Prospective investors for the Afam Generation Company (Genco) and Kaduna Electricity Distribution Company Limited (Disco) finally had their commercial/financial bid proposals opened Wednesday with Taleveras Group emerging the preferred bidder for Afam, offering to pay $260.05 million (N41.6 billion) for the power asset.

However, TES Power's $222.9 million (N35.6 billion) offer for the same asset could only qualify it for a second place as the reserve bidder.

Similarly, Northwest Power Limited emerged winner for Kaduna Disco with an Aggregate Technical, Commercial and Collection loss reduction (ATC&C) proposal of 29.26 per cent, while LEDA Consortium offered an ATC&C of 26.71 per cent to take second place as the reserve bidder.

NAHCO Consortium offered an ATC&C of 22.83 per cent, while Incar Consortium offered 22.73 per cent.

This effectively concluded the bid process for the 17 Power Holding Company of Nigeria (PHCN) successor companies that were advertised for sale in December 2010 by the National Council on Privatisation (NCP) and Bureau of Public Enterprises (BPE).

Speaking at the occasion in Abuja, Chairman, Technical Committee of the NCP, Mr. Atedo Peterside, who presided over the bid opening exercise, explained that bidders for the Disco were judged by their ATC&C proposals because of the urgent need to reduce losses and create a self-sustaining electricity market.

He said: "ATC&C loss levels will provide Nigerian electricity consumers and other stakeholders with specific parameters with which to measure the outcome of the power sector reform and privatisation.

"Indeed, successful bidders are contractually bound to deliver on the ATC&C loss levels that they submitted.

"The regulator will not adjust tariffs upwards to accommodate the inability of a Disco operator to deliver on the agreed ATC&C levels; rather tariffs will be adjusted downwards annually to reflect the agreed ATC&C loss levels irrespective of the operator's ability to meet his contractual obligation."

Peterside added that the revenue that drives the entire value chain comes from consumers through the distribution companies.

"In this regard, any reform that does not address the challenges in the distribution network would collapse as there would not be adequate revenue to fund the rest of the value chain," he explained.

NCP had suspended bids for Afam after it was revealed that the former Power Minister, Prof. Bart Nnaji, had links with one of the consortia which had submitted bids for the plant.

On the other hand, the privatisation of Kaduna Disco was adjudged inconclusive, as none of the prior bidders met the technical qualification criteria.

Director General of BPE, Mr. Benjamin Dikki, said the financial bid opening symbolises the progress and success of the power sector reforms.

According to him, "None of the bids received for Afam power plant and Kaduna Disco met the minimum score of 750 required to pass the technical evaluation during the first round of sales of PHCN successor companies."

However, he said a lot of experience had been garnered while conducting earlier transactions for the other five Gencos and 10 Discos.

He also disclosed that former staff members of PHCN might receive their severance package by the end of the week.

He said: "Everything has been compiled, we have sent the payroll to the Accountant General of the Federation (AGF) and we are optimistic that before the end of this week, or latest next week, they would begin to receive alerts from their banks."