Those that lost out in the bid for power Distribution Companies (Discos) unbundled from the Power Holding Company of Nigeria (PHCN) have been asked to state the specific rules that were breached in the privatisation exercise.
Chairman, Technical Committee, National Council on Privatisation (NCP), Atedo Peterside, threw the challenge in a chat with The Nation at the weekend.
His reaction came hours after the Nigerian Economic Summit Group (NESG) urged governors of the states that lost out in the bid for the discos not to play politics with the privatisation exercise. Four governors – Adams Oshiomhole (Edo), Emmanuel Uduaghan (Delta) and Kayode Fayemi (Ekiti),whose consortium – Southern Electricity Distribution Company Limited – lost the bid for the Benin Electricity Distribution Company (DISCO) had last Thursday opposed the emergence of Vigeo Power Consortium as the preferred bidder.The trio, at a joint news conference in Abuja, faulted the process and threatened not to allow Vigeo Power to operate in their states.
Oshiomhole, who spoke on behalf of the others, had described the bid process, as conducted by the Bureau of Public Enterprises (BPE), as fraudulent. He also said it failed the credibility test.The Benin Disco is one of 11 distribution utilities created from the unbundling of the PHCN, and was slated for sale alongside others under the power reform and privatisation programme.
Vigeo Power, partly owned by Mr Victor Gbolade Osibodu, had edged out Southern Electricity, promoted by Edo, Delta, Ekiti and Ondo states, to emerge the preferred bidder at the unveiling of the commercial bids submitted by investors.
But reacting to the allegation of fraud in the bidding process, Peterside, who is also the Chairman of Stanbic/IBTC Bank, said if the losers read and understood the rules of privatisation process, they would realise that rules were followed to the latter.
He said: “It is sad that in year 2012 that some Nigerians will not go and read the rules before they (losers) rush to make comments. The rules (Request for Proposal) are in 72 pages.
They should sight which rules were breached.”If they read and understood the rules, they will comprehend that the rules were followed to the latter from the very first day of the transactions. They all took part in a race and the final results have not been announced. So, if they are now faulting the entire process, it shows that something is wrong.”
Chairman, NESG, Mr Foluso Phillips, who spoke on behalf of the Group, questioned why the governors that lost out are trying to stall the privatisation exercise despite the fact that the bidders were given equal opportunities.
He said: “We had a bidding process in which everybody participated. If they (the governors) have a problem with the process, the issues should have been raised at the beginning of the process. Why is it that they are now complaining after the process had been concluded?
“We are not in a military era. I don’t really know what they are complaining about because they already have 30 per cent stake in the project. Nothing should stop the privatisation exercise because the Summit believes in the deregulation of the Nigerian economy.
The whole economy should be deregulated because government in all aspect has shown that it is not capable of running a commercial entity.
“See what happened in the telecoms sector. We need deregulation so that the private sector can create good jobs and provide better services.”
Besides, he said states and the Federal Government should not be allowed to much involved in the power sector because they will not be able to add value.
“If the states and Federal Government participate, it will be more complicated because they will start fighting themselves over who sits on the board instead of looking at the commercial entity,” he said.
Frontline financial expert, Mr Bismarck Rewane, also commended the Federal Government for opening up the power sector to private firms.Rewane, who is the Managing Director of Financial Derivatives Company Limited, stated that private owned firms were far better than public owned. “State monopoly is the worst structure in any country. As long as people are paying for what they using, Nigeria will be better off,” he said.
The BPE and Vigeo Power Limited had also denied the allegation of lack of transparency and incompetence.
BPE, in a statement, faulted the governors’ position, stating that accusation of a flawed process and irregularities against the privatisation bureau was unfounded and reckless.
It said: “The bidding process was transparent and we followed the bible of our transaction in doing that. We did not deviate from the norm when dealing with the bidding. I think the governors are bad losers.”The Chief Executive Officer of Global Utilities Management Company (GUMCO), a subsidiary of Vigeo, Mr Abu Ejoor, also said it was wrong to allege that Vigeo does not have experience to run Discos.
He said Vigeo, which has also been involved in a public sector initiative in the power sector for the past 11 years, has been involved in all the public-private partnership initiatives in the distribution sub-sector starting from revenue cycle management (RCM).
Ejoor added that his company also installed over 200,000 pre-paid meters in the Benin zone and was in the region managing the process, thus making it the only experienced local player.
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