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Processes Involved in Management of PHCN Stranded Assets

Processes Involved in Management of PHCN Stranded Assets

  1. Non-Core Assets
    1. Conduct Verification of the Noncore Assets;
    2. Carry out Legal Audit on the Noncore Assets;
    3. Recertification/Perfection of the Title Documents of the Noncore Assets, and
    4. Disposal of the Noncore Assets in line with the guidelines by the NCP/Procurement Act.
  2. Overtime Cargoes and Scraps/Obsolete Items
    1. Clearing of Containers from ports;
    2. Carry out inventory of the contents;
    3. Conduct valuation by Engineers from the Ministry of Power, Works & Housing;
    4. Engage professional Auctioneers in line with BPP guidelines, and
    5. Disposal of items.
  3. Receivables
    1. Seek for approval from the Ministry of Power, Works & Housing to approach BPP for no objection;
    2. Seek BPP’s approval for no objection for engagement of consultants;
    3. Carry out processes, and
    4. Engage successful consultants.

Non-Core Assets

NELMCO is mandated under its object clause 3 (a) of the Memorandum of Association to aggregate, manage and dispose the non – core assets of PHCN and apply the proceeds there from in settlement of the inherited PHCN liabilities.

The PHCN non-core asset were transferred in two (2) batches to NELMCO as follows:

  1. PHCN non-core assets transferred to NELMCO as Schedule B pursuant to the Transfer Instrument Executed by BPE and PHCN in September 2011 in line with EPSR Act 2005 (Transfer of Assets, Employees, Liabilities, Rights and Obligations) Order No. 46 of 2010.
  2. Additional PHCN non-core assets transferred to NELMCO as Annexure I to Schedule B pursuant to the transfer Instrument executed by BPE and PHCN in September 2011 in line with EPSR Act 2005 (Transfer of Assets, Employees, Liabilities, Rights and Obligations) Order No. 46 of 2010.

The non-core assets transferred in the aforementioned schedules include Lands, Buildings (within and outside Nigeria), Decommissioned Power stations etc.

The Vice President has reconstituted the committee on the sale on PHCN Non-core Assets. The committee previously chaired by DG, BPE is now chaired by MD, NELMCO with membership from FMoP, FMoF, VP’s office and DG, BPE. BPE are to provide secretariat services. The committee has begun drawing up the framework for the sale of those assets for the Ministry’s and NCP’s consideration. Valuation of these assets have been carried out by a Valuer engaged by BPE.

Receivables

Proceeds from Receivables

These are old PHCN debtors from distribution companies as at the handover date. A deed of assignment of pre-completion receivables to NELMCO was entered into with the DISCOS. While discussions are on-going with the Disco on this, a detailed framework on the best way to accomplish this is being conceptualized.

Inflow from Market Operator

This relates to consumer electricity cash collection as at 31st October 2013 (before handover to new owners). This is reconciled at N10.8bn between NELMCO and the Market Operator (MO). Remittances have started to be made by the MO on this.

Inflow from MDA Debt Recoveries

NELMCO in collaboration with the Federal Ministry of Power engaged consultants to recover Government debts owed PHCN from electricity consumption. A Presidential approval to recover about N29bn MDA debts has already been obtained with necessary deductions started.

Rent of PHCN Properties

This refers to rents to be received from PHCN properties across the country that fall within NELMCO’s mandate. This is been aggressively pursued.

Recoveries from Bank Reconciliation

This refers to funds to be recovered through revenue remittance audit of various banks in respect of PHCN funds that were not remitted to PHCN prior to the handover. This initiative will further be intensified by NELMCO.

Budgetary Appropriation

In principle, this might appear to be the simplest strategy by which FGN could provide the necessary funds to NELMCO but it needs a lot of political will.

Sale of PHCN Scrap Assets

This consist of outstanding PHCN scraps items at various PHCN Successor companies. His Excellency, the Hon. Minister of Power has approved the auctioning of these items.

PHCN Super Annuation Fund

The Superannuation Fund was established by a Trust Deed dated 10th April 2003, made between the then NEPA (now PHCN and its successor companies) of the one part and the accredited representatives of the Staff and Pensioners Unions of the other part.  The Fund however, was registered under the Companies and Allied Matters Act as NEPA Superannuation Fund Limited on the 29th of August 2005.  The NEPA Superannuation Fund Limited is still a  registered and subsisting company. The Superannuation fund is been liquidated by the BPE.

However, it is pertinent to note that NELMCO has already repatriated some of the funds from the Superannuation fund in Barclays Bank Trust Company Ltd United Kingdom and warehoused in NELMCO CBN Account.

PHCN Accounts Proceeds

These are proceeds from the PHCN Corporate Headquarters’ account transferred to NELMCO.

Sales of Overtime Cargoes

Consist of items ordered by PHCN for various power projects prior to the hand over date of 31st October 2013. His Excellency, the Hon. Minister of Power has approved the auctioning of these items to Discos, Gencos and TCN. NELMCO is also working on fishing out additional overtime Cargoes at the Ports

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