Power assets: Govt rakes in N304bn from sale

 

About N304.82 billion ($1.957 billion) was paid into Federal Government's coffers last week when 14 of the preferred bidders who won the bids for the successor generation and distribution companies created from the unbundling of Power Holding Company of Nigeria (PHCN) finally paid up 75 per cent of the transaction value for the power utilities.

However, when the amount is added to the 25 per cent paid six months ago as initial deposits for the same assets, a total of N425.830 billion ($2.733 billion) would have been generated by the federal government through the sale of the power assets in less than a year.

A breakdown of the sums paid by the bidders last week showed that for the generation companies (Gencos), Amperion Power Limited, which won the bid for Geregu power station, paid $99 million; Transcorp/Woodrock which also won the bid for the Ughelli power plant paid $225 million; Mainstream Energy, which also met the payment deadline as prescribed by the National Council on Privatisation (NCP), paid $216.472 million for Kainji hydro power station; and NEDC/KEPCO paid $407 million as full and final payment for the 1,320MW Egbin power station.

Similarly, CMEC/Eurafric paid $120.034 million out of an outstanding balance of $150.75 million expected from the bidder for the Sapele power plant, while North-South Power paid $39.822 million from an outstanding balance of $101.442 million for Shiroro hydro power station.

CMEC/Eurafic and North-South Power are awaiting the go-ahead from the Bureau of Public Enterprises (BPE) to pay $30.41 million and $61.62 million respectively to complete the payment for Sapele and Shiroro power plants.

The lenders for both bidders, it was gathered, missed the deadline for the transfer of the balance on behalf of their clients by a few minutes last Wednesday, and have requested the permission of the BPE to close the transactions.  

For the distribution companies (Discos), of the 10 bidders approved by the NCP, nine met the deadline last week by paying the outstanding 75 per cent of the transaction value for the power assets.

Bidders that paid included Kann Consortium for Abuja Disco, which paid $123 million; Vigeo Power Consortium for Benin Disco paid $96.750 million; while West Power and Gas for Eko Disco paid $101.250 million.

In addition, Integrated Energy which won the bids for Ibadan and Yola Discos paid $171 million for both assets; NEDC/KEPCO paid for Ikeja Disco at $131 million ($98.250 million as 75 per cent outstanding) and Aura Energy Limited for Jos Disco at $82 million (($61.500 million as 75 per cent outstanding).

Other bidders that paid are Sahelian Power SPV Limited which won the bid for Kano Disco - $102 million and 4Power Consortium for Port Harcourt Disco - $93 million.

The only bidder that failed to meet the deadline was Interstate Electric Limited for Enugu Disco.
Since missing the deadline, Interstate’s promoter, Mr. Emeka Offor, has been lobbying to get the BPE and NCP grant his company a 20-day extension to pay for the distribution company.

Although BPE has bowed to his request, Interstate is however still encountering resistance from the Chairman of the Technical Committee of the NCP, Mr. Atedo Peterside, who sources informed THISDAY had written a letter to BPE insisting the company’s bid should be cancelled and the reserve bidder – Eastern Electric Nigeria Limited – invited to acquire Enugu Disco.

Peterside, sources said, is said to be concerned that Offor had been given one too many chances and that the rules should be applied in order to preserve the integrity of the privatisation process.

The power reform and privatisation process, which started eight years ago with the enactment of the Electricity Power Sector Reform Act (EPSR), provided for the establishment of the Nigerian Electricity Regulatory Commission (NERC), the unbundling of PHCN and privatisation of the successor companies, winding up of the holding company and transfer of stranded assets and liabilities to an asset management company, and the establishment of a bulk trader and Transition Electricity Market (TEM) for emerging participants in the power sector.

In the meantime, President Goodluck Jonathan has said with the successful conclusion of the sale of the generation and distribution companies, Nigerians will soon begin to enjoy the positive benefits of the privatisation of the power sector.

Speaking yesterday in Abuja while receiving a delegation of the Anioma Peoples’ Congress led by the Asagba of Asaba, Prof. Chike Edozien, Jonathan said all successful bidders for the electricity utilities had completed the payments required to complete the sales process, which he added was conducted in conformity with globally accepted standards and best practices.

“We are fully conscious of the centrality and importance of adequate power supply for our developmental efforts. We have challenges in the sector but we are constantly working to overcome them.

“We are currently in a transition phase in which the sector is being positively transformed. The sale of our generation and distribution companies is almost concluded. Finally, everyone has paid and in the shortest possible time, our power sector will take on a much more positive life of its own for the benefit of all Nigerians,” Jonathan assured the delegation.

The president, according to a statement by his Special Adviser on Media and Publicity, Dr. Reuben Abati, said his administration remained fully committed to significantly improving national infrastructure and would continue to work on rapidly developing railway links, airports, seaports, roads and other transportation services in the country.

“We are glad that you appreciate what we are doing. We will continue to work very hard so that Nigerians in all parts of the country feel the positive impact of our efforts to accelerate national development and progress,” he said.

Responding to the delegation’s request for his support for the creation of Anioma State, or presidential support for the next governor of Delta State to emerge from Delta North, in the event Anioma State does not become a reality before 2015, Jonathan said such matters did not depend on him alone.

He however assured the delegation that his party, the Peoples Democratic Party (PDP) believed in equity and fairness to all, and that all Nigerians should have equal opportunities to participate in the political process and contribute to the country’s political growth and development.

In its address presented by Edozien, the delegation thanked Jonathan for the commencement of work on the second Niger Bridge and the approval of a cargo terminal at Asaba Airport.