The federal government, through the Joint Transaction Board (JTB) comprising the National Council on Privatisation (NCP) and the Niger Delta Power Holding Company (NDPHC), owners of the National Integrated Power Project (NIPP) and the preferred bidders for the seven NIPP power plants are to commence negotiations for Share Sales Agreement for the assets, THISDAY’s investigations have revealed.
This development, which is coming several months behind schedule, followed the JTB’s approval on March 21 of the preferred and reserved bidders of seven out of the 10 NIPP power plants.
The handover of the 10 NIPP plants was scheduled for June 2014, according to the timelines unveiled in June 2013.
But owing to non-completion of some of the projects and pending litigations, the privatisation process is several months behind schedule, while only seven assets are currently being sold.
A source at NCP told THISDAY during the weekend that the Bureau of Public Enterprises (BPE), which serves as the secretariat of the NCP would negotiate the Share Sales Agreement with the preferred bidders.
“With the emergence of the preferred bidders on March 21, the next stage is for the Joint Transaction Board to meet and approve the Share Sales Agreement. BPE will negotiate this with the investors. Only seven plants are being sold because litigations have tied down three plants.
"When they agree on everything, they will sign the transaction industry documents and this will automatically require the bidders to pay 25 per cent of the acquisition cost within 15 working days from the date of the signing of the transaction industry documents,” he said.
He stated that as soon as the Share Sales Agreement is successfully negotiated and the transaction industry documents signed, each of the successful investors will be required to make 15 per cent payment guarantee within 15 working days, followed by the payment of the 25 per cent of the bid price.
According to him, each of the investors will be required to make the balance of the payments within six months, or lose the asset to the reserve bidder.
The initial timetable unveiled by CPCS Global, which is the Transaction Adviser to NDPHC, had scheduled the submission of the bids for the 10 plants for July 19, 2013, short-listing of bidders for August 8, 2013; while bidders' conference was also scheduled for September 18 and 19, 2013.
The original timelines also required the bidders to submit their proposals on November 8, 2013, to be followed by the evaluation of the technical proposals a month later.
The handover of the 10 Power plants to the investors was also scheduled for June 2014. However, unforeseen challenges delayed bid submission and evaluation process.
There was also a delay in the constitution of the various committees from BPE, Nigerian Electric Regulatory Commission (NERC), Ministry of Power, NEXANT, CPCS Global; and the Nigeria Infrastructure Advisory Facility (NIAF), which is funded by the United Kingdom Department for International Development (NIAF).
These committees were set up to evaluate the bids with officials from the Economic and Financial Crimes Commission (EFCC); Independent Corrupt Practices Commission (ICPC) and Department of State Security (DSS) as observers.