Otedola, Elumelu, Babangida, others buy four power plants

femi-otedola

The Nigerian Council on Privatisation has announced the bid winners for four power plants to be sold to private companies.

Controversial oil billionaire, Femi Otedola, who is chief executive at Forte Oil Plc, was declared bid winner on Tuesday of the 414 MW-capacity Geregu thermal Power Plant in Kogi state by the National Council on Privatisation, NCP.

Mr. Otedola won his bid with the consortium called Amperion Power Distribution.

Former Managing Director of United Bank for Africa, UBA, Tony Elumelu, who led a consortium of Transnational Corporation of Nigeria PLC, Transcorp/Wood, Rock/Symbion/Medea and PSL/Thomasen was on the winner’s train that bought the 972 mega-watts capacity Ughelli plant in Delta state.

Mainstream Energy Solutions Limited, believed to be financed by former military President, Ibrahim Babangida, had a sunny day too when it was granted the concession right to Kainji Power plant in Niger State.

The many tangled twists of the preferred bidders

The Transcorp consortium deals in electricity infrastructure, construction engineering, systems control among other concerns. It posted a bid of $300million, as against the $252million offer by Amperion, and only $54million by the U.S.-Nigerian-Israeli-Canadian and Irish consortium, Feniks Electricity Consortium.

Transcorp PLC is a familiar name among buyers of public enterprises under the Nigerian chequered privatization programme. The organization has participated in many botched sales. In 2009, it won 5I per cent stake in the Nigeria’s telecommunications national carrier, Nigeria Telecommunications, NITEL. The deal was, however, later cancelled by the Federal Government.

The firm was also entangled in an oil block award deal. When an Indian consortium, in partnership with Starcrest Petroleum, could not meet a payment deadline; Transcorp swapped deals with the India Company, yet failed to meet the terms of the award, including the identification of a suitable deep-water operator and payment of Signature Bonus. The award was consequently revoked.

Mr. Otedola was also recently enmeshed in a $620,000 bribe scandal involving the former Chairman of the House of Representatives Adhoc Committee on the Management of Fuel Subsidy, Farouk Lawan. His company, Zenon Oil, was indicted in the fuel subsidy scam report.

Mr. Otedola, also a notable financier of the ruling Peoples Democratic Party, was one of the financiers of President Goodluck Jonathan’s presidential campaign last year.

While Mr. Otedola is an established investor in the downstream sector of the country’s petroleum industry and a major marketer of refined petroleum products, with over 500 products retail outlets across the country, little is known about his technical competence to manage a successful electricity generating company.

However, at the formal financial bids opening ceremony organised by the Bureau of Public Enterprises, BPE in Abuja, Mr. Otedola’s consortium, Amperion Power Distribution Limited, which also submitted bids for Ughelli thermal Power plant, had made an initial offer of $128.520million for the plant.

The consortium, comprising BSG Power Limited of Guernsey, a power and renewable energy projects investor company; and Shanghai Municipal Electric Power Company Limited/SGCC, an electric power generation, transmission, distribution, sales, power grid planning and construction firm, was later compelled to review the offer to the minimum value of $132million in line with the bid guidelines.

Amperion, which was the sole bidder for the 414 MW-capacity Geregu Power plant, was eventually declared winner.

Chinese-Nigeria-U.K. power consortium, consisting China Machinery engineering Corporation, CMEC of China, Eurafric Energy of Nigeria, British Power International and First Bank Plc, was declared winner of the 1,020 MW-capacity Sapele Power plant with an offer of $201million, over the $80million offer by the consortium of JBN-Nestoil Power Services Limited, which was compelled to revise its bid to the reserve value of $106.5million to emerge the reserve bidder.

Similarly, North-South Power Company Limited, which has Niger State government as a stakeholder, emerged the preferred bidder for Shiroro power plant with an offer of $111.7million as fixed annual fees and $23.6million as commencement fees.

Mainstream Energy Solutions Ltd, a consortium, which includes Nigerian businessman, Sani Bello, and NIGELEC, a company registered in Niger Republic, was declared the preferred bidder for Kainji, with an offer of $50.8 million and $23.8million as commencement fees.

The Chairman, Technical Committee, National Council on Privatisation, NCP, Atedo Peterside, said the bids for the 776 MW-capacity Afam Power Plant were not opened as all the three bidders -Primeniza Energy Limited, Skipper Nigeria Limited and NPG Consortium – failed to meet the requirement of 75 per cent pass mark set as part of the bid guidelines.

At the deadline for the submission of bids July 17,2012, the Bureau of Public Enterprises, BPE, said it received 25 proposals from various pre-qualified bidders, including 22 for thermal power plants and three for hydro power plants.

After the bids were opened, two that had no commercial proposals were rejected in line with the rules contained in the Request for Proposal (RFP) issued to bidders.

In the remaining 23 bids, 10 failed the test of completeness and responsiveness, while eight of the remaining 13 met the minimum requirement of 75 per cent score to progress to the financial bid opening stage.

In line with the bids guidelines, all winning bids are subject to confirmation by the NCP and approval by the President.

But, each winner is expected to immediately commence final negotiations with the BPE.

The winning companies have 15 working days after the signing of the share purchase agreement, SPA, and concession agreement to pay 25 per cent of the offer price, while the balance must be paid within six months or at a date agreed to with the BPE.

  • Collins

    GEJ has failed Nigerians by allowing such corrupt individuals to win the electricity privatisation bids may God help us.

    • NAGODI

      FIRST HE IS PART OF THEM! IT IS CASE OF THE WOLF IN CHARGE OF HEN HOUSE. IF YOU TO HAVE BLAME ANYTHING OR ANY ONE, BLAME YOURSELF AND YOUR VOTES. GEJ IS NOT HERE TO SAVE NIGERIA, HE IS PRESIDENT TODAY MAKING AS MUCH MONEY AS HE WANTS FOR HIMSELF, HIS FAMILY AND CRONIES. GET OVER IT AND WAIT FOR 2015.

  • Abu

    Would it be better for them to ship their ill gotten wealth out of the Nation or to Invest it in Nigeria as they have just done?

    • NAGODI

      WHO KNOWS? HOWEVER JUST AS THEY CREATE ARTIFICIAL SCARCITY OF FUEL, GET READY, THE LEOPARD DOES NOT LOSE ITS SPOTS. THERE WILL BE ARTIFICIAL SCARCITY OF POWER AS WELL. THEY HAVE MADE SO MUCH MONEY OUT OF THE SUFFERING AND BLOOD OF NIGERIANS, WHAT MADE YOU THINK THEY WILL NOW INVEST TO SAVE NIGERIANS?

  • http://www.facebook.com/chukwuemerie.uduchukwu Chukwuemerie Uduchukwu

    Looking at the list of those who emerged
    winners for the power bid, you will conclude that this country is
    doomed. Now I really understand why Prof. Bath Nnaji resigned as the
    Power Minister. Goodluck Jonathan is really a disappointment. I regret
    voting for him. So sad!

  • Patriot

    What are Nigerians expecting from this GEJ administration? he is part of the wolves inc. These thieves ran down the economy, turned their cult to economic management team & are now buying over the power plants. Has any of them paid back the money they owed the banks? This is Nigeria for you. the land of rogues. God would surely grant us a good leader one day , by then we must remember to drag these bastards to the gallows. Those thanking them for spending their loot in nigeria & not swiss banks are speaking out of frustration. If we stand on that, we are justifying stealing, & corruption a new name. The truth is surely in the hands of Prof Barth. He may tell us some years to come. God will save Nigeria but we all have to rise up first & save ourselves from these beasts.

  • Ekene

    I think you should see the good in the situation. The highest bidder wins, this is the right thing to do. Private Companies excel better in Nigeria, but Government companies will be “business as usual”, lack of commitment and managerial discipline, etc.

  • Dacub

    9ja is a circus show.