-Power firms: FG pockets N88.3bn as bidders meet deadline
A major system failure on the national power grid is responsible for the blackout that has engulfed most parts of Nigeria in the past two days.
The system collapse, noticed on Wednesday, had compounded an already parlous power supply situation, which the government seeks to address through the implementation of the power sector reforms.
Sources at the Transmission Company of Nigeria, TCN, which is responsible for evacuating generated electric power from generating companies and wheeling it to distribution companies, attributed the blackout to “grid system disturbance.”
“It (blackout) was a function of grid system disturbance, which the engineers have stepped in to address. Very soon, improved electricity will be experienced in different parts of the nation,” the sources added.
The TCN was handed over to Canadian firm, Manitoba Hydro last year under a management contract for a fee of $23m for an initial period of three years.
The spokesman of the Ministry of Power, Mr. Ibrahim Haruna, however said yesterday that he did not have facts on the matter as the Minister of Power, Prof. Chinedu Nebo, was on official assignment overseas.
Investigations, however, showed that power generation, which dropped significantly, was gradually being improved upon even though consumers were yet to feel the impact.
A reliable source in the Power Holding Company of Nigeria, PHCN, who confirmed the slow recovery said: “It is not possible for us to know the level of generation, transmission and distribution for now.
That can be later when the figures would have been put together.” It was learnt that many parts of the nation were still in darkness, which has forced industrial, commercial and individual consumers to rely on private generators.
The spokesman of Union Bank Plc, Mr. Frances Barde, said in a telephone interview that the financial institution was relying on the use of generators to power its operations in recent times.
A source in the Manufacturers Association of Nigeria, MAN, who preferred not to be named, stated that the cost of private electricity generation was fast becoming unbearable for manufacturers.
He said: “It is not easy to operate in the sector because of many challenges, especially high cost of running our generators. The high cost of operations when added to prices, makes our products uncompetitive in the market.”
The power minister recently declared that the rate of system failure in the power sector was becoming too frequent and embarrassing to the government and would no longer be tolerated.
Meanwhile, the Federal Government yesterday recorded a major step forward in its power sector privatisation programme as all the preferred bidders for the 15 PHCN successor companies met yesterday’s deadline for the payment of the 25 per cent of the offer value of their bids.
Total accruals from the sale of government equity in the companies, which represent 25 per cent of the sale yields from 14 bidders, stood at about $559.4m (N88.3bn.)
A statement by the BPE indicated that by yesterday it received $31m from 4Power Consortium being 25 per cent of the bid value for Port-Harcourt Distribution Company; $31.5m from Interstate Electrics Limited being the mandatory 25 per cent of the bid value for Enugu Distribution Company and $27.9m from North-South Power Company being 25 per cent of the bid value for Shiroro Power Plc.
Bidders that had earlier paid the mandatory 25 per cent of the bid value of the PHCN successor company they intend to buy are: Amperion Power Company Limited, the preferred bidder for Geregu Power Plc which paid $33m; Integrated Energy Distribution & Marketing Company, which paid $42.25m and $14.75m for Ibadan and Yola Discos respectively; NEDC/ KEPCO, the preferred bidder for Ikeja Distribution Company, which paid $ 32.7m and West Power & Gas, the preferred bidder for Eko Distribution Company, which paid $33.7m
Others are Vigeo Consortium, the preferred bidder for Benin Distribution Company, that paid $32.25m; Transcorp/Woodrock Consortium which paid $75m for Ughelli Power Plc; CMEC/EUAFRIC Energy JV which paid $50.2m being 25 per cent of the bid value for Sapele Power Plc while Kann Consortium paid $41m being 25 per cent of the bid value for Abuja Distribution Company.
The BPE had also confirmed that Aura Energy paid $20m or 25 per cent of the bid value for Jos Distribution Company; Mainstream Energy Ltd paid $59.4m being 25 per cent of the bid value for Kainji Power Plc and Sahelian Power SPV had paid $34.2m being 25 per cent of the bid value for Kano Distribution Company.
With the payments, the bidders’ bid security in form of a letter of credit or bank guarantee for 15 per cent of the transaction value deposited with the BPE under the terms of the payment mechanism set out by the National Council for Privatisation will now be returned to them ahead of the signing of Sale and Purchase Agreements between the parties.
The bidders will now be required to pay the outstanding 75 per cent of the share purchase price to complete the transaction within six months after signing of the Sale and Purchase Agreement or the Shareholders’ Agreement, whichever is earlier or mutually agreed upon time. After the completion of payment, the handover of the successor company to the preferred bidders will conclude the transactions.
In another development, President Goodluck Jonathan yesterday presented share certificates to state governors for the investment of states and local governments in the National Independent Power Project, NIPP.
Jonathan made the presentation shortly before the commencement of NEC meeting after which he left for Equatorial Guinea on trade mission. The NEC meeting is always presided over by Vice President Namadi Sambo.
While presenting the certificates, valued at $8.8bn (N1.36trn), Jonathan explained that just like the certificates of investments of the states and local governments in the NIPP project, the certificates for the Sovereign Wealth Fund, SWF, would soon be ready.
He said: “This is just to inform Nigerians of what we are doing because a number of them don’t even know that there are investments of the states in the NIPP. You all remember that during President Obasanjo’s time, some monies were set aside from the excess crude and the Federal Government was directly funding the NIPP projects with that money” “Then, the chairman of the Revenue Mobilisation and Fiscal Commission, Engr.
Tukur now took the Federal Government to court, not even the state governors, saying the Federal Government has no power to spend money belonging to the three tiers of government
“Until when we came on board, the NIPP was stalled, we then decided to negotiate with the governors to do it in such a way that it will be a proper investment where all states and local governments will have investment based on their own amount in the excess crude account.
“So those things were worked on under the Vice President and each zone was represented by one governor and the Federal Government also has a representative.”
Jonathan noted that the money belonged to all the three tiers of government, saying that any money that comes in belonged to all according to the ratio of their investment.
He explained that the state governments would hold those of the local governments in trust for them while the Ministry of Finance would hold that of the Federal Government in trus
t.
Jonathan noted that since the NEC is the highest decision making body as far as the nation’s economy is concerned; the country would progress and develop if the council continue to take some decisive decisions.
Courtesy: National Mirror