Mike Oduniyi
19 December 2005
Lagos — Privatisation of the Port Harcourt refinery has again suffered another setback after the Bureau of Public Enterprises (BPE) cancelled the bids submitted by four consortia for the acquisition of a controlling stake in the nation's biggest refinery.
The BPE in a statement released yesterday said that the consortia namely, Chrome /Chinese Petroleum Corpora-tion/Essar Oil Consortium; the Oando/Shell Group; Transn-ational Corporation (Transcorp) and Refinee Petroplus Consortium, did not attain the minimum qualifying mark of 60 points to qualify for the opening of their Financial Bids.
The companies have, however, been granted the right to re-submit fresh bids for the refinery while BPE said it had communicated a new deadline for submission to the companies.
According to the BPE statement signed by its Head, Public Communications, Mr. Chigbo Anichebe, evaluation of the bids from the companies placed greater emphasis on the presence, within a technically qualified consortium, of a competent refinery owner/operator with experience in refineries of similar complexity as Port Harcourt refinery.
The criteria used included:
Experience of the technical operator in the ownership, operation and management of a crude oil refining plant, which carried 30 points;
Quality and credibility of the bidder's Post Acquisition Plan ("PAP") for Port Harcourt Refinery, which carried 40 points;
Demonstrated financial capacity to finance up to $200 million of capital expenditure by PHRC within the next three years, 20 points and;
Adequate measures for addressing labour and other social considerations, 10 points.
"Regrettably, none of the bidding consortia attained the minimum qualifying mark of 60 points to qualify for the opening of their Financial Bids.
"From the outcome of the evaluation exercise, each Consortium's technical submission was seriously deficient in certain key areas. We will be communicating in writing with each Consortium, the key areas in which their submissions were deficient, which may help them should they elect to submit a new bid by the new deadline.
"Given that the technical submissions did not attain the minimum qualifying technical score, bidders have been advised to collect their un-opened Financial Bid envelopes and Bid Bonds from BPE," the privatisation agency added.
Although the BPE did not give the new deadline for submission of the fresh bids, it has however, altered the agency's set time table to have the Port Harcourt Refining Company (PHRC) privatised by December 21, 2005.
This would be the second time tenders for the company, which houses two refineries, the Old Port Harcourt refinery with 60,000 barrels per day (bpd) capacity and the 150,000 bpd New Port Harcourt refinery, would be thrown out after similar bids from interested investors were cancelled in December 2003.
Apart from the Port Harcourt refineries, the Federal Government also plans to privatise the 110,000 bpd Kaduna refinery, leaving only the 125,000 bpd Warri refinery for the Nigerian National Petroleum Corporation (NNPC) to manage.
The PRHC according to BPE data, has an authorised Share capital of N5 million, divided into 5 million Ordinary shares of N1 each.
Only one of the two refineries in the company is currently in operation, following the closure of the Old refinery while plant capacity utilisation presently stood at 60 percent.
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