The Technical Committee of the National Council on Privatisation, NCP, and its implementation arm, Bureau of Public Enterprises, BPE, are almost at daggers-drawn regarding procedures for the conclusion of processes for the just-concluded sale of 15 power assets.
Vanguard gathered that the two arms are quarrelling over the modalities for publicly conveying the end of transactions, upon expiration of the deadline for preferred bidders to pay the balance of 75 percent of their bid values on August 21.
A Presidency source told Vanguard in confidence that while the Atedo Peterside-led Committee wants to get on with laid-down procedures, by meeting and taking a decision on the transactions and possibly decide on the fate of bidders that could not meet the deadline, leadership of BPE is foot-dragging, thereby raising suspicions among members.
Defaulters get deadline extension
This development comes as Vanguard gathered that bid defaulters have till September 18, going by the rules of the engagement, or 20 working days after the expiration of the initial deadline to pay up.
At the close of work on August 21, 12 of the 14 bidders met the full obligations of the 75 percent of their bid value for the 15 companies unbundled from Power Holding Company of Nigeria, PHCN.
While the CMEC/EUAFRIC Energy JV, preferred bidders for Sapele Power Plant, made partial payment, Interstate Electrics Limited, for the Enugu Distribution Company, DISCo, could not pay due to foreign bank transfer issues.
While the Sapele plant had no reserved bidder, Enugu DISCo had been calling to be invited to take up Interstate's bid.
However, NCP has not issued any such invitation, neither had BPE declared end of transaction process.
Terms of engagement
Although a newspaper report on Tuesday (not Vanguard) had claimed that BPE had given a 20-day extension to Interstate, which reportedly had deposited about $12 million, the truth is that BPE had no such powers.
The 20 working days extension is embedded in the rules of the transactions approved by NCP for the sale of the 15 companies signed by all the bidders.
Section 2.5.0, entitled Default Prior to Completion of Bid, in the Request for Proposals, cited by Vanguard, read in part: "The vendors shall not be obliged to complete this Agreement unless the Purchaser complies with Clause 2.3.
"The Purchaser shall not be obliged to complete this Agreement with Clause 2.2 if the completion does not take place on the date referred to in, or as otherwise agreed by the Parties in accordance with Clause 2.1, as a result of a failure by a party to fully comply with its obligations in this Clause 2.
"The Purchaser (in the case of non-compliance by the Vendor) or the Vendors (in the case of non-compliance by the Purchaser) shall be entitled by the written notice to Vendors, or as the case may be, the Purchaser served on such date."
Section 2.5.1: "To effect completion so far as practicable, having regard to the defaults which have occurred (without prejudice to the obligations of non-compliant Party."
2.5.2: "To fix a new date for completion (no more than twenty (20) Business Days after the agreed date for completion) in which case the foregoing provisions of this Clause 2 shall apply to Completion as so deferred, but provided such deferral may occur only once."
Accordingly, NCP will be compelled to invite the reserved bidders upon the expiration of the extended deadline to take up Enugu DISCo if Interstate failed again.
But it is not immediately clear what will become of the Sapele Power Plant, which has no reserved bidder, if CMEC Group also fails to meet the deadline.
Based on the reluctance of BPE to agree to a meeting of the Technical Committee, of which it is also a member, its Chairman, Mr. Atedo Peterside, had written to the 22 members complaining of BPE's Director-General's attitude.
A copy of the letter to members, obtained by Vanguard from a source, explained why the committee had not been able to meet "to consider and deliberate upon updates on PHCN's privatisation."
The letter is entitled Re: Update on PHCN Privatisation - Inability to Convene a Meeting of the Technical Committee of the National Council on Privatisation - 'Confidential'.
It read in part: "The reason we are unable to meet is because the DG of BPE, who controls the BPE's budget and therefore releases funds to pay for hotel bills and sitting allowances, has 'surreptitiously' vetoed all my efforts to convene a meeting of our Technical Committee of recent.
'I got a text message'
"His latest ploy was to copy me a text he purportedly sent to the Vice President, requesting approval for our Committee to be allowed to meet and refusing to give me any feedback even after I gave him (the DG) 24 hours within which to revert to me.
"He did not reply my e-mail and did not even bother to explain why he did not reply. As you are all aware, the Technical Committee serves as an advisory/due process 'watchdog' over BPE and we are accountable to NCP.
"Accordingly, I find the DG's surreptitious attempt to keep us 'in the dark' objectionable in the extreme. I do not believe for one second that the DG is acting on instructions from above.
"His 'body language' and enthusiastic evasiveness suggest that he is the initiator, who has proactively been looking for ways to avoid having to transparently table issues/updates before the Technical Committee."
In view of the impasse, Vanguard's source also disclosed that Vice President Namadi Sambo, who is the Chairman of NCP, may have to intervene to retain the credibility of the transaction process.