About PSP

Countries the world over have launched privatisation programmes to improve the efficiency of state-owned enterprises. The Lagos State Water Corporation, the major water producer saddled with the responsibility of supplying water to the 12 million Lagos State residents, is now being considered for privatisation. The programme has commenced with the full supervision of the International Finance Corporation (IFC), a sister organisation to the World Bank, as an adviser to the state government.

There, however, exists a universal concern on labour issues. Observers and political interest groups, including employees of such state-owned organisations like LSWC, often express fears that privatisation will cause major job losses as new owners of privatised firms or private operators running concession contracts shed excess labour to improve efficiency and cut costs.

The adjusted privatisation strategy is mindful of the social and political consequences of job losses. The strategy is, therefore, geared towards:

Expansion of production capacity through concession contracts. This entails an investor bringing in money to develop new works and expanding the existing pipe network to improve service level and access. It envisages that when capacity is expanded more hands will be needed in the industry.
It is on record that the deregulation in the financial sector in the nineties led to an unprecedented increase in employment rate in the industry.

The strategy incorporates a properly negotiated labour transfer exercise that will ensure that investors are mandated to employ staff of Lagos State Water Corporation seen to be fit to work under different operational and administrative circumstances.

A regulatory structure, which will be an integral part of the change, will be responsible for monitoring the activities of private investors to ensure that no worker is exploited or ill-treated in the system.
All the contractual terms that guarantee the welfare of staff shall be clearly stipulated and enforced.

Some level of competition is envisaged in the evolving system.
This is surely a positive signal for labour. Competition for the best hands will enhance better wages and create room for others to grow.

The strategy will also encourage voluntary retirements through severance pay, i.e. paying workers gratuities that are fat enough to lure them into retirements, or award of post retirement contract within the system.

LSWC can boast of well-trained, highly exposed and seasoned staff that understand the system very well. It will, therefore, be unwise for any investor to ignore such people for new hands.

Many officers of LSWC have attended courses on modern water sector reforms and water management topics at reputable international institutions such as I H E, Loughborough University, International Labour Institute, USA, Institute of Public Private partnership, USA, among others.
They have also worked with various international consultants during the World Bank projects.
A training programme was carried out to train the staff to attain internationally acceptable standard of performance.

Privatisation will not lead to job layoffs. But it will require hard work, high level of productivity, honesty and commitment to organisational objectives. An investor wants value for his money, which his employees must give him.

The message to LSWC staff is that the party is over. It is time to work. Staff must train themselves and change their attitude to work if they must fit into the new dispensation.

The strategy will create many investment opportunities that are most suitable for those who have worked in the system. Many members of staff will be part of the bulk purchasing companies that will operate independently in the system.

Experience in many countries shows that workers engaged by privatised firms have often benefited by obtaining better-paying jobs, company shares, and improved training and career development prospects.

Back to Top