FG concludes power privatisation as Afam Genco, Kaduna Disco get preferred bidders

by Editor

August 1, 2013 | 1:44 pm
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The Federal government on Wednesday tentatively concluded the power sector privatisation with the sale of Afam Power Generating Company and Kaduna electricity Distribution company. The two are the remaining companies that emerged from the unbundling of the Power Holding Company of Nigeria,  slated for privatisation.

With a bid price of $260, 050, 000, Taleveras Group, a consortium made up of Alstom Nigeria Limited, Alstom Group, the Rivers State government and Talevaras Petroleum Trading BV, emerged the preferred bidder for Afam Power Generation Plc. This is however subject to ratification by the National Council on Privatisation (NCP).

TES Power limited, a consortium of five companies, including, China National Electric Engineering ltd, Delta Oil Company, Ancient International Infrastructure, Suburban Erst Africa Group limited, Cobra Instalaciounes Services S.A and Siemens Plc emerged the reserve bidder for Afam, with a $222,900,000 bid price.

For the Kaduna Disco, Northwest Power ltd, a consortium of ten companies, became the preferred bidder, having offered the highest Aggregate Technical Commercial and Collection loss reduction  (ATC &C) figure of 29.26 percent.
In ranking, Northwest was followed by Leda Consortium ltd with 26.71 percent, NAHCO Consortium with 22.83 percent; INCAR Power ltd, 22.75 percent; Copper Belt Consortium ltd, 21.07 percent and Axis Power Distribution ltd with 17.40 percent.

Also, international investors have responded with enthusiasm to the Nigerian Government’s attempts to attract private investment into its independent power projects with over 100 bidders submitting Expressions of Interest to acquire majority shareholdings in the NIPP ten new thermal power plants. The combined sales could generate several billions of US dollars and would represent one of its most successful private investment projects.

According to the Niger Delta Power Holdings Company (NDPHC), 110 bids had been received by the July 19th cut-off date.

The sale process is being handled by the NDPHC, a special purpose company set up by the Government in 2005 to implement its National Integrated Power Project (NIPP) and the Bureau of Public Enterprises. The NIPP represents the Nigerian Government’s flagship project that is mandated to add new generation, transmission and distribution capacity to Nigeria’s electricity supply industry and resolve its chronic shortfall in supply.

At the opening of the commercial bids for the privatisation of the two companies in Abuja, Atedo Peterside, Chairman, of the Technical Committee of the NCP, said that the two companies- Taleveras Group and TES Power  ltd attained the minimum 75 percent score and also submitted their post qualification security for Afam Genco.

For the Kaduna Disco, the six bidders attained the minimum 75 percent score and  also submitted their post qualification security, Peterside further said.

The Kaduna Disco and Afam Genco were among the 17 PHCN successor companies that were advertised for sale in December 2010.  Both companies along with 15 others, went through a full competitive tender process which culminated in the submission of technical and financial proposal in July 2012.

Peterside explained that following the rigorous technical evaluation of all the bids however, none of the bids received for Afam Power Plc and Kaduna Electricity Distribution Plc scored the minimum 75 percent required to progress to the final bid stage.

This development, according to him, compelled the NCP to order a re-run of the entire transaction, as it was not prepared to settle for sub-optimal outcome.

But in order to fast-track the process, the NCP directed that no fresh adverts would be placed, but instead, all pre-qualified bidders who had earlier expressed interest in the power privatisation, and paid the $20,000 data room fees, be allowed to participate in the exercise.

For the Afam Genco, while Telaveras won the bid, having been established as the highest bidder above the reserve price, NorthWest was selected as the core investor  for Kaduna Disco, using the Aggregate Technical, Commercial and Collection (ATC&C) loss reduction strategy.

The ATC&C Strategy is a clear departure from the NCP’s usual practice of awarding companies to the bidder who makes the highest financial offer, after being the technically qualified, as was done for the other ten Discos.


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by Editor

August 1, 2013 | 1:44 pm
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