Nigeria Content Online

More
private companies have expressed their interest in the electricity
companies being offered for sale by the federal government ahead of the
February 18 deadline for receipt of applications.

In December last
year, the government, through the Bureau for Public Enterprises, called
for interested buyers for 51 per cent stake in 11 electricity
distribution companies, while concessionaires are sought for four
thermal power stations and two hydro power stations.

Efforts to get the
actual number of firms that have indicated interest were not successful
as Chukwuma Nwoko, BPE spokesperson, refused to divulge the figure.

However, Global
Utilities Management Company (GUMCO), a subsidiary of Vigeo Group, last
week, officially indicated its interest in the bid.

The chairman of the
Vigeo Group, Victor Osibodu, said the company is partnering with two
Indian companies to achieve its goals, and compete favourably with other
companies who have shown interest. Nigeria’s power sector has been
plagued by several problems that have prevented it from operating at
optimum level. In a bid to address the difficulty of inadequate electric
power supply, President Goodluck Jonathan last August presented a
Roadmap on the Power Sector Reform.

A major thrust of
the Roadmap, which foundation was laid in 2005 by former president,
Olusegun Obasanjo, was the privatisation and concession of the
distribution segment of the market while concessioning the generation
and transmission outlay.

Mr. Nwoko said in
addition to the offer of a minimum of 51 per cent of the companies,
bidders will be expected to submit proposals that reflect information on
their strategy for meeting the efficiency targets that will be
specified in the Request for Proposals.

“Care will be taken,
by working closely with NERC, to ensure that a monopoly or oligopoly of
market power in the generation sector is not acquired through these
divestitures. The competitive bulk procurement of electricity by the
Bulk Trader; and the bilateral contracting of electricity between
generating and distributing companies – all overseen by a
fully-empowered independent sector regulator through the Multi Year
Tariff Order (MYTO) mechanism – are the key guarantors that electricity
will be generated into the grid on a competitive, commercial and
consumer-oriented basis,” he said.

However, the
National Union of Electricity Employees (NUEE) has vowed to resist any
attempt to sell off the firms. The NUEE secretary general, Joe Ajaero,
said the workers are against the planned sale when labour issues have
not been addressed.

“Have they sold
them? Let them submit their letters of interest and let them take over.
We insist that nothing can take place there. All those noise they are
making just ends at the pages of newspapers. You cannot transfer
ownership when you have not addressed the pending issues of those
working there,” Mr. Ajaero said.

Positive Outlook

Vetiva Capital
Management Limited, a finance firm, says the success of the process
would be closely linked to consistency in policy implementation and
political continuity.

“The Roadmap broadly
outlines a programme schedule, which if properly implemented and
timelines are adhered to, will be expected to bolster power generation,
transmission, and consumption in Nigeria significantly.”

The firm identified
the delay in the outcome of the reforms to the stalled funding of the
National Integrated Power Project (NIPP), for more than two years amidst
allegations of corruption.

“Consequently, a key
risk to its success would be changes in the present proponents of the
Power Roadmap, especially as we approach the elections. If this risk
element crystallizes and a change is effected, we are likely to see the
process being altered or suspended completely again, as the new leaders
at the helm of affairs would come in with their own strategies,” it
says.

Sunday Salako, a
member of the National Economic Management Team (NEMT), however, said
people are tired of roadmaps and visions.

“People want to see
things happen. Last week, I was in Ghana for a whole week and there was
no power outage. The truth is staring us in the eye and we should
actually be challenged. How did they do it? I think that is what we need
to do now,” Mr. Salako said.