The payment represents the mandatory 25 per cent of the total cost of the transaction pre-set valuation audit conducted by NERC.
The Bureau for Public Enterprises, BPE, said on Thursday that West Power & Gas Consortium, which emerged the preferred bidder for the Eko Distribution Company, has made the initial payment of $33.75 million (N5 billion) in fulfillment of its obligations towards the formal take-over of the company.
The payment represents the mandatory 25 per cent of the total cost of the transaction pre-set valuation audit conducted by the Nigerian Electricity Regulatory Commission, NERC, which gave $135 million (N22 billion) as 60 per cent equity of the company.
Following the formal bids opening by BPE held on October 16, 2012 in Abuja for ten of the 11 Power Holding Company of Nigeria, PHCN, successor companies slated for privatization, the consortium emerged the reserved bidder for the company behind Integrated Energy Distribution & Marketing Limited, which came tops.
The bid guidelines announced by the National Council on Privatisation, NCP, prior to the exercise, stipulated that bidders would be ranked based on the aggregate technical, commercial and collection (ATC&C) loss reduction proposals submitted to the BPE along with their technical proposals.
Integrated Energy Limited was ranked 21.43 per cent above KEPCO/NEDC Consortium’s 20.43 per cent and West Power & Gas Consortium’s 18.55 per cent.
The bid guidelines forbid a bidder from being declared winner in more than two distribution companies. Bid winners are also not allowed a double win of Eko and Ikeja distribution companies
In approving the bid winners, the Chairman of the Technical Committee of the NCP, Atedo Peterside, declared West Power & Gas Consortium as preferred bidder ahead of Oba Otudeko’s Honeywell Energy Resources International Limited. Honeywell emerged as reserve bidder in view of Integrated Energy Limited emerging winner in the bids for Yola and Ibadan power distribution companies.
According to BPE, the consortium, comprising Alpha Consortium Limited, Atlantic Meridean, Africa Infrastructure Investment Fund 2 Mauritius, and Siemens Limited of Germany, made the payment in two tranches ahead of the March 21, 2013 deadline for the bidders.
It is expected that the balance of 75 per cent of the total cost would be made within the next six months.
The consortium was one of the 180 prospective bidders that responded to the advertisement by NCP in December, 2010 for Expressions of Interest, EOIs, from prospective core investors interested in acquiring controlling stake in the 11 successor distribution companies, DISCOS created from PHCN.
Following the evaluation of the applications, 80 bidders were shortlisted out of which 72 met the deadline for the payment of the data room access fee of $20,000 for the Request for Proposals, RFP, to proceed to the next stage of the transaction.
About 54 commercial and technical proposals were later received from pre-qualified bidders, 10 of which failed the first test of completeness and responsiveness while the remaining 44 bids were subjected to full technical evaluation.
Out of the 44 bids, 32 submitted by 20 different bidders scored the minimum of 75 per cent required to progress to the next stage in the process.