN despite several protests by workers in the power company who are questioning the utility of the take over or sale of PHCN to foreign institutions without adequate arrangement or protection for local parties who would be affected by the exercise.

Among the reliefs being sought by the company is an order of the court declaring the privatization or attempt to privatize PHCN by the Federal Government without regards to its multi billion Naira contract with the power company in such a way that its proprietary interest is destroyed or frustrated, is unlawful, unconstitutional, illegal, null and void.

It also prayed for an order of perpetual injunction restraining the Federal Government, the Bureau for Public Enterprises and the Attorney General of the Federation from submitting to or purporting to submit to or giving effect to the takeover of PHCN by anybody or an institution, local or foreign, without complying with relevant laws including constitutional provision.

In its opposition to Ziklagis Networks Limited’s request for an order of injunction against it, the Federal Government, represented by Chief Godwin Obla, argued that there is nothing in the Agreement which the company had with PHCN which prohibits the Federal Government from selling or transferring its shares in PHCN.

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Chief Obla contended that the agreement which the company is brandishing is for the supply of meters and argued that the company had not shown its legal right to the ownership and control of PHCN to support his call for the court to stop the takeover or privatization of the power company. He also queried whether Ziklagsis is a shareholder or involved in the management of PHCN or whether it is a co owner of the Federal Government’s 51% equity in the company to warrant his moves to stop the privatization of the power company.

He further contended that an order of injunction does not lie to restrain an undisputed owner of a property from disposing same in the absence of any agreement hindering such an unrestricted disposal.

Chief Obla further submitted that the Federal Government is only selling its 51% stake in PHCN to private investors in line with its policy to reduce its investment and management of the power company in order to enable it achieve its ultimate goal which is to provide uninterrupted power supply to the country. He also stated that the power company, which is worth about 900 billion Naira, as is presently constituted, is adversely affecting electricity supply in the country.

He contended that it is not the normal practice to grant an interim injunction if merely pecuniary matter is at issue and pointed out that the company in its supporting affidavit stated that the value of its agreement with PHCN is about 150 billion Naira which when satisfactorily completed would give it an earning of 75 billion Naira.

Obla posited that if the court grants an interim injunction against the Federal Government, that it will affect the entire nation as against the interest of the company which only covers only a few states of the nation and further contended that the selfish interest of Ziklagsis cannot over ride that of the general public who will benefit from the privatization of PHCN.

In its preliminary objection to the suit, Joe-Kyari Gadzama, a senior advocate of Nigeria and counsel representing the Bureau for Public Enterprises, posited that there is no reasonable cause of action against the Bureau of Public Enterprises in the suit as there is no contract between it and Ziklagsis Networks Limited and that the claims of the company against BPE is frivolous, speculative and academic.

While calling on the court to strike out the name of BPE from the suit, Gadzama maintained that the company has no locus standi to institute the suit against the Bureau of Public Enterprises.

By Nnamdi Felix / Abuja