16 January 2013, Sweetcrude, Abuja – The Bureau of Public Enterprises on Tuesday disclosed that it has opened negotiations with the preferred bidders for the power generation and distribution companies carved out of the Power Holding Company of Nigeria, a situation expected to pave the way for the signing of the Sale and Purchase Agreement and the Shareholders’ Agreement with the preferred bidders.
Electricity privatization: BPE in final negotiations with preferred bidders
Speaking during a meeting in Abuja, the Acting Director- General, BPE, Mr. Benjamin Dikki, said the preferred bidders would be required to make 25 per cent payment of the bid sums within 15 working days from the signing of the agreements.
Following the approval of the National Council on Privatisation chaired by Vice-President Namadi Sambo, the preferred bidders had paid a total of $335,854,986.15, which the transaction process required them to pay as bid guarantees.
For the Abuja Distribution Company, Kann Consortium had paid $24.6m; for the Benin Disco, Vigeo Power Consortium paid $19.35m; for Eko Disco, West Power and Gas paid $20.25m; for Enugu Disco, Interstate Electrics Limited paid $18.9m; while for the Ibadan Disco, Integrated Energy Distribution and Marketing Limited paid $25.35m. NEDC/KEPCO Consortium paid $19.65m for the Ikeja Disco; Aura Energy Limited paid $12.3m for Jos Disco; Sahelian Power Limited paid $20,55m for Kano Disco; 4Power Consortium paid $18.64m for Port Harcourt Disco; while Integrated Energy Distribution and Marketing Limited paid $8.89m for the Yola Disco.
For the power generation companies, North-South Power Limited paid $16.75m for Shiroro Hydro Power Plc; Mainstream Energy Solutions, $35.68m for Kainji Hydro Power Plc: CMEC/ EURAFRIC Energy Limited, $30.15m for Sapele Power Plc; Amperion Power Distribution Limited, $19.8m for Geregu Power Plc; while Transcorp Consortium paid $45m for Ughelli Power Plc: The bid guarantees will be returned to the core investors when they make the final payments for the respective successor companies they won. Dikki said, “The BPE can confirm that its bankers have verified all the bank guarantees provided by the preferred bidders.
Thus, all the preferred bidders are qualified to enter this stage of the privatisation process, which is the finalisation of negotiations between the Federal Government and the bidders.
“It is important to remind you that 15 business days after signing of the Sale and Purchase Agreement or the Shareholders’ Agreement, whichever is earlier, or at a mutually agreed earlier date, the bidders shall make a down payment of 25 per cent of the share sales purchase price.
It is also in order to mention that it is after finalisation of negotiations that transaction documents will be executed. “Today, we are on the verge of seeing the Promised Land.
The marathon, which began in 1999 with the constitution of the Electric Power Sector Implementation Committee by NCP to undertake a comprehensive study of the electricity power industry, is about to breast the tape.”
He also said, “The participation of the private sector should bring about higher generation capacities through the provision of more efficient and cost effective power stations and improvements in the distribution sector in the areas of billing and collection, and distribution networks.
“The end result of what we are starting today will be the execution of the transaction documents in a few days that will commence the process of eventual hand over of the successor companies to the core investors.”
Dikki listed government’s efforts to ensure smooth handover of the companies to core investors to include execution of agreement by government and labour that guaranteed the cooperation of the latter in the process.
He said the government was working to raise the funds to effect the payment of workers’ final entitlements. According to him, title documents to landed properties are being vigorously pursued and the BPE is collaborating with the Ministry of Lands, Housing and Urban Development to ensure resolution of land and property title.