A Review of the Nigerian Energy Industry

PHCN: BPE to sanction bidders who fail to meet 75% payment deadline

Acting-Director-General-BPE-Mr-Benjamin-Dikki26 June 2013, Abuja – The Bureau of Public Enterprises, BPE, has warned that investors, who fail to pay the balance of the 75 per cent of offer value of their bids for the successor companies carved out of the Power Holding Company of Nigeria, PHCN, within six months from the date the mandatory 25 per cent bid payment was made, would be penalised.

BPE’s Director General, Mr. Benjamin Dikki, gave the warning while speaking on Nigerian Television Authority (NTA) Channel 10 programme in Lagos.

Dikki, according to a statement by the Bureau’s spokesman, Mr. Chigbo Anichebe, said the investors were expected to fully take over the power assets after paying the balance of 75 per cent bid price since they had made the mandatory 25 per cent payment assured them that power supply would improve when the private investors take over.

He expressed the confidence that all the investors were serious businessmen, who have the required financial means to pay the bid price.

The BPE boss urged that the investors be given time to increase capacity as “they (investors) will after take over, re-tool and bring in new machinery like turbines which are not easily bought off the shelf to put power on proper footing”.

He, however, expressed the confidence that all the investors were serious businessmen who have the required financial muscle to pay the bid price.

Dikki also allayed fears of monopoly by investors, stating that the necessary framework and institutional checks had been put in place to regulate their activities and appropriate pricing.

Meanwhile, the preferred investors were making frantic efforts to raise the outstanding balance of their bid price for the power assets.

One of the investors said that given the challenges bidders encountered in raising the 25 per cent bid price, “everything humanly possible is being done to ensure that payment is completed at the agreed date”.

“The BPE has told us about the implications of not meeting the deadline. So if it means selling some of our assets, we will do that so as to meet the deadline for the payment of the bid offer balance,” said the source.

It was also gathered that Amperion Power Company Limited, the preferred bidder for Geregu Power Plc, which was among the earliest to pay the 25 per cent was looking at paying the balance of 75 per cent by July. A source hinted that the company had raised up to 50 per cent of the amount and expressed optimism that the consortium would meet the payment deadline.

All the preferred bidders of the PHCN successor companies met the March 21 deadline for the payment of the 25 per cent of the offer value of their bids.

The National Council on Privatisation, NCP, had given the investors only 21 working days to pay the mandatory 25 percent of their bid price for the electricity firms and to pay the balance of 75 per cent within six months at a date agreed to by both sides to close the transactions.

Although most of the investors had difficulty raising the funds because their foreign partners for the power utilities were merely technical partners who were unwilling to put down equity for the deals, all the 14 bidders overcame the challenges and met the March 21 deadline given by the NCP.

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