The federal government yesterday announced seven consortiums as the preferred and reserved bidders for the privatisation of the Power Holding Company of Nigeria (PHCN) successor generation companies (Gencos) in bids totalling $707.3 million.
The government also reassured prospective core investors of its commitment to international best practices in the sale of the PHCN successor companies.
The companies are three thermal plants – Geregu Power Plc, Sapele Power Plc, and Ughelli Power Plc. The two hydro plants are Shiroro Power Plc and Kainji Power Plc.
Amperion’s bid for the Ughelli power company was unsuccessful as another consortium made up Transnational Company of Nigeria, Transcorp, with offer of $300 million for the plant was declared the winner.
Transcorp is chaired by former chief executive officer of UBA Tony Elumelu; his company, Heirs Holdings, has the single largest stake in the conglomerate.
Chinese Nigeria Power Consortium was declared winner of Sapele power plant with a bid of $201 million.
Mainstream Energy Solutions Limited won the contract to manage the Kainji Power Company with an offer of $50.8 million as fixed annual fees and $237.9 as commencement fees.
Also, North-South Power, believed to be backed by former military president Ibrahim Babangida, was declared the preferred bidder for the Shiroro power plant with an offer of $111.7 million as fixed annual fees and $236.8 million as commencement fees.
Amperion Power Distribution Limited, a consortium made up of Israeli-based BSG Resource Limited, State Grid Corporation of China and Forte Oil Plc, in which billionaire businessman Femi Otedola is the major stakeholder as the local partner, has emerged the preferred bidder for 414mw Geregu Power in the financial bids for the power generation companies being sold under the privatisation programme of the federal government that opened yesterday in Abuja. The consortium bid $132 million for the power plant located in Kogi State.
Amperion was the sole bidder for the Geregu plant and also submitted bid for Ughelli power station.
However, the bid for Afam power plant, according to Atedo Peterside, chairman, National Council of Privatisation, was not opened as all the three bidders failed to meet the stipulated guidelines for the bids. All the winning bids are subject to the approval of the president.
“This is a milestone in the power privatisation process,” Darius Ishaku, minister of state for power, said during the bid opening ceremony in Abuja.
Ms Bolanle Onagoruwa, the director-general, Bureau of Public Enterprises (BPE), gave the assurance in Abuja at the opening of the financial bids for the sale of five electricity generation companies.
Commenting on the successful bid, chairman of Transcorp Plc Mr. Tony O. Elumelu, CON, said: “Our intent is to leverage our time-tested expertise in turning around businesses in growing the Ughelli Power Plant to a 1,000mw generating plant by 2017.’’
?Amperion Consortium emerged the preferred bidder for Geregu Power Plc with a bid offer of $132 million; Transcorp and Wood Rock/Symbion/Thomasen PSL Power Consortium emerged preferred bidder for Ughelli Power Plc with a bid price of $300 million; while Amperion Consortium emerged reserved bidder with a price of $252million.
For Sapele Power Plc, CMEC/Eurafric Energy came out the preferred bidder with an offer of $201 million while JBN-Nestoil Power Services Ltd came out as reserved bidder with an offer of $106.5 million.
For the hydro plants which are being given out by the NCP as concessions for an initial period of 15 years, the bid for Kainji was won by Mainstream Energy Solutions Ltd. They offered to pay an annual fee of $50.76 million and are also expected to pay an upfront commencement fee of $237.87 million. Shiroro Power Plc was won by North South Power Company Ltd at a fixed annual fee of $23.602 million and a commencement fee of $111.65 million.
Announcing the winners of the bid in Abuja, chairman of the Technical Committee of the National Council on Privatisation (NCP), Mr Atedo Peterside, said the government is selling outright the Ughelli and Sapele Power plants, while it is only selling 51 per cent of the Geregu plant. The two hydro power plants are being given out as concessions at initial periods of 15 years.
Peterside said that, to qualify to have its commercial bid opened, each bidder was required to furnish, within 15 business days of official notification of technical qualification, a post-qualification security in the form of a bank guarantee or a letter of credit.
He said for Geregu Power Plc, Sapele Power Plc, Ughelli Power Plc and Shiroro Power Plc, the post-qualification security required from each bidder was $10 million whilst $15 million was required for Kainji Power Plc.
He said that “by the bid submission deadline of 5pm, 17th July 2012, the Bureau of Public Enterprises, BPE, received 25 proposals from pre-qualified bidders, 22 bids for thermal Gencos and three bids for hydro Gencos. After the sorting of the bids, two bids that had no commercial proposals were rejected while the remaining valid 23 bids were assigned to the evaluating teams by balloting to ensure that no evaluator had any prior knowledge of which he/she would be evaluating.
“Out of the 23 bids that made it to the evaluation stage, 10 of the bids failed the first test of completeness and responsiveness. The remaining 13 bids were then subjected to full technical evaluation. Out of the 13 bids, eight scored the minimum 75 per cent that was required to proceed to the next stage. The bidders were then asked to submit the post-qualification bidders guarantee following the approval of the evaluation results by NCP.”
Peterside however warned that the emergence of the preferred bidders was not final as they would have to scale some stipulations by the NCP and meet some requirements before they can fully take over the plants.
“The bidders are going to undergo further verification and if at any stage any new information is discovered by the NCP, they could be used against them,” Peterside said.
In her remarks, the DG of BPE, Bolanle Onagoruwa, reaffirmed that the NCP would continue to ensure that the electricity sector privatisation transactions are completed to the best of internationally accepted standards.
She said, “We have come so far and achieved so much since mid-2010 when this administration restarted the electricity sector reform programme. With your support and with the strong desire to serve our patient longsuffering citizens of Nigeria, even as we know that there is yet more hard work ahead and tough days to come, we will continue to strive mightily to achieve even more and ultimately succeed.”
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