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The Federal
Government, on Friday, demonstrated magnanimity by granted a 20-day
extension on the deadline for the payment of the initial big security
on the national telecoms carrier, the Nigerian Telecommunications
Limited (NITEL), and its mobile subsidiary, MTel.

New Generation
Consortium, which emerged the preferred bidder during last February’s
bid exercise organised by the Bureau for Public Enterprises (BPE), was
given up to last Thursday to pay for the 30 percent bid security on its
$2.5billion offer.

Following President
Goodluck Jonathan’s approval early last month, for BPE to bring the
controversial privatisation to a close, the consortium was, October 25,
asked to pay the initial bid security of $750million (about
N112.5billion) within ten calendar days from the date of its receipt of
a demand letter conveying its acknowledgment as winner.

In accordance with
the provisions of the Requests for Proposal (RFP) issued to all bidders
at the inception of the process, the letter indicated that the payment
of the bid security would be a pre-condition for the issuance of the
formal offer letter for the Consortium to go ahead to complete the
acquisition process.

However, at the
close of business on Thursday, rather than the electronic transfer
document indicating payment, the Consortium showed up at the BPE with a
copy of the letter addressed to the National Council on Privatisation
(NCP) requesting for 30 days extension to enable it mobilise funds for
the payment.

Deadline recipe for failure

Chief Executive of
the consortium, Usman Gumi, in a response to inquiries on Friday, told
NEXT that the letter despatched shortly before the expiration of the
deadline on Thursday became necessary considering the long period it
took government to approve the conclusion of the bid.

“We have sent a
letter to the National Council on Privatisation (NCP) seeking for an
extension by 30 banking days of the deadline for the payment of the
initial 30 percent bid security, considering the negative impact the
long delay by government to take a final decision to approve the
conclusion of the transaction has had on the entire process,” Mr. Gumi
said.

“Giving only ten
calendar days for the payment of $750million is a recipe for failure.
No businessman would like to tie down his money to wait for over eight
months for government to take its decision,” he said, assuring that the
consortium is committed to realising the dreams of Nigerians as well as
the expectations of the Federal Government in the privatisation
programme.

A statement by the
BPE, conveying government approval of the bidder’s request had alluded
to the “consortium’s difficulty with concluding the due diligence and
compliance processes associated with the transfer of such huge funds.

According to BPE
spokesman, Chukwuma Nwoko, the consortium requested for “a 20-working
day extension to clarify all compliance and due diligence issues, and
also to remit the funds into BPE’s account.”

Extension approved in breach

NEXT investigations
reveal that government decision to grant the extension may have been in
breach of the stipulated bid guidelines issued at the beginning of the
bid process, which indicated that the winner would have to revert to
the reserve bidder in the event of failure of the preferred bidder to
meet the payment deadline.

However, followers
of the privatisation process accuse the NCP and BPE of double standards
in the application of its bid guidelines rules by accepting to
accommodate the interest of a bid winner who experience difficulties in
meeting a payment deadline as a result of delays caused by bureaucratic
hitches, when they had ignored similar requests in the past.

Observers cite the
instance of BFIGroup, the American bidder, which emerged the preferred
bidder for the Aluminium Smelter Company of Nigeria (ALSCON) in 2003,
but was disqualified after BPE accused it of failure to meet the
deadline for the payment of 10 percent of its $410million offer.

The company had
requested for an extension of the payment deadline, following a delay
by BPE to issue it the mandatory demand letter acknowledging its
emergence as the preferred bidder within 48 hours of the declaration of
the winner by the NCP.