Government to earn N329billion from sale of PHCN successor companies

President Goodluck Jonathan
President Goodluck Jonathan

The sale of the  Power Holding Company of Nigeria, PHCN, successor distribution companies is to fetch the Federal Government more than N197.25billion in revenue.

The formal bids opening for 10 of the 11 PHCN successor companies slated for privatization were successfully held Tuesday in Abuja by the Bureau of Public Enterprises, BPE.

The bid for the Kaduna Distribution Company did not hold following the declaration by the National Council on Privatization, NCP, that the two bid proposals from prospective bidders failed to meet the technical qualification criteria issued to all bidders.

NCP Chairman, Technical Committee, Atedo Peterside said the BPE has already been directed to invite fresh bids from all the 72 pre-qualified bidders that were issued the Request for Proposal, RFP, application.

According to Mr. Peterside, based on the pre-set valuation audit conducted by the Nigerian Electricity Regulatory Commission, NERC, the sale of the ten DISCOs would rake in a minimum of N328.8billion to the the Federal Government   coffers, excluding the cost for Kaduna DISCO.

About N197billion is to be realised immediately, as the preferred bidders that emerged following the successful formal bids opening exercise on Tuesday are expected to deposit the purchase value for the 60 per cent equity interest they are acquiring.

Details of the NERC valuation show that the Abuja Electricity Distribution PLC was valued at N43billion, or $164million; Benin Electricity Distribution PLC, N33.7billion, or $129million; Eko Electricity Distribution PLC, N35.3billion, or $135million; Enugu Electricity Distribution PLC, N33billion, or $126millionN and Ibadan Electricity Distribution PLC, N44.2billion, or $169million.

Similarly, Ikeja Electricity Distribution PLC was valued at N34.4billion, or $131million: Jos Electricity Distribution PLC, N21.4billion, or $82million; Kano Electricity Distribution PLC, N35.7billion, or $137million; Port Harcourt Electricity Distribution PLC, N32.5billion, or $124million, and Yola Electricity Distribution PLC, N15.5billion, or $59million.

At the bids opening last Tuesday, Interstate Electrics Limited emerged preferred bidder for Abuja and Enugu DISCOs after it posted bids that ranked at 21.62 and 20.83 per cent respectively of aggregate technical, commercial and collection, ATC&C loss reduction, while VIGEO Power Consortium emerged the preferred bidder for Benin Electricity Distribution PLC with 21.78 per cent ranking, and Integrated Energy Distribution & Marketing Limited for Eko DISCO with ranking of 21.43 per cent.

Integrated Energy Distribution & Marketing Limited also received superior rankings for three other DISCOs, including Yola (18.58 per cent), Ibadan (17.46 per cent) and Ikeja (22.51 per cent), while

Aura Energy Limited posted a superior ranking of 16.22 per cent for Jos DISCO and Sahelian Power SPV Limited (21.21 per cent) for Kano DISCO.

4Power Consortium’s ranking of 19.55 per cent was enough to see it lead the bidders for Port-Harcourt DISCO.

All the bids would be subjected to a post-bid evaluation and consistency test process by the relevant government agencies supervised by the BPE to ensure that the commercial offers are feasible and consistent with the business plan spelt out in the RTP.

The result of the final evaluation process would be submitted to the NCP for ratification and approval in accordance with the provisions of the RTP.