PHCN Assets: Reserve bidders prepare to take over Discos

phcn[1]15 August 2013, Abuja – A number of reserve bidders for the 10 distribution companies, Discos, carved out from the Power Holding Company of Nigeria (PHCN) have indicated their readiness to step in with their reserve bids, if the preferred bidders for the distribution assets fail to pay up their remaining 75 per cent bid prices within the stipulated timeframe.

However, power sector experts, who spoke to THISDAY Wednesday, warned that the reserve bidders should be careful about what they ask for, as they are bound to encounter the same challenges confronting the preferred bidders.

In response to the Tuesday’s request for an extension of the deadline for payment of the outstanding balance by 10 of 11 preferred bidders for the Discos, some of the reserve bidders, who spoke to THISDAY on the condition of anonymity, warned that the request would derail the whole PHCN privatisation process if the federal government concedes to it.

They explained that the PHCN privatisation process had an agreed transaction guideline that was initially agreed on by investors, adding that the guideline should be strictly adhered to; otherwise, the whole process will amount to “rigging and gaming.”

An official of one of the reserve bidders told THISDAY in an interaction Wednesday in Abuja, that the federal government and its privatisation agencies must not agree to the request for deadline extension made by the preferred bidders.

He specifically asked the National Council on Privatisation, NCP, and Bureau of Public Enterprises, BPE, not to take the request into consideration.

“This is a privatisation process that saw a minister resign his position just to save the process and now they are asking for an extension of the payment deadline. How realistic and honest is that request, if they agree to it, then it is fraudulent.

“We want them to succeed but the government and the preferred bidders must adhere to the process and guideline that has been established otherwise the whole thing will amount to gaming and rigging of the process,” one of the reserve bidders said.

He further said: “They made unrealistic offers just to grab the bids; we knew there was no way Nigerians banks could finance the deals alone, now it is time to pay up, they are requesting for extension in deadline. That will be an unfair grant if the government concedes to it.

“The minister of power, Nebo should have no business discussing this with the preferred bidders because the privatisation process is not within his purview, he must be careful in his dealings with the preferred bidders as the international community is watching. Any exception by the BPE and NCP means that the process has been compromised and should spur the interventions of the president and members of parliament.”

Speaking on the need for President Goodluck Jonathan’s intervention as well as a possible inquiry into the process by members of the National Assembly, the official said: “President Jonathan needs to be vigilant of this process now considering his reliance on the power sector to push his transformation agenda forward. The National Assembly should also watch the process keenly and initiate a legislative inquiry on the process.

“Stakeholders are saying that if the BPE diverts from the process, then the legislature would have no option but to step in. The National Assembly should watch the process and prevent any attempt to rig it at this stage.”

Some of the reserve bidders for the distribution companies include Honeywell for Eko Distribution Company, Eastern Electric Nigeria Limited for Enugu, NEDC/KEPCO for Ibadan and Vigeo Power Consortium for Ikeja.

The preferred bidders under the auspices of the Roundtable of Distribution Companies (the Disco Roundtable) had in their meeting with the Minister of Power, Prof. Chinedu Nebo, asked the government to among other things, consider extending the deadline for payment of the 75 per cent bid price by 31 days away from the August 21, scheduled deadline.

They equally requested for Nebo’s assistance in accessing the electricity subsidy fund provided in the Multi Year Tariff Order (MYTO), to which Nebo declined, saying they were not legal owners of the assets yet and so do not have the locus to make such request.

He equally asked them to pay up the 75 per cent bid price with consideration to government’s reliance on the funds to meet up with its obligations in the privatisation process.

Chineme Okafor, This Day

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