The Presidency has met with investors in the National Integrated Power Projects, the Niger Delta Power Holding Company, Bureau of Public Enterprises and gas companies over what it described as “a stalled state” of the NIPP plants after their privatisation.
Our correspondent gathered that the Presidency’s worries had been heightened by the fact that seven months after the Joint Transaction Board comprising the Boards of the National Council on Privatisation and the NDPHC approved the preferred and reserved bidders for seven out of the 10 NIPP plants, the operational model appeared to be failing.
Though all the investors in the plants had made financial commitments, our correspondent learnt that they had not fully paid up the balance.
With inadequate gas supply being given as an excuse for the lull in the process, our correspondent gathered that the investors were not willing to pay any further sums and had formed an alliance to protect their interests and speak to the government with one voice.
A Presidency source, who revealed this to our correspondent, said in confidence, “The buyers are supposed to have paid fully by now. By the time the transaction was on, there was an improvement in gas supply. That situation then made them to pay. But with a major gas pipeline vandalised sometime this year, the story changed and most of the stations do not currently have enough gas to power them.
“Now, we cannot run two or three units of the ones that are ready simultaneously. It is either you shut one down to run the other; or you run them in proportions. We just alternate them because we cannot just keep them out of circulation. If you do that, it is going to cost us more to bring them back on stream.”
The source said the investors were now speaking under the umbrella of the NIPP Investors Forum and were trying to make the government to see how the issue of gas could be resolved.
“Being a private company is different from being a government company. If a government company doesn’t get gas, it will still be comfortable; but the private sector investor wants to buy the assets today and start making money from it immediately,” the source added.
The source also explained that the transaction was being handled by the NIPP in conjunction with the BPE, NCP and the consultant to the process, CPCs of Canada, and was being handled by a joint technical committee chaired by the Governor of Benue State, Gabriel Suswam.
Speaking on the outcome of the meeting, he said, “What the Presidency officials did was to take an input from both the investors and the other stakeholders. The report will be put together and if it is okayed, it will be sent to the Joint Board of the BPE and NDPHC, which is chaired by the vice president.”
Our correspondent also learnt that by next month, two of the investors would make full payment. But their identities were not disclosed.
When our correspondent contacted the spokesperson for the NDPHC, Mr. Yakubu Lawal, he said, “The joint technical transaction committee chaired by the governor of Benue State is addressing the concerns of stakeholders so as to close the NIPP transactions as quickly as possible.” He, however, declined to make further comments.
Vice President Namadi Sambo had earlier in the year directed that the sale of three of the power plants namely: Alaoji Generation Company, Omoku Generation Company and Gbarain Generation Company, which were affected by the litigation instituted by Messrs Ethiope Energy Limited, should be stepped down until the matter was resolved.
The Director-General, BPE, Mr. Benjamin Dikki, had also said the privatisation of the NIPP plants had been stalled due to inadequate gas supply.
He also said that allegation that the sale of the plants was stalled because of political reasons was untrue.
Dikki said the capital expenditure needs of the NIPP plants would be around $1.8bn (N288bn) in the next five years before they could perform maximally.
He said, “The power sector generally will require billions of dollars of expenditure over the next five years, and this expenditure is needed in order to achieve the goals of the electric power reform programme.
“The BPE will ensure that the purchasers are contractually obligated to make investments, while the Nigerian Electricity Regulatory Commission will monitor the implementation of these requirements closely and continuously.”
Source: The Punch