A Review of the Nigerian Energy Industry

Privatisation: Shiroro Power bidder pays

Shiroro-dam131 August 2013, Abuja – North-South Power Company, which only made a partial deposit for the Shiroro Power Plc, at the expiration of the deadline for payment last Wednesday, has finally completed the full payment for the power plant.

A Presidency source which confirmed the payment, said on the telephone that North-South Power was now free to take possession of the power plant, which is one of the 15 PHCN successor companies sold off to private investors by the Bureau of Public Entreprises, BPE.

The investors had earlier paid $27.913million being a quarter of the plant valued at over $111.654million, as commitment bond demanded by the Federal Government.

Recall that at the close of work at 5pm last Wednesday, all the preferred bidders for the successor companies except those for Enugu Distribution Company, DISCO, and the Shiroro Plant could not meet the payment due to foreign inter-bank transfer challenges.

However, while the Shiroro Plant was a smooth sail for the preferred bidder, the Enugu DISCo was enmeshed in controversies. Sources revealed that due to the funds transfer challenges, the preferred bidder for Enugu DISCO, Interstate Electrics Limited, was cut off by the deadline.

Interstate Electrics, which won the bid earlier in the year, had paid the mandatory $31.5 million or 25 percent of the bid value. The firm was meant to pay the balance of 75 percent or $94.5 million last Wednesday.

Strangely, more than a week after the conclusion of the transactions, the National Council of Privatisation, NCP, is yet to officially comment on the process or invite the reserved bidders for the companies, whose preferred bidders failed to meet the deadline.

According to the Vanguard’s source, “Shiroro was a smooth sail because there was no reserved bidder for the plant, unlike Enugu DISCO, which had a reserved bidder.”

The source noted that although the NCP has not invited the reserved bidder for the Enugu DISCO, the investors, Eastern Electric Company Limited, has been agitating to be invited. He said: “The NCP has not invited any reserved bidder to proceed to payment, but the Enugu DISCO reserved bidder has been agitating to be invited.”

On account of the imbroglio, interested parties for the various groups have been engaged in media war, with Eastern Electric declaring its preparedness to pay $126 million for the takeover of the Enugu asset, which provides power to the South Eastern part of Nigeria.

Meanwhile, the NCP had been advised to invite the reserved bidder for the Enugu DISCO, as failure to do so would set a bad precedent for future privatisation programmes and for investors coming into Nigeria.

– Vanguard

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