Transcorp, 14 Firms Sign Agreement to Take over Discos, Gencos

22 Feb 2013

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Vice-President Namadi Sambo

By Muhammad Bello and Patrick Ugeh and Linda Eroke

The bidders that were selected to acquire the 10 Distribution Companies (DISCOS) and five Generation Companies (GENCOS) created from the unbundling of Power Holding Company of Nigeria (PHCN) Thursday formally signed the share purchase agreements with the National Council on Privatisation (NCP).

At a ceremony held at the Banquet Hall of the State House, Abuja, the companies appended their signatures to the Sale and Purchase Agreements which granted them the status of the preferred bidders upon down payment of 25 per cent of the share purchase price within 15 business working days after signing, as well as payment of the outstanding 75 per cent within 90 working days after the signing.

The whole process which started eight years ago, with the vision of reforming the power sector was legally backed with the enactment of the Electricity Power Sector Reform Act that provided for the unbundling of the PHCN successor companies.

In 2011 when the privatisation of the Bureau of Public Enterprises (BPE) began.  BPE received 301 Expression of Interests (EOIs) and later short listed 207 firms that met the minimum qualification standards set. Out of this number only 163 firms purchased bid documents.

Speaking, Vice-President Namadi Sambo, who chairs the NCP, described the event as “important landmark”, saying it marked several important milestones in the on-going reform of the Nigeria Electricity Supply Industry.

He expressed delight that the “GENCOS would today be signing Ancillary Agreement with the Transmission Company of Nigeria Plc” to pave way for compensation to providers of services in line with the best practice in the power sector.

Sambo, who was represented by the Minister of Power, Prof. Chinedu Nebo, thanked the World Bank for "its support towards making these agreements bankable through the provision of Partial Risk Guarantee credit support instrument.”

The Acting Director General of the Bureau of Public Enterprises, BPE, Mr. Benjamin Ezra Dikki, said the ceremony “underscores President Jonathan’s commitment to move Nigeria from darkness to light, to leave Nigeria a better place than he met it. Today's signing ceremony is a clear indication that where there is a will, there is always a way.”

The preferred bidders for the Discos as approved by the NCPC are: Kann Consortium for Abuja Successor Company at $164 million, Vigeo Power Consortium for Benin at $129 million, West Power &Gas for Eko at $135 million, Interstate Electrics Ltd for Enugu at &126 million, Integrated Energy for Ibadan at $169 million, NEDC/KEPCO for Ikeja at $131 million, Aura Energy Ltd for Jos at $82 million, Sahelian Power SPV Ltd for Kano at $137 million, 4Power Consortium for Port Harcourt at $124 million and Integrated Energy Distribution & marketing for Yola at $59 million Gencos are: Amperion for Geregu Plant at $132 million, Mainstream foe Kainji Plant at $50.76 million plus commencement fee of $237,870,000, North-South for Shiroro Plant at $23.60 million plus commencement fee of $111 million, Transcorp/Woodrolck for Ughelli Plant at $300 million and CMEC/Eurafric for Sapele Plant at $201 million.

And in furtherance of its drive to build a nuclear plant for the generation of electric power by 2020, the Nigeria Atomic Energy Commission (NAEC) has signed a contract with the International Atomic Energy Agency (IAEA) for technology transfer.

Chairman and  Chief Executive of NAEC, Dr Franklin Osaisai, signed the Country Programme Framework (CPF) for Nigeria while Kwaku Aning, IAEA Deputy Director General and Head of the Department of Technical Cooperation, endorsed it for the global body.

A statement made available to THISDAY Thursday explained that a country technical cooperation between a member state and the IAEA identifies priority areas where the transfer of nuclear technology and technical cooperation resources would be directed to support national development goals.

“This Country Programme Framework (CPF) serves as the frame of reference in the area of Technical Cooperation (TC) between the Federal Republic of Nigeria and the International Atomic Energy Agency (IAEA),” the NAEC statement said.

It noted that the document was thus the reference for use by IAEA in preparing programme requests by Nigeria, and in appraising those requests and allocating resources.

But the hitches in the privatisation process may not quit be over as Labour has alleged  that there is a shortfall in the computation of PHCN workers’ entitlements, shortly after the Federal Government announced the approval of N384 billion to offset the entitlements of employees of Power Holding Company of Nigeria (PHCN).

The two unions in the sector had engaged government in a protracted negotiation over the ongoing reforms in the power sector and had resisted the handover of the subsidiary companies to private investors only after all labour issues have been resolved.

General Secretary, National Union of Electricity Employees (NUEE), Comrade Joe Ajaero, in a statement said Alexander Forbes and the BPE had discovered and accepted fundamental errors in the data used for their computation in the course of the Committee’s discussion and had agreed to reconvene at a later date to address the errors.

He said: “It is amazing that figures can be conjured to calculate the exit benefits without reference to the technical Committee. The N384 billion is laughable because government is aware that one third of the staff population is excluded, and majority of those captured had their entitlements calculated based on two grades lower than their actual grades.”

Speaking also, President of Senior Staff Association of Electricity and Allied Companies (SSAEAC), Mr. Bede Opara, in a telephone chat with THISDAY, said President Goodluck Jonathan was not properly briefed on the agreement reached at the technical Committee meeting held last month.

Specifically he said the N384 billion announced has a shortfall of about N97 billion.

Tags: News, Nigeria, Featured, Transcorp, DISCOS, GENCOS

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