Korean and indigenous consortium, KEPCO/NEDC has paid the sum of $32.7million, being 25 percent of its bid price of $131million for the Ikeja Electricity Distribution Company, in which it emerged the core investor. The DISCO was the most keenly contested during the bid tenders, with 10 bids submitted for it.
The payment follows the signing of agreements for the handover of the unbundled companies from the Power Holding Company, PHCN, including generation and distribution companies to the preferred bidders, which took place late last month.
Confirming the payment, a Presidency source told Codewit, “Yes, KEPCO/NEDC paid 25 percent of its bid price for Ikeja DISCO on Monday. The cheque was paid to BPE (Bureau of Public Entreprises).”
However, the Chairman of the Technical Committee, National Council on Privatisation, NCP, Mr. Atedo Peterside, in a telephone interview with Vanguard, insisted that there was no such payment.
According to him, “To the best of my knowledge, it is only the Amperion Consortium that has paid the 25 percent for the Geregu Power Plant. They were the first of the bid winners to make the 25 percent payment, and they did so that Thursday, when in Abuja.”
He argued that the public may have misconstrued this to mean KEPCO, since it was also announced that KEPCO has won 70 percent stake in Egbin Power Plant for $670million.
But reacting to the fairness of awarding the Ikeja DISCO and Egbin, both Nigeria’s biggest DISCO and GENCO, which many argued gave undue advantage to the Korean consortium and may tend towards monopoly in Lagos, Peterside defended that the privatization process has not gone outside its guidelines.
“The rules are very clear and very well known. A core investor is allowed to win a maximum of two DISCOs and one GENCO, which makes three PHCN successor companies,” he said.
He further noted that the Integrated Consortium won two DISCOs – Ibadan and Yola. “Please recall that KEPCO also competed for Ibadan, where they were beaten by Integrated’s superior bid. Based on the rules, KEPCO could have won Ikeja and Ibadan DISCOs plus the Egbin GENCO,” he added.
With regard to the ability of KEPCO to muscle up close to a billion dollars to finance the bids, Peterside argued that as a multinational electricity company, the company can afford to pay. Besides, he added, “At every stage there are bank guarantees and there is a penalty for failure.”