Abdulsalami, Namadi’s ally set for power firms

[DT]

Companies backed by General Abdulsalami Abubakar, businessman Emeka Offor, and an ally of Vice President Namadi Sambo were among those that emerged as preferred bidders for the 10 power distribution firms yesterday, in a deal that would net the Federal Government N197.25 billion.  The National Council on Privatisation which announced the winners said the preferred bidders would still undergo further scrutiny before core investors are selected among them to take over the distribution companies (Discos).

Integrated Energy, which is chaired by former head of state Abdulsalami Abubakar and is partnered by the Philippines' largest power retailer Manila Electric, bid the highest efficiency target for four Discos—Yola, Ibadan, Eko and Ikeja.

Chrome Energy, chaired by Mr. Emeka Offor, is part of the highest bid for assets in Enugu and Abuja.

Sahelian Energy SPV Limited, which has Vice President Namadi Sambo's ally Yusuf Hamisu Abubakar among its backers, emerged the lead company in the only consortium bidding for the Kano firm.

Sixteen companies participated in the bidding, which is part of government's plan of unbundling up the Power Holding Company of Nigeria (PHCN) and selling it off as 11 distribution and six generation companies with the overall aim of ending chronic power shortages in the country.

A number of the companies involved in the bids are backed by powerful interests but have technically capable partners, while others have little or no power sector experience.

"The NCP is fairly confident that this process will produce the most appropriate core investors and fulfill the government's objectives of rapid transformation," NCP technical committee chairman Atedo Peterside said at the bid announcement in Abuja yesterday.

Sahelian Energy comprises Incar Power Limited (IPL) promoted by Alhaji Umaru Mutallab, Dantata Investment and Securities Limited (DISC) promoted by Alhaji Aminu Dantata, Sahelian Energy and Integrated Services Limited (SEIS) promoted by Yusuf Hamisu Abubakar, Highland Electricity Limited (HEL) promoted by Alhaji Kashim Bukar Shettima and Kayseri Ve Civari Elektrik T.A.S, a Turkish Electricity Generation and Distribution company.

Aura Energy, which according to its website was created to buy a coal mine, was the sole bidder for the Jos Disco and could win by default, while 4Power Consortium, which is made up of several Nigerian companies and an Indian firm, was the only bidder for Port Harcourt.

There were no qualified bids for the Kaduna firm.

Discos are responsible for delivering electricity to end-users and collecting payment.

Oando Consortium and Honeywell Consortium ranked low behind Integrated Energy Distribution & Marketing Limited in their Aggregate Technical, Commercial and Collection (ATC&C) loss reduction proposal for the Eko Disco for the next five years.

ATC&C loss reduction proposal is the ability of an investor to bring down the level of loss in order to be able to run the business well and subsequently bring down the tariff in the next five years, according to the Director General of Bureau of Public Enterprises (BPE) Ms Bolanle Onagoruwa.

The bidder who offered the highest loss reduction is expected to offer the lowest tariff in its own zone, she added.

Oando and Honeywell were also ranked behind Integrated for the Ikeja Disco as they only proposed 14.29% and 16.25% respectively as against Integrated's 22.51%.

But Integrated may not take both Eko and Ikeja Discos as they fall within the same zone and the rule says if an investor wins two Discos within the same zone it has to take one, Peterside said.

For the Ibadan Disco, Integrated also proposed the highest ATC &C loss reduction of 17.46% to beat KEPCO/NERC Consortium and Western Consortium who proposed 17.1% and 14.37% respectively.

Interstate Electrics led in their proposal with 20.83% for the Enugu Disco as it beat Eastern Electric Nigeria who proposed 15.99%.

Benin Disco has Vigeo Power Consortium as its leading would-be buyer as it proposed 21.78 % to beat Southern Electricity Distribution Company which proposed 17.72%.

For the Abuja Disco, Interstate emerged the leading buyer as it proposed 21.62% ATC& C loss reduction to beat KANN Consortium which hoped to reduce loss by 18.43%.

The Jos, Kano, Port Harcourt and Yola Discos have Aura Energy (16.22%), Sahelian Power SPV Limited (21.21%), 4Power Consortium (19.55%) and Integrated (18.58%) respectively as their sole bidders.

Peterside, who was also the chairman of yesterday's commercial bidding, said N197.25 billion is expected to be raked into the government's coffers from the sale of 60 per cent of each of the 10 distribution companies.

"Accordingly, the bidder offering the highest ATC &C loss reduction is in a leading position subject to the ground rules which will be announced at this event.

"The regulator will not adjust tariffs upwards to accommodate the inability of a Disco operator to deliver on the ATC &C levels that they commit to; rather tariffs will be adjusted downward annually to reflect the agreed ATC &C loss levels irrespective of the operator's ability to meet its contractual obligation," he added.

Daily Trust