The successful completion of payment for the electricity generation and distribution companies has set a record in government earnings from privatised enterprises, EVEREST AMAEFULE writes
In financial terms, the Federal Government has realised more through the ongoing sale of electricity companies than it realised through the sale of 122 other companies in a period of 13 years.
Information obtained from the Bureau of Public Enterprises showed that in 13 years (1999-2012), the Federal Government realised N251bn from the sale of 122 entities spreading across several sectors of the economy.
However, in just one transaction signposting the reform of the power sector, the Federal Government has already realised more than N350bn, which is at least N100bn more than it realised through the years on privatisation transactions.
While the sum of $1.26bn was realised from the sale of 10 electricity distribution companies, $1.06bn was realised from the sale of five generation companies.
The successful opening of the financial bids for 15 successor companies of the Power Holding Company of Nigeria towards the end of 2012 opened the gate for the inflow of funds into the government’s coffer.
For the Abuja Distribution Company, Kann Consortium emerged as the preferred bidder; Vigeo Power Consortium for the Benin Disco; West Power and Gas, Eko Disco; Interstate Electrics Limited, Enugu Disco; while for the Ibadan Disco, Integrated Energy Distribution and Marketing Limited emerged the preferred bidder.
The EDC/KEPCO Consortium emerged the preferred bidder for the Ikeja Disco; Aura Energy Limited, Jos Disco; Sahelian Power Limited, Kano Disco; 4Power Consortium, Port Harcourt Disco; while Integrated Energy Distribution and Marketing Limited emerged for the Yola Disco.
For the power generation companies, North-South Power Limited emerged for the Shiroro Hydro Power Plc; Mainstream Energy Solutions, Kainji Hydro Power Plc; CMEC/EURAFRIC Energy Limited, Sapele Power Plc; Amperion Power Distribution Limited, Geregu Power Plc; while the Transcorp Consortium emerged for Ughelli Power Plc:
Two consortia also recently emerged preferred bidders for the last of the two PHCN successor companies, Afam Power Plc and Kaduna Electricity Distribution Company.
With a bid of $260.05m, Taleveras beat TES Power to emerge the preferred bidder for Afam Power Plc, the last of the generating companies carved out of the PHCN.
Similarly, Northwest Power Limited emerged the preferred bidder for the Kaduna Electricity Distribution Company, the only remaining of the 11 distribution companies.
Analysts say the size of the financial inflow does not only show the size of the electricity industry, compared to other business entities that had been sold, but also the magnitude of impact the privatisation exercise is expected to have on the rest of the economy.
For the Director-General, Bureau of Public Enterprises, Mr. Benjamin Dikki, the successful privatisation of the electricity firms will stand as one of the major achievements of President Goodluck Jonathan’s administration.
According to Dikki, with the power sector in private hands, Nigeria will benefit from increased power supply and a boost in agricultural and industrial development.
His only regret is that the country does not have the capacity to supply enough gas to support the envisaged increased capacity now that the private sector is about to take over power generation and distribution in the country.
The Chairman, Technical Committee of the National Council on Privatisation, Mr. Atedo Peterside, however, has a more fundamental regret.
To him, the integrity of what would have been a clean outing in the history of privatisation in the country has been compromised by the BPE.
According to Peterside, the decision of the BPE to grant an extension of time to Interstate, the preferred bidder for the Enugu Electricity Distribution Company, rather than invite the reserve bidder, Eastern Electrics, in accordance with the set rule, diminishes the process and its integrity.
He said granting an extension to Interstate that never showed any seriousness in paying the balance of 75 per cent of the bid price until the deadline expired was equivalent to giving the company a discount.
In a letter to the BPE DG, Peterside said, “This bidder appears to be reckless and in-disciplined and did not make any payment whatsoever towards the $93.24m outstanding.
“Showing up with a mere term sheet on the eve of an important payment deadline is evidence of un-seriousness and/or lack of focus. The term sheet should have been presented weeks or months before the payment deadline and not 24 hours before the deadline. This was clearly a ruse to buy some time.
“In the circumstances, I would strongly advise that the preferred bidder be disqualified and that we instead turn to the reserve bidder in order to maintain the integrity of the process.”
His advice was not followed and since then, the process has been enveloped in controversy and different people involved in the transaction are trying to wriggle out of the ethical and transaction quagmire with no end in sight.