Court stops FG from privatising NITEL

  • Tuesday, December 06, 2005 - By Ise-Oluwa Ige
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ABUJA — A Federal High Court sitting in Abuja yesterday gave an interim order stopping the Federal Government from going ahead with the privatisation of the Nigerian Telecommunications Limited (NITEL). Bidding exercise for the national carrier by prospective buyers is expected to commence today but for the order of the high court.

Employees of NITEL had approached the court asking it to halt the move by the Federal Government to remove SAT–3 Cable system from the assets of NITEL before privatizing it.

SAT–3 Cable system is a telecom system that allows for international telecommunication traffic amongst telecommunications companies from the respective participating countries.

Presently, NITEL’s equity in SAT–3 is worth over the initial US $ 50 Million in 1998.
The NITEL staff who approached the court through their associations are contending that the removal of SAT–3 will deprive NITEL of its carrier status and will pose negative implication in the telecommunications industry.

They also contended that the privatisation of the national carrier would hit a brick- wall if SAT–3 was detached from the asset of NITEL, pointing out that “SAT–3 is a major feature that makes NITEL the first National carrier.

Although the case is yet to be heard on its merit, the presiding high court judge, Justice Babs Kewumi gave the interim order stopping the bidding exercise yesterday following an oral application by counsel to the NITEL workers, Chief Patrick Ikwueto (SAN).

Ikwueto had invited the court yesterday to issue an order on all the parties in the suit that the status quo ante belum be maintained in the suit pending the time their application would be heard.

He had told the court that if the order was not granted yesterday, that the Federal Government would go ahead with the privatization process of the national carrier and that the exercise would affect the res (the subject-matter) of the case.
Although counsel to all the Federal Government agencies who were all present in court yesterday opposed the oral application, the court ordered all parties in the suit to maintain status quo in the case.

The order of the court is to subsist until December 15, this year when hearing would commence in the matter before another high court judge in Abuja.
The unions used by NITEL staff as platform to invoke the jurisdiction of the court are the National Union of Postal and Telecommunication Employees (NUPTE) and Senior Staff Association of Utilities, Statutory Corporations and Government Companies (SSAUCGOC).

In the suit filed by their counsel, Dr Joseph Amasike, the Communications Ministry, NITEL, Bureau of Public
Enterprise (BPE), Nigeria Cabling and Telecoms Networks Ltd (NCNL) and the Federation Attorney General were named as respondents.
Specifically, the plaintiffs are praying the court for “an order of interlocutory injunction restraining the Defendants/Respondents acting by themselves, their agents, privies or servants or through whomsoever from excising, transferring and or alienating in any manner whatsoever the facility known as SAT–3/ WASC / SAFE submarine cable system from the assets of NITEL to any person or persons pending the final determination of the substantive suit.

They also seek an order of interlocutory injunction restraining the Defendants/Respondents acting by themselves, their agents, privies, servants or through whomsoever to take over the SAT–3/WASC/SAFE submarine cable systems from the assets of NITEL pending the final determination of the substantive suit.
By the suit, a legal obstacle has been placed on the Federal Government’s bid to privatise NITEL.

Although, the Bureau of Public Enterprise (BPE) had on July 22 2005 pre-qualified six investors for the sale of NITEL including MTN and Vodacom, the duo have withdrawn from the bid owing to the decision of government on SAT–3 cable system.

It was gathered that the Chief Executive of NITEL, Mr A. J. Mashi had written the Communication Minister, Mr Cornelius Adebayo warning against the plan to detach SAT–3 from the assets of NITEL.

In his letter dated September 26, 2005, Mr. Mashi warned that “failure in the privatisation of NITEL is most likely if SAT–3 is excised from the assets of the company as the prospective core-investors now on the site visits to NITEL installations will be discouraged from investing in NITEL”.
He further added, “NITEL’s expansion projects already approved and being implemented by the Board and Management will be jeopardised as creditors will withdraw on the ground of misinformation on the assets of the company”.

Describing SAT–3 as the “cash cow” of NITEL given its “high revenue generating capability”, he told the Communication Minister that “the investors interest in NITEL privatisation will be jeopardised with the removal of SAT–3 from NITEL assets”.

In spite of the advice on the implication of excising SAT—3, government maintained its position to go ahead by incorporating a holding company, Nigerian Cabling and Telecommunications Network Limited (NCNL) to take SAT––3 over.

Wary that such an excise would lead to the loss of their jobs as any investor who buys NITEL in ignorance, would upon realising that he had bought the carcass of NITEL sack the workers, the workers went to court to solicit its assistance.

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