7 August 2012

Nigeria: PHCN Privatisation - NCP Silent On Investors' Request to Extend Bid Deadline

Chances that the National Council on Privatisation (NCP) will consent to requests by investors for the extension of the deadline for the submission of bid documents in the ongoing privatisation of successor generation and distribution companies of the Power Holding Company of Nigeria (PHCN) are very remote, THISDAY has learnt.

A source at the Bureau of Public Enterprises (BPE) revealed that chances of the bureau obliging the request of some of the bidders for an extension of the deadline which elapsed on July 17 and 31, respectively, are slim considering the likely repercussion on the credibility of the whole privatisation exercise.

According to the source who craved for anonymity, the BPE has not got any letter directing it to act on the request of the bidders who have fingered various excuses ranging from BPE's centralised operation and challenges of vehicular traffic into Abuja as reasons for their inability to meet up with the set deadlines.

It was also learnt from the same source that the situation may have been complicated by the space of the meeting of the NCP which is scheduled to meet in September to evaluate and ratify the BPE's actions in the privatisation exercise before announcing the final bid winners.

In keeping with the timeline for the PHCN privatisation, the BPE had received technical and financial proposals from 25 potential investors interested in the six generation companies as well as 54 bidders for the 11 distribution companies.

Also, the Director-General of BPE, Ms. Bolanle Onagoruwa, had also stated after a meeting with Vice-President Namadi Sambo at the Presidential Villa in Abuja, last Monday the deadlines were sacrosanct and would not be reversed.

The firms had appealed to both the Presidency and BPE to consider extending the deadlines which is against the background of the expressed position of the NCP which affirmed it has decided to stick to the deadline.

According to the transaction timeline, evaluation of the technical bids will take place between August 14 and 28, 2012, after which the NCP will approve the results of the technical evaluation by September 11, 2012.

The deadline for the shortlisted bidders for generation companies to submit their letters of credit is September 18, 2012 while October 2, 2012 is the deadline for shortlisted bidders for distribution companies.

Consequently, NCP's approval will the pave way for the opening of financial bids of the shortlisted investors.

The BPE will on September 25, 2012 open the financial bids of prospective investors for the generating companies while October 10, 2012 is the date for the opening of the financial bids for the distribution companies.

The announcement of the preferred bidders for the generating companies is October 9, 2012 while October 23, 2012 is the date for the announcement of the preferred bidders for the distribution companies.

Meanwhile, the Federal Government has directed state governments with the capacity to complement the national power sector requirements to exhibit reasonable diligence before committing funds into any power project in view of challenges of gas supply and power evacuation facing most power projects in the country.

Minister of Power, Prof. Barth Nnaji told the visiting Governor of Ebonyi State, Mr. Martins Elechi, that the Federal Government in its desire to see functional power system in the country would encourage states to ensure certainty in gas supply to thermal power plant and sustainable power evacuation before embarking on any of such projects.

Nnaji requested that the proposed 1000megawatts power plant by Ebonyi State government be located at the nearest point of gas supply, national grid.

He added that operational licenses from Nigerian Electricity Regulatory Commission (NERC) and the Gas Aggregator Company of Nigeria (GACN) must be obtained as specified by law.

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