20 September 2013, Sweetcrude, ABUJA – The National Council on Privatization, NCP, on Friday approved the payment of the remaining 75 percent by 14 out of the 15 bidders for the acquisition of the 15 PHCN successor companies.
According to a statement made available to our correspondent in Abuja at the end of its sixth meeting for the year 2013, the Council approved the late payments by North South Power and Interstate Electric Limited owned by Sir Emeka Offor for Shiroro Power Plc and Enugu Distribution Company Plc respectively, subject to the late payment penalty as provided in clause 12.20 on interest for late payment and clauses 5.5, 5.5.1 and 5.5.2 of the SPA.
Council, however, referred the case of CMEC/EURAFIC consortium, the preferred bidder for Sapele Generation Company who had paid $119,887,156 of the $201,000,000 bid consideration to the Office of the Attorney General of the Federation and Minister of Justice for advice, among other legal issues it said were identified and that needed to be resolved.
NCP also directed the Office of the Accountant General of the Federation to ensure that all staff entitlements are fully paid by the week beginning September 23 and ending September 27, 2013.
Council further approved the protocol for the physical handover of the successor companies to the bidders that have fully paid the remaining 75% for the acquisition cost.
It would be recalled that in December 2010, the NCP advertised for expressions of Interest (EOIs) from prospective core investors interested in acquiring controlling stake in the 11 successor distribution companies (Discos) created out of the Power Holding Company of Nigeria. By March 4, 2011, the deadline for submission of EOIs, 180 applications were received for the 11 Discos.
Following the evaluation of the applications, 80 bidders were shortlisted. At the deadline for the payment of the data room access fee, 72 out of the 80 shortlisted bidders each paid the mandatory $20, 000 fees to purchase the Request for Proposals (RFP), have access to the data room and proceed to the next stage of the transaction.
All the prequalified bidders were given access to the virtual data room from September 1, 2011 to the proposal submission date of July 31, 2012. Pre-qualified bidders were also allowed to visit the distribution companies and physical data rooms that were located within the franchise area of each distribution company.
By the bid submission deadline of 5pm on July 31, 2012, the Bureau of Public Enterprises (BPE) received 54 proposals from pre-qualified bidders.
The received bids were opened and sorted out on August 1, 2012. All the 54 bids were confirmed to be complete in terms of having both commercial and technical proposals.
Out of the 54 bids, 10 of them failed the first test of completeness and responsiveness. The remaining 44 bids were then subjected to full technical evaluation. Out of the 44 bids, 32 bids submitted by 20 different bidders scored the minimum of 75% that was required to progress to the next stage in the process.
The final approval of the preferred bidders by NCP and its announcement for the successor companies was done on October 23, 2012 for the Discos.
The Nigerian electricity industry has been unbundled into generation and distribution companies and a single transmission company with a view to encouraging private sector participation and attracting foreign and local investment into the Nigerian power sector to ensure economic and reliable electricity supply.
The final approval of the preferred bidders by NCP and its announcement for the successor companies was done on October 23, 2012.
The Nigerian electricity industry has been unbundled into generation and distribution companies and a single transmission company with a view to encouraging private sector participation and attracting foreign and local investment into the Nigerian power sector to ensure economic and reliable electricity supply.
The Federal government is expected to generate over $2.6bn from the sale of the power assets.