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BPE, Leda Consortium bicker over Kaduna Disco

By on July 14, 2014

The Leda Consortium and the Bureau of Public Enterprises are currently at loggerheads over the status of the Kaduna Electricity Distribution Company, for which North West Power Consortium emerged the preferred bidder.

Leda, which emerged the reserve bidder for the Kaduna Disco, in its letter of May 28, 2014 addressed to the Director-General of the BPE, accused the privitisation agency of breaching the terms of the Request for Proposal by holding on to its bond beyond the stipulated time.

It stated, “The decision of the BPE to hold on to Leda’s bond till date is curious, if indeed Northwest Power, the bid winner, has paid.

“It should be noted that the RFP is the binding document of the transaction, hence, both parties, that is BPE and bidder, must comply with the terms of the RFP.”

It accused the BPE of not being transparent in its dealings with the reserve bidder, especially regarding the status of its bid, noting, “Transparency is one of the cardinal tenets of the RFP. Apart from its request to Leda to extend the validity of its bid bond by six months, October 16, 2013, to April 16, 2014, the BPE has deliberately refused to reply all correspondences of Leda.”

Leda Consortium said it gave the BPE a bank guarantee of $15m and a bid bond of $815,000. The total value of the two instruments, it maintained, was $15,815,000.

“The BPE appears to have confiscated the said $15,815,000 in order to protect the presumed preferred bidder, Northwest Power,” it alleged.

When our correspondent contacted the BPE over the matter, the spokesperson for the agency, Mr. Joe Chigbo Anichebe, in an email response, told our correspondent that the simple reason the BPE was still holding on to Leda’s bid bond till date was in strict compliance to the letters of the RFP.

He said, “The transaction is still ongoing, until Northwest, (the preferred bidder) concludes payment of the balance of the 75 per cent on or before August 6, 2014. And For the records, Northwest paid 25 per cent on February 6, 2014 and is expected to pay the balance of the 75 per cent on or before August 6, 2014.

“If by August 6, 2014 Northwest pays the balance, then the BPE will release the bond to Leda Green Consortium as the RFP stipulates.

“But if on the other hand, by August 6, 2014 Northwest could not pay the balance of 75 per cent, the BPE will call on Leda Green Consortium to assume the position of the preferred bidder and subsequently be asked to pay its proposed bid amount, while the BPE will continue holding their bid bond as clearly stated in section 14.3 of the RFP.

“We can also confirm that the BPE has responded to all relevant correspondences from the Leda Consortium.”

The Kaduna Electricity Distribution Plc was among the 18 PHCN successor companies that were earlier advertised for sale in December 2010, and along with the others, went through a tender process that culminated in the submission of technical and financial proposals in July 2012.

The Federal Government handed over the assets of 14 of those companies to their new owners on November 1, 2013.

According to the Managing Director of Kaduna Disco, Alhaji Mohammed Idris, there are 18 national integrated power projects in Kaduna State, with only seven of the projects fully completed.

 

[Punch]