Though the preferred bidder for Enugu DISCO, Interstate Electric Limited, the firm floated by multi-billionaire businessman Sir Emeka Offor, did not meet the August 21 deadline, LEADERSHIP gathered from credible Bureau of Public Enterprises (BPE) sources that the company finally made payment of $94.5 million, which is the 75 per cent balance for the DISCO, on Friday, September 6, 2013.
There had been intense lobbying within government circles for the DISCO to be handed to the reserve bidder following the inability of Interstate to make full payment at the expiration of the deadline.
Stakeholders have accused the BPE and NCP of bending the rules for Interstate Consortium by giving it more time rather than giving the reserved bidder, Eastern Electric Nigeria Limited (which has Geometric Power, the company of former minister of power, Prof. Barth Nnaji, as a member), the opportunity to come in and make the payment.
BPE sources said they did not lower the standard, claiming that Interstate took advantage of the moratorium contained in the Share Purchase Agreement (SPA) which gives the preferred bidder a 21-day grace period after the deadline to make payment after which it would forfeit the bid to the reserved bidder. BPE claimed that Interstate paid before the end of the 21-day moratorium.
Sources close to the BPE said that various interests were at play, but added that the bid could not be cancelled as Interstate had the backing of powerful officials in the presidency.
“Some members of the technical committee wanted the bid cancelled and given to the reserve bidder, but since Interstate had the backing of powers within the presidency, it was very difficult to do so. This is especially given that the company had taken advantage of the 21 working days’ grace and made full payment,” said the source. “It is not expected that the sale will be reversed, but whatever decision the technical sub-committee takes today will be tabled before the NCP for final approval.”
When contacted, chairman of the technical sub-committee Mr Atedo Peterside confirmed the meeting but declined further comment on the matter, saying it would be unfair to pre-empt the outcome of the crucial meeting.
Peterside said: “A meeting of the Technical Committee of the National Council on Privatisation has been convened for Tuesday morning. I am the chairman of that committee. It would be inappropriate for me to second-guess the outcome of a meeting which has not even held.”
Although the outcome of the meeting is expected to be ratified by the NCP, sources said the presidency wants the matter resolved as urgently as possible.
A newspaper report had quoted Peterside as blaming the leadership of the BPE for frustrating attempts by his committee to evaluate the controversial sale of the Enugu Distribution Company.
Interstate Electrics, the winner of the bid for the company, failed to make the mandatory payment of $490 million at the close of the deadline on August 21. However, the failure of BPE to invite the reserve bidder to take over the slot had incurred the anger of stakeholders in the region.
A source disclosed that the presidency had to step in so as to give credibility to the privatisation programme by directing the BPE to make it possible for the technical committee of NCP to meet on the matter without further delay. Peterside was said to have been under pressure from the 23-member technical committee to call an urgent meeting.
He was quoted as saying that his committee was unable to meet as the BPE failed to release funds to pay for hotel bills and sitting allowances of the committee members, a development viewed as a veto of all the efforts to convene a meet;ing of the technical committee.
He was quoted as saying, “As you are all aware, the technical committee serves as an advisory/due process watchdog over the BPE and we are accountable to the NCP. Accordingly, I find the DG’s surreptitious attempt to keep us in the dark objectionable in the extreme.”
Following the passing of the deadline and the failure of Interstate to pay up, governors of the south-eastern states were said to have started mounting pressure on the presidency to intervene by calling the reserve bidder to purchase the power asset, but so far the BPE appears bent on following a determined course, which has now called to question the integrity of the power privatisation programme.
Meanwhile, ahead of the expected meeting of the NCP and the BPE, the confidence of government on the ability of Interstate Electrics to efficiently manage the Enugu company is said to have lately grown following revelations that Interstate is the only firm that has thus far attracted offshore financing.
The offshore financing, sources said, came from banks whose operations are guided by “global best practices and strict governance and monetary policies” as a reputable multinational financing organisation, a BPE source said yesterday.
The BPE source added that a recent visit by the agency’s officials to one of Interstate consortia -- the Metropolitan Electricity Authority of Thailand (MEA) -- was satisfactory, as doubts on their electricity distribution prowess were erased. Drawing from their foreign partnership experience, Interstate is said to have developed the best structure thus far.
The consortium incorporated as a vehicle for the purpose of acquiring and operating electricity distribution companies in Nigeria emerged the preferred bidder for the Enugu DISCO after a rigorous bidding process in the sale of PHCN in 2012. It has an Aggregate Technical, Commercial and Collection (ATC & C) loss reduction proposal of 20.83 per cent, which is far above that of other competitors in the bidding process.
Source: Leadership
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