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Revelation: PHCN Was Sold To PDP Top Members – PDP Chieftains

PHCN privatisation

A Peoples  Democratic Party (PDP) chieftain, Dr Katchy Onojuju has criticised the ways and manners in which the assets of the Power Holding Company of Nigeria (PHCN) were privatised.

The Bureau of Public Enterprises (PBE) had just completed the first phase of PHCN privatisation, a development that resulted in the emergence of 14 power distribution and generation companies.

Ononoju, in a statement titled: ‘’ Power Assets Privitisation: Bending the Rules Is Dangerous ’’, said the process leading to the sales of the six generation companies and 11 distribution companies was not in order. He said the assets were privatised to satisfy the yearnings of members of the ruling party.

Ononuju said PDP is noted for bending the rules to satisfy certain powerful interests, even when their competence has been called to question.

He said the Bureau of Public Enterprises and National Council on Privitisation undermined its own rules in the case of Enugu Distribution Company and Sapele Generation Company, adding that the development was capable of eroding confidence in the entire exercise.

He said: ‘’ In the case of Sapele, somebody bid for $201million and do not have the money to pay for it. If they could not pay for it all this while, then the other people that come second should be called on to automatically come and pay and move on. Instead of behaving like this, they are keeping the assets for certain people and bending the rules. It is fraudulent because things are not being done according to the rules that were set to ensure transparency and it is wrong.

Ononuju added: ‘’It costs about $2million to do due diligence to acclaim all those who came to bid and if you start undermining the rules in the middle of the game, they are not going to come back. And we are doing this just for the initial phase of the process that we envisage will get us 40,000 to 80,000 megawatts of electricity. So, what we are doing is small compared to what has to be done to get Nigeria to that target. Our international partners who have come to participate in this with us today will not have confidence in anything we do tomorrow.’’

According to him, companies that have shown profound lack of capacity to raise the required bid money to purchase the power assets can not be trusted to raise working capital and funds to upgrade the assets.

He praised the government for demonstrating the political will to privatise the power sector.

‘’After initial delay and some uncertainty, the National Council on Privatisation (NCP) last month approved the payment of the remaining 75 per cent of 14 out of the 15 bidders for the acquisition of the 15 Power Holding Company of Nigeria (PHCN) successor companies.

‘’Rising from its sixth meeting in the year, the NCP approved the late payments by North South Power and Interstate Electric Limited for Shiroro Power Plc and Enugu Distribution Company Plc respectively but 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 Share Purchase Agreement (SPA).

According to reports, the NCP had previously approved the payments of the 12 companies which paid on or before the August 21- due date. They include Amperion Power Co. Ltd (Geregu); Transcorp/Woodrock (Ughelli); Integrated Energy Company ( Ibadan ); NEDC/KEPCO (Ikeja); Vigeo Power Ltd. ( Benin ); Aura Energy Ltd. (Jos); Integrated Energy Company (Yola); Mainstream Energy Ltd. (Kainji);

Others are West Power & Gas (Eko); Kann Consortium ( Abuja ); 4Power Consortium ( Port Harcourt ) and Sahelian Power SPV Ltd. ( Kano ).

However, the Council 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. It was gathered that there were legal issues which needed to be resolved.

‘’Of particular interest here is the inability or reluctance of CMEC/EURAFIC consortium, the preferred bidder for Sapele Generation Company, to fulfill payment terms binding its successful bid.. It has emerged that the company started developing cold feet after it realise it had grossly over bidded by its $201,000,000 million bid far higher than the reserved price to $106 million and JBN-NESTOIL 106.500 million dollars which automatically made JBN-NESTOIL the reserve bidder. Government reserve price was pegged at 106 million dollars. Faced with the difficult task of raising the funds to beat the August 21 deadline for the payment of balance 75percent, the company developed cold feet and consequently failed to make any payment but only managed to pay $119million after the deadline had lapsed. Two clear months after the expiration of August 21 deadline, CMEC/EURAFIC consortium is yet to make whole its bid.

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