NIPPs: Concerns mount over alleged political interference, lobbying

Prof Chinedu Nebo

Prof Chinedu Nebo, Minister of Power

07 March 2014, Abuja – There are increasing concerns that the proposed sale of 10 Niger Delta Power Holding Company Limited (NDPHC) generation companies under the National Integrated Power Project (NIPP) scheme may be marred by emerging political interference and lobbying.

Specifically, there had been a surprising re-appearance of hitherto disqualified bidders among those initially pre-qualified for financial evaluation today.

The National Council on Privatisation (NCP) had approved today for the financial bids opening of 42 bidders.

The plants being offered for sale include the NIPP plants in Alaoji, Benin, Calabar, Egbema, Gbarain, Geregu, Ogorode, Olorunsogo, Omoku and the Omotosho Generation Company.
It was further gathered that of the over 50 bidders that applied for the purchase of the power plants last year, about 42 had been pre-qualified ahead of the financial bids opening, leaving out about 10 bidders for various reasons ranging from technical incompetence to clashes of interests and breach of market rules.

Insider sources further confirmed to THISDAY that some companies already disqualified are beginning to reappear on the list after what was described as “intense lobbying and pressure from very powerful government quarters.”

The source said: “In the case of the Omotosho power plant for instance, six companies were initially technically prequalified after more than a dozen had bided.
The number grew to nine overnight after interventions from some powerful government individuals, even in breach of market rules.”

One of the basic market rules precludes entities already having dominant interests in the previously sold Power Holding Company of Nigeria (PHCN) properties, like the Distribution Companies, from participating in the bids for the NDPHC generation entities.

The market rule seeks to prevent the emergence of monopolies in the generation and distribution of power, to eventually protect consumers from the negative consequences of monopoly, especially in a fledging economy like Nigerians.

Credible sources specifically cited two cases of potential monopolistic domination even against the grain of the philosophy as it concerns a partner in a South-west DISCO also vying to buy one of the plants and another core investor in a PHCN Phase 1 power plant also bidding for another, even after they had been technically declared ineligible.

The source added: “The parties involved had gone to politically lobby themselves back to the lists, in what is beginning to raise transparency questions on the planned sales.”

Reports earlier said the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, had in a meeting with NPDHC and the National Privatisation Committee (NPC) raised issues on the credibility of some of the bidding firms, a development which had eventually led to the identification and removal of some names from the bidding list.

Sources alleged that some of the prospective investors initially excluded from the bidding process are said to have resurfaced and supposedly ready for the technical evaluation.

The proposed sale of the NDPHC plants is pursuant to the ongoing unbundling of PHCN, which has witnessed the sale of some generating companies and 11 distribution companies in the country.
The sales are part of government holistic plan of ensuring stable power supply.

– James Emejo, This Day

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