•As Elumelu assures on Transcorp turning around Ughelli Plant
The National Council on Privatization (NCP) formally signed Sale and Purchase Agreement with the preferred bidders for the 10 Distribution Companies (DISCOS) and five Generation Companies (GENCOS) in line with the process of privatizing the Power Holding Company of Nigeria (PHCN).
This is as the Chairman of Transcorp/Woodwork, Tony Elumelu, the preferred bidder for the Ughelli Plant at the cost of $300 million, has assured that the plant will be turned around for maximum operations.
The Vice President Namadi Sambo, who chairs the National Council on Privatization, described the event as “important landmark,” saying it marked several important milestones in the ongoing reform of the Nigeria Electricity Supply Industry.
He expressed delight that the “GENCOS would 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.”
He assured that the Federal Government would take all necessary steps to ensure that the “expectations of the Nigerian people in terms of improved service delivery are achieved.” Elumelu told State House correspondents that the signing was a very significant milestone for the country in its quest to generate enough electricity for the populace.
The ceremony, held at the Banquet Hall of the State House, Abuja, yesterday will lead to handing over of the DISCOS and GENCOS to the preferred bidders upon down payment of 25 percent of the share purchase price within 15 business days after signing, as well as payment of the outstanding 75 per cent 90 working days after the signing.
He said the signing of the agreement was in particular significant for Transcorp. While stressing the importance of regular power supply to the nation’s economy, Elumelu said his company would employ its magic wand in turning around the Ugheli Power Plant to the benefit of the people.
On the effect of the cost on Nigerians, the Chairman of Transcorp, insisted that what was important for now is to make electricity available to the people while the issue of cutting tariff will follow. “I think cost is one thing but more importantly is availability. Today, the total cost of power to us in Nigeria is very high. You have generator, you have diesel, you have air pollution, cancer is on the rise in Nigeria now because the air is polluted.
“If you factor these costs both economic and social cost and the fact that businesses are not doing well in Nigeria, the thing for us is first, let there be light. Once there is light, let’s now begin to talk of the cost but let everyone who want light have access to electricity,” he posited.
The Acting Director General of the Bureau of Public Enterprises, BPE, Mr Benjamin Ezra Dikki, said the ceremony “underscores President Jobathan’s commitment to move Nigeria from darkness to light, to leave Nigeria a better place than he met it, whatever it cost him. 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 Piwer SPV Ltd for Kano at $137 million. For Power Consortium for Port Harcourt its $124 million. Integrated Energy Distribution & marketing for Yoka at $59 million. For GENCOS: Amperion for Geregu Plant at $132 million.
Mainstream for Kainji Plant at $50.76 million plus commencement fee of $237,870,000. North-South for Shiroro Plant at and $23.60 million plus commencement fee of $111 million.
Transcorp/Woodrock for Ugheli Plant at $300 million. CMEC/Eurafric for Sapele Pant at $201 million. In 2005, the federal government commenced the process of reforming the power sector with the enactment of the Electricity Power Sector Reform Act that eventually paved way for the privatization of the PHCN successor companies.
At the beginning of the privatization of the DISCOS and GENCOS in 2011, the Bureau of Public Enterprises (BPE) received 301 Expression of Interests (EOIs) and later short listed 207 firms that met the minimum qualification standards set. Interestingly, only 163 firms purchased bid documents.