A Review of the Nigerian Energy Industry

PHCN privatisation: Bidders ask Govt for deadline extension

Charles Adingupu

04 August 2012, Sweetcrude, LAGOS – WITH the expiration, Tuesday of the deadline for submission of bids for the assets of Power Holding Company of Nigeria, PHCN’s, generating companies, GENCOs, and distribution companies, DISCOs, interested firms have implored the Federal Government to extend the time frame in order to ensure proper participation of companies.

The bidders who made this appeal in a letter to the Director-General, Bureau of Public Enterprise, Ms. Bolanle Onagoruwa, noted in dismay that of the one hundred and eleven pre-qualified bidders for the PHCN successor distribution companies, only fifty-four of them successfully submitted their bids within the time.

Against this backdrop, the bidders urged the Presidency, the National Council in Privatisation, NCP, and the Bureau of Public Enterprises, BPE, to jointly reconsider granting a concessionary timeline that will elapse 5 p.m. August 31, 2012.

According to them, such gesture will give the pre-qualified bidders for the six generating companies and the eleven distribution firms as announced by the BPE at the pre-qualification stage the opportunity to make and/ or complete their submissions.

The group expressed fears that of the 25 bidders who submitted for the GENCOS, about 14 of them representing 56% may be disqualified for lack of complete documentation including but not limited to the required bid bonds.

A breakdown of the bidders, showed that across board, each of the GENCOS recorded a submission rate of 60% as Ughelli Genco which recorded 56% tops the list.

Conversely, the bidders disclosed that the Shiroro Genco recorded only one submission by all regards a failed bid ab-initio.

The bidders posited that the total population of EOI’s harvested for both the successor generating and distribution companies amounted to 190 but only 79 of them submitted their bids, adding that this translates to a submission rate of 41.5 per cent.

They however averred that global standards suggest that for such a process to be considered effective and truly competitive, at least a 60% submission rate should be recorded in a best scenario and at worst 50 per cent.

“In individual successor company terms, at least five bidding companies and at worst three should be evaluated for positions of “preferred,” ‘reserved’ and ‘alternate.’ They said that this allows for proper evaluation flexibility.

The bidders stated that the deadline for the submission of the bids for the DISCOs was 5p.m. last Tuesday and various consortium along with other bidders missed the time limit by just seven minutes with very valid reasons.

They recalled with pain that the conditions for the bid were constantly being changed by the personnel managing the process for the Bureau, adding that this was evidenced by the multiple deadlines set by the Bureau.

“With every change came the onerous tasks of adjustments and re-strategising and the consequent toll it took on the participating firms,” they said.

The bidders also lamented the non existence of multiple collection centres as would have been expected for investment of this magnitude as what recently obtained in the energy sector.

In the light of the above, the bidders enjoined the Federal Government to ensure that the power sector becomes vibrant once again by allowing the participation of credible Nigerian companies who have demonstrated genuine capacity to deliver in the face of daunting economic challenges in the company.

The bidders however stated that the country as a whole has so much at stake by ensuring that Nigeria’s destiny is in the hands of Nigerians rather than foreigners.

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  • We decry the bidders’ request for extension of the deadline because it speaks to poor preparation. Therefore, we implore the BPE to only consider the request if granting it doesn’t affect the fortunes of those who have taken the pains to prepare and have met the timeline.