4 November 2012

Nigeria: Eko Distribution Company - Allegations of Irregularities Trail Choice Bidder

Less than a month after the choice of successful bidders for the successor distribution companies expected to take over the 11 PHCN's electricity distribution companies slated for privatisation, by the Bureau of Public Enterprises, allegations of gross irregularities, breach of stipulated procedures and an outright disregard for the principle of due process have continued to trail the exercise.

Critics of the selection process for instance alleged that the process leading to the emergence of certain bidders for some of the electricity distribution companies was fraught with manipulation obviously to favour some of the companies that participated in the process.

One of the allegations is the one concerning the choice of West Power & Gas Ltd as the successful bidder for Eko DISCO which was said to have enjoyed an undue advantage over other bidders as the Technical Committee of the National Council on Privatisation saddled with the responsibility of superintending the selection process was said to have waived the rules that specifies $100 million in tangible asset for the successful bidders for West Power & Gas.

However, in a swift response last night, Chairman of the Technical Committee Mr. Atedo Peterside described the allegation as false.

In an email response to THISDAY from London, Peterside said, "The story is patently false. The Technical Committee simply overruled a distorted computation of their net worth at the preliminary evaluation stage. It is the work of the Technical Committee to review all the preliminary evaluations and to rectify all such errors in order to ensure that there is no miscarriage of justice."

However, critics of the exercise pointed out that to qualify for further participation in the exercise, bidders were expected to meet the criteria for completeness and substantial responsiveness as regards all required documents and processes as well as satisfy the technical evaluation exercise, which requires that bidders have a net worth of not less than $100 million.

A report by the Committee on Determination of "fit and proper" Person to Operate in the Nigerian Electricity Supply Industry, submitted to the chairman, Nigerian Electricity Regulatory Commission on October 9, a copy of which was made available to THISDAY at the weekend, states that "Any bidders found to have less than $100 million in tangible net worth were disqualified and not evaluated further as per the RfP. Following this evaluation, proposals that met the net worth requirement were passed to full technical evaluation."

However the report showed that on the contrary, West Power & Gas Ltd, which had been disqualified as unfit and improper at the first stage for having insufficient networth, was illegally given the opportunity to shore up its net worth through a foreign bank to enable it make up its deficit of $50 million. Its earlier net worth valued at $50 million fell short of the requisite $100 million.

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