The lobbying by Interstates Electrics, the preferred bidder for Enugu Distribution Company (Disco), to make the National Council on Privatisation (NCP) to bend the rules for it following its inability to meet up with the Wednesday deadline for the payment of the balance of the 75 per cent bid price is causing rumpus among council members, THISDAY checks have revealed.
Interstates, which is promoted by businessman, Emeka Offor, was preferred to acquire the Enugu Disco and like others, it had initially paid the mandatory 25 per cent bid price but was unable to meet up with the 75 per cent balance at the expiration of the deadline set by the Bureau of Public Enterprises (BPE).
Fourteen other bidders beat the Wednesday deadline Thursday by paying up the 75 per cent balance.
Transnational Corporation of Nigeria (Transcorp) Plc Chairman, Mr. Tony Elumelu, whose company’s consortium, Transcorp/Woodrock, is the preferred bidder for Ughelli Power Plc, however said Thursday that the participation of the conglomerate in the power sector reform initiative was aimed at making life better for Nigerians and impacting positively on the economy.
This is just as the federal government has declared its readiness to allow the private sector to takeover the power sector by declaring the Nigerian Transition Electric Market (TEM) open following the comprehensive response of preferred bidders for successor generation and distribution companies of the Power Holding Company of Nigeria (PHCN) to the 75 per cent payment deadline for their respective assets.
THISDAY gathered that NCP members were divided over the council’s expected obligations to stick to established guidelines in the privatisation process, which ordinarily should make it impossible for Interstates to influence the rules and allow the reserve bidder, Eastern Electric Company, to take up the bid.
Interstates, it was learnt, has been involved in desperate attempts to twist the privatisation rules and get NCP to grant an extension of the payment deadline.
But Eastern Electric Company as the reserve bidder has also expressed its preparedness to pay $126 million to take over the Enugu Disco, which distributes power to the eastern part of Nigeria.
The consortium was formed by the five South-east states; Nestoil, which is a major indigenous operator in the upstream sector of the Nigerian petroleum industry; Aba Power Ltd and Geometric Power Ltd, led by former Minister of Power, Prof. Bart Nnaji; as well as the founding chairman of Diamond Bank Plc, Mr. Pascal Dozie.
The source also hinted that Interstates earlier had waivers at two different instances in the privatisation process, saying the company initially did not meet up with standards at both the technical evaluation and Aggregate Technical and Commercial (AT&C) Loss stages but was allowed to further participate in the process.
He also explained that if there were going to be any considerations to be made by the NCP, it would be for both North-South Powers and CMEC/EUAFRIC Energy JV, which made part-payments for the acquisition of Shiroro Power Plc and Sapele Power Plc respectively.
Meanwhile, Elumelu has assured Nigerians that the participation of the conglomerate in the power sector reform initiative of the federal government was aimed at improving their living standards as well as impacting positively on the economy.
Elumelu, while commenting on the payment of the $225 million, being the 75 per cent balance of the $300 million bid price for the Ughelli Power Plant by Transcorp Ughelli Power Limited (TUPL), a subsidiary of Transcorp Plc, said with the payment, TUPL was ready for the acquisition of the plant.
According to him, TUPL will in the next five years, increase the power generation of the plant from 300MW to over 1,070MW.
“This is a laudable and remarkable achievement; but it is only just the beginning. We can now embark fully on our strategy to contribute to the development of Nigeria’s power sector whilst creating long-term economic and social value for our stakeholders and the greater community. We fully expect our engagement on this world-class project to improve the living standards of all Nigerians as well as impact positively on our country’s GDP,” Elumelu added.
Also commenting on the successful acquisition, President/CEO of Transcorp, Obinna Ufudo, said: “Transcorp’s ability to achieve set goals and objectives propels us to target even larger investments in our selected business sectors with the potential to contribute significantly to Nigeria’s development. TUPL has extensive worldwide power sector experience in Africa, Europe and the Middle East, which underscores its unquestionable capacity to effectively manage the plant profitably in line with international standards.
“Following this remarkable milestone, we shall now take over the operations and management of the plant, deploy our strategy to ensure a smooth transition and in the near term, create a profitable business that will deliver greater outcome in terms of power to the nation. Our inclination to success consistently translates to value for all our stakeholders, one of the goals which we pledged from the outset.”
On his part, the CEO of TUPL, Adeoye Fadeyibi, said: “This is an exciting day for us as a company as well as the power sector and every Nigerian,” adding that the acquisition of the power asset marked the beginning of an era where power becomes constant and within reach.
“We plan to deliver on capacity targets and sustain the momentum using people and resources to achieve operational excellence,” he said.
The federal government yesterday however said it would soon declare the TEM open for investors in the sector to commence real business following its record of substantial compliance in payments by preferred bidders for the sale of successor companies of PHCN.
It said in a statement from the Ministry of Power that by the close of transaction on Wednesday night, all of the preferred bidders, except for the Enugu Disco, had met their contractual obligations under the power privatisation process, thus confirming THISDAY’s exclusive report yesterday.
“The completion payment now entitles the preferred bidders to take full possession of the 15 PHCN unbundled entities (10 distribution companies and five generation companies),” it added.
The statement quoted the Minister of Power, Prof. Chinedu Nebo, to have said that he would soon formally declare the TEM open to enable the investors commence business in earnest and further drive the process.
Nebo also reassured Nigerians and investors of government’s resolve to pursue the transformation agenda to the end as well as to monitor the emerging transition market in order to protect the interests of both the citizenry and the investors.
According to him, the stability of the national grid is being enhanced to ensure effective transmission of any quantity of power being generated in the new dispensation while efforts are also being made to provide more electricity off-grid, especially for the rural areas.
Information from This Day was used in this report.