Sale Of Power Firms A Fraud, Govs Say-Daily Trust



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Written by Fidelis Mac-Leva & Yunus Abdulhamid

Governors of Edo, Ekiti, Delta and Ondo states have rejected the company selected as preferred bidder for the Benin electricity distribution company, saying the power sector privatisation process was fraudulent and opaque. Vigeo Power Consortium was declared as the would-be buyer of the Benin distribution company (Disco), which serves the four states, beating the Southern Electricity Distribution Company that has the backing of the governors.

Governors Emmanuel Uduaghan (Delta), Adams Oshiomhole (Edo) and Kayode Fayemi (Ekiti) told a news conference in Abuja yesterday the bidding process was fraught with sharp practices, and vowed never to allow Vigeo take charge of the Disco.

In a swift response, however, the Bureau of Public Enterprises said it was the bidding backed by the governors that was fraudulent and not the one they are opposed to.

Uduaghan said, “Our states have invested heavily in power generation, transmission and distribution across the length and breadth of our respective states as we recognised the importance of power as the precondition for socio-economic growth and industrialisation of our states.

“It is in this vein that we participated and came out as the most technically competent and have the consortium that is most suited to the peculiarities of our region.

“In our region, you cannot succeed in operating the utility without the participation of the state governments, on ground knowledge and relationships with the different stakeholders such as youths, communities, leadership etc.”

Speaking in the same vein, Oshiomhole described the power sector privatisation process as a racket, saying considering the importance of the sector, it should not be reduced to “the big boys.”

He said, “The technical qualification criteria also failed to take into consideration the peculiarities of the various distribution companies, otherwise, why would a company whose current service territory is 500 square kilometers be technically qualified to operate a 57,000 square kilometer service territory in an area like the Niger Delta region without any local knowledge of this troubled area?”

For his part, Fayemi said: “We have nothing against the winner but the process and competency; we are concerned with the ownership and interest of our people. We are disappointed with the outcome of the bidding process because it lacked credibility.” Governor Olusegun Mimiko of Ondo State was not at the news conference but the three governors said their position was collective.

‘Fraudulent losers’

The Bureau of Public Enterprises (BPE) yesterday responded to the state governors.

In a statement read on the Nigeria Television Authority (NTA) last night, BPE director-general Bolanle Onagoruwa rejected the governors’ position, saying the bidding that they backed was fraudulent.

Also, BPE spokesman Chukwumah Nwokoh spoke to Daily Trust, saying “The process was credible, transparent and followed due process.

“We religiously followed the process; we did not deviate a bit. They were aware from the onset that a new strategy was going to be used to announce the would-be winners. And this was what we followed.

“You know that the NCP Technical chairman (Mr Atedo Peterside) said at the bidding on Tuesday that Aggregate Technical, Commercial and Collection (ATC&C) loss reduction proposal was we used in determining the leading would be buyer.

“And one thing these governors should also know is that the technical chairman did say that winners have not emerged yet; that those leading would still have to be subjected to serious scrutiny by NCP headed by the VP. So, it would not be fair to us and Federal Government if some governors can say the process was fraught with sharp practices.”

Vigeo Power Consortium is made up of four partners: Vigeo Holdings (Nigeria), Global Utilities Management Company Limited (Nigeria), Africa Finance Corporation (AFC) and North Delhi Power Limited, a subsidiary of Tata Power Delhi Distribution Limited of India.

A businessman, Mr Victor Gbolade Osibodu, is the chairman of Vigeo Holdings, according to information on its website.

Southern Electricity Distribution Company Consortium is made up of seven partners: Uttar Gujarat Vij Company Limited (India), Income Electrix Limited (Nigeria), Smartworks Global Resources Limited (Nigeria), Pinnnacle Power Projects & Services Limited, Fountains Holdings Limited (Nigeria), Citadel Nominees (Nigeria) and NJ Services (Nigeria).

Workers reject bids

The Union of Electricity Employees (NUEE) also yesterday rejected the offer of N197 billion for the acquisition of 60 percent equity in each of the 10 electricity distribution firms as announced by the National Council on privatization (NCP) on Tuesday.

Secretary General of the union Comrade Joe Ajaero in a telephone interview said the entire exercise was fraudulent.

He said, “How can you have a company that makes N300 billion in a year and you sell it N200 billion forever?”

“I am saying that these companies will be sold to cronies of people in government. Those highly connected. The poor will not benefit. No foreign investment coming in, no managerial abilities and even the financial muscle is not there. It’s money from banks.

“If you now sell it for N200 billion and my entitlement is N500 billion, you have to go and borrow money and pay me because the asset is worth N3 trillion and if sold at the appropriate rate, you would have saved N1 trillion in the nation’s coffers.”

He also faulted the NCP for not setting aside the 10 percent equity meant for workers of the companies as provided by the laws of the NCP. He said the workers would not be intimidated but would fight to have their rights enforced.

Sixteen companies participated in the bidding, which is part of government’s plan of unbundling up the Power Holding Company of Nigeria (PHCN) and selling it off as 11 distribution and six generation companies with the overall aim of ending chronic power shortages in the country.

A number of the companies involved in the bids are backed by powerful interests but have technically capable partners, while others have little or no power sector experience.

Integrated Energy, which is chaired by former head of state Abdulsalami Abubakar and is partnered by the Philippines’ largest power retailer Manila Electric, bid the highest efficiency target for four Discos—Yola, Ibadan, Eko and Ikeja.

Chrome Energy, chaired by Mr. Emeka Offor, is part of the highest bid for assets in Enugu and Abuja.

Sahelian Energy SPV Limited, which has Vice President Namadi Sambo’s ally Yusuf Hamisu Abubakar among its backers, emerged the lead company in the only consortium bidding for the Kano firm.

 


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