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No payment deadline extension – BPE tells power investors

By on August 21, 2013

The Bureau of Public Enterprises has said it will not extend the Wednesday deadline for the payment of the outstanding 75 per cent of the bid prices for 15 successor companies of the Power Holding Company of Nigeria by the preferred bidders.

If the preferred bidders selected by the National Council on Privatisation failed to pay on Wednesday, the BPE said they would lose the bids, while the reserved bidders would be invited to take over the assets.

Less than 72 hours to the payment deadline, the preferred bidders for the five generation and 10 distribution companies had been making frantic efforts to have the BPE extend the payment deadline.

A group of bidders had recently visited the Minister of Power, Prof. Chinedu Nebo, in Abuja, and demanded, among other things, an extension of the payment deadline.

This, our correspondents gathered, came on the heels of indications that some of the bidders might not be able to meet the payment deadline.

While the call for an extension of the deadline had persisted among the investors, some of who are said to be having difficulties raising money for the conclusion of the transactions, the Head of Public Communications, BPE,  Mr. Chigbo Anichebe, who spoke with one of our correspondents on the telephone on Monday, dismissed the idea of a deadline extension.

According to him, the BPE does not have the power to extend the payment deadline as it is being clamoured by some of the preferred bidders.

Anichebe explained that only the NCP was vested with the power to extend the payment deadline.

Even if the NCP was to consider any payment deadline extension, the BPE spokesman expressed doubts that such would be possible before Wednesday.

“The BPE does not have the power to extend the deadline. It is the National Council on Privatisation headed by Vice-President Namandi Sambo that has the power to do that. This means that the council will have to meet on Wednesday to extend the deadline; but as I speak, I am not aware that such a meeting has been called,” he said.

All the preferred bidders for the PHCN successor companies had met the March 21, 2013 deadline for the payment of the mandatory 25 per cent of the offer value of their bids and paid a total sum of $559,445,573.96 to the BPE.

The BPE received $31m from 4Power Consortium for the Port Harcourt Distribution Company; $31.5m from Interstate Electrics Limited for the Enugu Distribution Company; and $27,913,633.50 from North-South Power Company for the Shiroro Power Plc.

Earlier, the Vigeo Consortium had paid $32.25m for the Benin Distribution Company; Transcorp/Woodrock Consortium paid $75m for Ughelli Power Plc; and CMEC/EUAFRIC Energy JV paid $50,249,965 for Sapele Power Plc.

Also, the Kann Consortium paid $41m for the Abuja Distribution Company; Aura Energy paid $20,464,968.15 for the Jos Distribution Company; Mainstream Energy Limited paid $59,467,500 for Kainji Power Plc; and Sahelian Power SPV paid $34.25m for the Kano Distribution Company.

Other bidders are Amperion Power Company Limited, which paid $33m for Geregu Power Plc; Integrated Energy Distribution & Marketing Company paid $42.25m and $14.75m for the Ibadan and Yola Distribution Companies, respectively; NEDC/KEPCO paid $32.75m for the Ikeja Distribution Company; and West Power & Gas, which paid $33.75m for the Eko Distribution Company.

However, the BPE and the preferred bidders gave different accounts as regards the 75 per cent outstanding payment meant for the electricity firms on Monday.

While the BPE said none of the firms had paid the balance as of 8 pm on Monday, some of the bidders, who spoke with one of our correspondents, stated that they had made payments into the account of the agency.

Anichebe said, “Well, several of them told us that they have paid, but we haven’t received alerts from our bank.”

But the chief executive officer of one of the successful bidders told our correspondent that many of the firms had made payments.

The CEO, who pleaded not to be named said, “We have started making payments despite all the odds, and we hope transition will be seamless.”

Meanwhile, the NCP has said that 20,304 out of the 40,000 employees of the Power Holding Company of Nigeria have so far been cleared and paid their severance benefits.

In a statement issued on Monday by Anichebe, the council said N119. 2bn was used to pay the workers up till Friday.

Anichebe said the privatisation process of the power sector was on course with the payment of the severance benefits to the workers.

He said, “In line with the agreement reached with the Power Holding Company of Nigeria and the labour unions dated December 12, 2012, the Federal Government commenced the payment of benefits due to the staff on August 1.”