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Tag: PHCN

  • Council tasks Jonathan, NASS on PHCN, Sokoto govt feud

    Council tasks Jonathan, NASS on PHCN, Sokoto govt feud

    The Inter-Party Advisory Council of Nigeria, Sokoto State chapter, has called on President Goodluck Jonathan to intervene in the current feud between Governor Aliyu Wamakko and the Power Holding Company of Nigeria.

    The News Agency of Nigeria quoted the chairman of the Council, Alhaji Ahmed Tangaza, as making the call at a news conference in Sokoto on Saturday.

    PHCN has been at logger heads with Wamakko over the alleged assault of one of its staff by the governor.

    Tangaza also appealed to the Senate, the House of Representatives, the National Security Adviser (NSA) and the Minister of Mines and Power to help resolve the matter.

    “Our attention has been drawn to the act of lawlessness and provocation against the law abiding people of the state by PHCN staff operating under the aegis of the National Union of Electricity Employees over a matter that is subjudice.

    “They should intervene and mitigate the unwarranted suffering of the people of Sokoto state by calling PHCN staff to order,’’ Tangaza said.

    He alleged that PHCN had cut off electricity supply to the state on an “unsubstantiated allegation against the governor.”

    “The council hereby condemned this act of lawlessness and urge PHCN to, within 24 hours, restore normal electricity supply to the state.

    “Otherwise, we would be left with no option than going to court to seek redress / compensation,” Tangaza said.

    The council chairman lamented that there were in-patients who were on life support machines in various health centres in the state.

    “Our returning pilgrims are currently using the Sultan Abubakar III international airport for landing.

    “Water supply is currently being hampered and PHCN should not be unmindful of the grave consequences of their actions to the provision of essential services,” Tangaza said.

     

  • PHCN official electrocuted in Osun forest

    An official of the Power Holding Company of Nigeria (PHCN) has been electrocuted in a forest in Osun State.

    It was learnt that the deceased and other PHCN workers were trying to identify the cause of power outage in some parts of Ondo and Ekiti states when the incident occurred.

    PHCN engineers are yet to identify the cause of the eight-day old power outage.

    A source said the PHCN team spent the weekend in a forest between Erin-Ijesa in Osun State and the boundary towns of Ikeji-Arakeji and Owena in Ondo State, trying to identify the fault.

    An Akure engineer, Mr. Adewale Oketade, blamed the worker’s death on the management of the PHCN.

    Oketade said it was dangerous for engineers to work on power lines because the larger parts of the installations were built in forests, which have difficult terrains.

    He said air surveillance should be used for the easy detection of faults.

    PHCN spokesman, Akure Business Office, Mr. Adegoke Ademola confirmed the death.

    Ademola said PHCN engineers were still working on the power lines in the forest. He said electricity would be restored in the affected areas before the week runs out.

  • PHCN firms bid crisis deepens

    PHCN firms bid crisis deepens

    •My fear, by Uduaghan

     

    THERE seems to be no end to the bickering over the bidding for the Power Distribution Companies (DISCOS), despite the government’s insistence that the process was clean.

    A committee has been set up to review parts of the process to ensure the success of a particular company which is interested in the Benin Disco, a source said yesterday.

    The committee is said to be headed by a permanent secretary.

    “It is to protect the interest of a company with huge losses. Besides, the company is incompetent, but it is connected with a very senior official of the Presidency,” the source said, pleading not to be named.

    Delta State Governor Emmanuel Uduaghan urged the National Assembly to intervene in the sale of the distribution companies of the Power Holding Company of Nigeria (PHCN) to ensure that it follows due process.

    Uduaghan spoke in Asaba, the state capital, while hosting members of the House of Representatives’ Committee on Petroleum Resources (Down stream sector).

    He said he was worried that the companies may fall into wrong hands.

    Uduaghan said a situation where the communities and states directly affected are sidelined does not portend good for the people.

    He said with “such shoddy process of sale”, the companies would end up in the hands of people, who cannot deliver.

    The governor said stable electricity supply is necessary for economic growth and urged the authorities not to politicise the unbundling process.

    He said if it is done wrongly, it could create more problems for the country.

    Uduaghan said: “State governments play crucial roles in the energy sector as regards the provision of transformers and setting up of electric lines. Governors are deeply concerned about the power situation and when the chips are down, it is the state governments that communities run to for transformers and other equipment. States should be accommodated in the privatisation process”

    He said the nation experienced similar challenges in the petroleum sector when some oil wells were sold without involving the communities and the states, adding that eventually, most of the beneficiaries were unable to access the wells.

    Chairman of the committee Mr. Dakuku Peterside said they were in the state to inspect Federal Government projects.

    Peterside said the routine oversight function was necessary to check what was being done with funds and ascertain whether projects earmarked for the state were executed.

    He said Delta was strategic in the oil industry and should not be ignored in the implementation of projects and programmes.

     

  • Why power sector privatisation

    Why power sector privatisation

    As the power sector privatisation draws to a close, the protests over the emergence of preferred bidders for the distribution assets may rubbish thes exercise adjudged to be one the most transparent by local and international observers, EMEKA UGWUANYI Assistant Editor (Energy) writes.

    Nigerians are increasingly getting expectant of the day electricity would be stable as the privatisation process of the power sector gets completed by the end of this month.

    The Federal Government as well as other stakeholders believes the takeover of operation and management of the electricity industry would remedy the age long problem of the sector.

    Since the past four decades the power sector has been owned and controlled by the government through the Power Holding Company of Nigeria (PHCN), and despite enormous funds channelled toward improving supply and service delivery, no significant result has been achieved. This informed the government’s decision to privatise the industry.

     

    The selection process

    To ensure that utmost transparency was applied and due diligence process followed in the entire privatisation process, Chairman, Technical Committee of the National Council on Privatisation (NCP), Mr. Atedo Peterside, said in his opening remarks of commercial bids for the privatisation of the PHCN successor distribution companies in Abuja on October 16, 2012, that all the prequalified bidders were given access to the virtual data room from 1st September 2011 to the proposal submission date of July 31, 2012. Pre-qualified bidders were also allowed to visit the distribution companies and physical data rooms that were located within the franchise area of each distribution company, he added.

    To further ensure transparency in the process, Peterside said that the NCP formed three committees to evaluate the bids that were received. Each of the committees had seven members drawn from the following agencies: BPE; Nigeria Electricity Regulatory Commission; Federal Ministry of Power; CPCS Transcom – advisers on the transaction; NEXANT—USAID-funded power sector consultants providing support to the BPE; and NIAF—DFID-funded infrastructure support programme to the Nigerian government.

    Besides, he said the officials of the Economic and Financial Crimes Commission (EFCC), the Independent Corrupt Practices Commission (ICPC) and Directorate of State Security Services (DSSS) also observed the process from bid submission to the conclusion of evaluation. They were therefore witnesses to the fact that all late-comers were turned back.

    Besides, the BPE said the reason the privatisation deadline was shifted from February to October was based on the demand of bidders who had claimed they were not carried along on some issues. The Bureau also said because the privatisation was intended to be market driven, it shifted the deadline to make room for any investor to clarify any issue of his interest.

    Furthermore, state governments already have opportunity to own 30 per cent stake in assets within their areas and the Federal Government promised to release more stakes from its own to the states depending on the quantum of investment they made in the assets.

     

    The protest

    The consortium to which the governments of Edo, Delta, Ondo and Ekiti states have interests – Southern Electricity Distribution Company – was unable to score the highest mark in Aggregate Technical, Commercial and Collection (ATC&C) losses reduction, which was a major test for the bidders and consequently lost to another competitor, Vigeo Power Consortium. The governors of the four states had at a press conference dismissed the result of the privatisation exercise for distribution companies as fraudulent.

    “The entire process was a racket that is inconsistent with running a transparent government. The BPE used a set of criteria that have never been used before,” the governors said.

    Governors Adams Oshiomhole (Edo), Emmanuel Uduaghan (Delta) and Kayode Fayemi (Ekiti) in Abuja last week said that apart from the privatisation process lacking transparency, Vigeo Power Consortium lacks the necessary technical competence and financial capability to run the Benin Disco.

    Oshiomhole said the process was rigged to favour Vigeo because during the technical evaluation of the bid process, Southern Electricity scored 898 points as against Vigeo’s 847 points. He questioned how Vigeo emerged the preferred bidder at last.

    Fayemi said: “Our major complaint is competence. We are disappointed that the company that was awarded the preferred bid has no technical competence and the process by the BPE was not transparent. We are not going to sit idly and show lack of concern because the process was not transparent. We will take that up with those concerned. This is the handiwork of a racket.”

    The three governors said they had made their complaints known to President Goodluck Jonathan.

     

    BPE’s position

    BPE, in a statement, faulted the governors’ position, stating that accusation of a flawed process and irregularities against the privatisation bureau was unfounded and reckless. “The bidding process was transparent and we followed the bible of our transaction in doing that. We did not deviate from the norm when dealing with the bidding. I think the governors are bad losers,” it added.

    In a bid to give the press an opportunity to ask questions about the allegations levelled against the BPE, the Bureau has also slated a press conference that held yesterday.

     

    Vigeo’s defence

    Also reacting to the governors’ statement, the Chief Executive Officer of Global Utilities Management Company Limited (GUMCO), Mr. Abu Ejoor, said that his company, which is Vigeo’s local technical partner, has been involved in virtually all the public-private partnership initiatives in the distribution sub-sector starting from revenue cycle management (RCM). He said RCM is an outsourced management contract, which the company participated and ran in the Shomolu, Ikorodu and Ojodu districts of Ikeja Disco between 2002 and 2007.

    “During this period, the company was involved in the entire revenue cycle management from metering to revenue collection, assisting the zone to boost its revenue collection and reducing commercial losses.

    “In 2006, GUMCO, under the National Prepaid Metering Programme, introduced prepaid metering and billing to Benin Electricity Distribution Company. It started from Benin City and later extended its operations to Warri, Asaba, Ondo and Ekiti.

    “Today GUMCO has presence in all the four states in Benin Disco, helping PHCN in the management of its commercial operations, including vending management. What the company does is to bring management and investment into improving the billing and collection of discos.

    “Of all the companies that bided, only Vigeo Power has local experience in utility management through its local partner GUMCO,” he added.

    On Vigeo’s foreign technical partner, he said the success of the Delhi model in the consortium is NDPL, a Tata Power Delhi distribution company providing efficiency.

    “We believe in the transparency of the process of BPE, the integrity of the members of the bid process, and the trust the president has in them to have given them this herculean task. So it is wrong for anybody to allege that we don’t have experience to run distribution companies,” he said.

    Besides, he said: “With the TATA partnership, a private interest operator in India, stakes for excelling are high. They operate a reform that the Nigerian power sector is modeled around. They have the objective to perform and are not saddled with the bureaucracy of government, the same reason the federal government is running from with the privatization.

    “The foreign technical partner, TPDDL is the success story of the Delhi Reform reducing ATC&C Losses from 50 percent to 11 percent within 10years. The only Industry leader in India and Asia that is known to the world and major international institutions is TPDDL, having won consistently in the last six years the Asian Power Award.”

    The company emerged the preferred bidder for the Benin Disco, for scoring an average technical, commercial and collection (ATC&C) loss reduction projection or efficiency ratio of 21.78 per cent, as against Southern Electricity’s 17.72 per cent.

    The Vigeo Power Consortium is made up companies with track records of successful performance, including Vigeo Holdings, GUMCO, Africa Finance Corporation (AFC) and Tata Power Delhi Distribution Limited (TPDDL).

     

    Stakeholders’ perspective

    The Nigerian Economic Summit Group (NESG) has urged governors of the states that lost out in the bid for the discos not to play politics with the privatisation exercise.

    The Chairman, NESG, Mr. Foluso Phillips, who spoke on behalf of the Group, questioned why the governors are trying to stall the privatisation exercise despite the fact that all the bidders were given equal opportunities.

    He said: “We had a bidding process in which everybody participated. If they (the governors) have a problem with the process, the issues should have been raised at the beginning of the process. Why is it that they are now complaining after the process had been concluded?

    “We are not in a military era. I don’t really know what they are complaining about because they already have 30 per cent stake in the project. Nothing should stop the privatisation exercise because the Summit believes in the deregulation of the Nigerian economy. The whole economy should be deregulated because government in all aspect has shown that it is not capable of running a commercial entity.

    “See what happened in the telecoms sector. We need deregulation so that the private sector can create good jobs and provide better services.”

    Besides, he said States and the Federal Government should not be allowed to be much involved in the power sector because they will not be able to add value.

    “If the states and Federal Government participate, it will be more complicated because they will start fighting themselves over who sits on the board instead of looking at the commercial entity,” he said.

    Frontline financial expert, Mr. Bismarck Rewane also commended the Federal Government for opening up the power sector to private firms. Rewane, who is the Managing Director of Financial Derivatives Company Limited, stated that private owned firms were far better than public owned. “State monopoly is the worst structure in any country. As long as people are paying for what they using, Nigeria will be better off,” he said.

    Chairman, Technical Committee, NCP, Atedo Peterside has also challenged those that lost out to state the specific rules that were breached in the privatisation exercise.

    Peterside, who is also the Chairman of Stanbic/IBTC Bank, said if the losers read and understood the rules of privatization process, they would realize that rules were followed to the latter. He said: “It is sad that in year 2012 some Nigerians will not go and read the rules before they (losers) rush to make comments. The rules (Request for Proposal) are in 72 pages. They should sight which rules were breached. If they read and understood the rules, they will comprehend that the rules were followed to the latter from the very first day of the transactions. They all took part in a race and the final results have not been announced. So, if they are now faulting the entire process, it shows that something is wrong.”

    An engineer and former Executive Director (ED) of the PHCN, Mr. Bisi Oyinloye also said the process for the selection of the Discos was very transparent and urged the BPE to muster enough courage to follow through the entire process.”From what I saw on the television, the process could not have been more transparent than that. Guidelines were given to everybody and they also took a risk. Some quoted low loss rates while others quoted high loss rates. So, I don’t know why the losers are kicking against the process. Nigerians will always be critical but the truth is that everyone was given the guidelines and they all had equal opportunities. The issue thereafter is if the selected distribution companies will be able to meet their loss rates,” he said.

     

    Conclusion

    Given the transparent way the privatisation of the power sector is being handled, President Goodluck Jonathan should be commended for giving the BPE and the National Council on Privatisation (NCP), the political will to privatise the power sector. Mr. President however, should not allow the process to be truncated by political pressure.

    The NCP under the chairmanship of Vice President Namadi Sambo, should also be commended for mustering enough courage to follow through the entire process diligently.

    Some stakeholders are of the view that the 30 per cent allocated to states may be a cog in the wheel of Nigerians’expectations to see quick achievement of stable power supply. They noted that the 30 per cent given to the states can be detrimental to the privatisation process. The governors faulting and questioning the criteria for the selection process will draw the privatisation programme backward because the companies they promoted also had equal opportunities.

    The protest by the governors may also drive away both local and foreign investors needed for the power sector that needs an annual investment of $10billion for the next 10 years.

    The aggrieved governors should demonstrate good sportsmanship and work together with the preferred bidders to fix the power sector problems and provide reliable power supply to Nigerians or in alternative they (governors) should go to court of law to challenge the result instead of threatening to truncate the privatisation programme by making operation difficult for the preferred bidders.

    Also, given the fact the Vigeo Consortium is very familiar with the terrain, having been in operation for over 11 years, it makes logical and economic sense to allow the company to continue in a seamless manner that would further add value to the consumers.

  • Sale of PHCN firms in order,says Peterside

    Sale of PHCN firms in order,says Peterside

    •NESG to Govs: Don’t play politics with privatisation of power 

    Those that lost out in the bid for power Distribution Companies (Discos) unbundled from the Power Holding Company of Nigeria (PHCN) have been asked to state the specific rules that were breached in the privatisation exercise.

    Chairman, Technical Committee, National Council on Privatisation (NCP), Atedo Peterside, threw the challenge in a chat with The Nation at the weekend.

    His reaction came hours after the Nigerian Economic Summit Group (NESG) urged governors of the states that lost out in the bid for the discos not to play politics with the privatisation exercise. Four governors – Adams Oshiomhole (Edo), Emmanuel Uduaghan (Delta) and Kayode Fayemi (Ekiti),whose consortium – Southern Electricity Distribution Company Limited – lost the bid for the Benin Electricity Distribution Company (DISCO) had last Thursday opposed the emergence of Vigeo Power Consortium as the preferred bidder.The trio, at a joint news conference in Abuja, faulted the process and threatened not to allow Vigeo Power to operate in their states.

    Oshiomhole, who spoke on behalf of the others, had described the bid process, as conducted by the Bureau of Public Enterprises (BPE), as fraudulent. He also said it failed the credibility test.The Benin Disco is one of 11 distribution utilities created from the unbundling of the PHCN, and was slated for sale alongside others under the power reform and privatisation programme.

    Vigeo Power, partly owned by Mr Victor Gbolade Osibodu, had edged out Southern Electricity, promoted by Edo, Delta, Ekiti and Ondo states, to emerge the preferred bidder at the unveiling of the commercial bids submitted by investors.

    But reacting to the allegation of fraud in the bidding process, Peterside, who is also the Chairman of Stanbic/IBTC Bank, said if the losers read and understood the rules of privatisation process, they would realise that rules were followed to the latter.

    He said: “It is sad that in year 2012 that some Nigerians will not go and read the rules before they (losers) rush to make comments. The rules (Request for Proposal) are in 72 pages.

    They should sight which rules were breached.”If they read and understood the rules, they will comprehend that the rules were followed to the latter from the very first day of the transactions. They all took part in a race and the final results have not been announced. So, if they are now faulting the entire process, it shows that something is wrong.”

    Chairman, NESG, Mr Foluso Phillips, who spoke on behalf of the Group, questioned why the governors that lost out are trying to stall the privatisation exercise despite the fact that the bidders were given equal opportunities.

    He said: “We had a bidding process in which everybody participated. If they (the governors) have a problem with the process, the issues should have been raised at the beginning of the process. Why is it that they are now complaining after the process had been concluded?

    “We are not in a military era. I don’t really know what they are complaining about because they already have 30 per cent stake in the project. Nothing should stop the privatisation exercise because the Summit believes in the deregulation of the Nigerian economy.

    The whole economy should be deregulated because government in all aspect has shown that it is not capable of running a commercial entity.

    “See what happened in the telecoms sector. We need deregulation so that the private sector can create good jobs and provide better services.”

    Besides, he said states and the Federal Government should not be allowed to much involved in the power sector because they will not be able to add value.

    “If the states and Federal Government participate, it will be more complicated because they will start fighting themselves over who sits on the board instead of looking at the commercial entity,” he said.

    Frontline financial expert, Mr Bismarck Rewane, also commended the Federal Government for opening up the power sector to private firms.Rewane, who is the Managing Director of Financial Derivatives Company Limited, stated that private owned firms were far better than public owned. “State monopoly is the worst structure in any country. As long as people are paying for what they using, Nigeria will be better off,” he said.

    The BPE and Vigeo Power Limited had also denied the allegation of lack of transparency and incompetence.

    BPE, in a statement, faulted the governors’ position, stating that accusation of a flawed process and irregularities against the privatisation bureau was unfounded and reckless.

    It said: “The bidding process was transparent and we followed the bible of our transaction in doing that. We did not deviate from the norm when dealing with the bidding. I think the governors are bad losers.”The Chief Executive Officer of Global Utilities Management Company (GUMCO), a subsidiary of Vigeo, Mr Abu Ejoor, also said it was wrong to allege that Vigeo does not have experience to run Discos.

    He said Vigeo, which has also been involved in a public sector initiative in the power sector for the past 11 years, has been involved in all the public-private partnership initiatives in the distribution sub-sector starting from revenue cycle management (RCM).

    Ejoor added that his company also installed over 200,000 pre-paid meters in the Benin zone and was in the region managing the process, thus making it the only experienced local player.

     

     

     

     

     

  • Abdulsalami’s group wins Ikeja, Ibadan PHCN firms

    Abdulsalami’s group wins Ikeja, Ibadan PHCN firms

    Fed Govt makes N19.25b from sale of 10 electiricty distribution companies

    Integrated Energy Distribution & Marketing, a firm owned by former Head of State Gen. Abdusalami Abubakar emerged yesterday the core investor of the Eko, Ikeja, Ibadan and Yola electricity distribution companies.

    The Federal Government raked in N197.25billion from the sale of its 60% equity in 10 of the 11 electricity distribution companies (DISCOs) in the unbundled Power Holding Company of Nigeria (PHCN).

    The Chairman of the Technical Committee, National Council on Privatisation (NCP), Mr. Atedo Peterside, broke the news in Abuja during the opening of the commercial bids of the privatisation of PHCN successor distribution companies.

    In the case of Kaduna Distribution company, he noted, “neither of the two bids received was technically qualified”.

    “Therefore, the Bureau of Public Enterprises (BPE) will invite fresh bids from all the pre-qualified bidders, in accordance with the ‘Plan’ approved by the NCP in respect of the privatisation of any unsold successor company. Plan B entails inviting fresh bids from all the shortlisted bidders that paid the required $20,000fee for the bid documents.”

    Peterside, who presided over the bidding, explained that there was an adoption of Aggregate Technical, Commercial and Collection (ATC&C) loss Reduction for the choice of the core investors.

    He added: “I wish to comment on the choice of the ATC&C loss reduction proposal as a basis for core investor selection. The use of this method for the selection of core investors for distribution companies is a clear departure from the NCP’s usual practice of awarding companies to the bidder who makes the highest financial offer to purchase an asset after being technically qualified. Furthermore, ATC&C loss level will provide Nigerian consumers and other stakeholders with specific parameters with which to measure the outcome of the power sector reform and privatisation.”

    Intergrated Energy Distribution & Marketing Limited won the bidding with 22.51% ATC&C. Its closest bidder, KEPCO, offered 21. 43% ATC&C.

    Gen. Abubakar is the chairman, Integrated Energy Distribution & Marketing Limited, which also won the bidding for Eko Distribution Company with 21.43% ATC&C. KEPCO offered 20.43% ATC&C.

    Integrated Energy Distribution Company&Marketing Limited won the bid for Ibadan Distribution Company with 17.46% ATC&C. Western Consortium bidded 14.37%ATC&C.

    The bid for Enugu Distribution Company was won by Interstate Electrics Nigeria Limited, which offered 20.83%. Its only rival Eastern Electric Nigeria (EEN) Limited, offered 15.99% ATC&C.

    Interstate Electric Limited won the bid for Abuja Distribution Company with 21.62%. Its rival KANN Consortium Utility, offered 18.45%.

    Among the companies in the Interstate Electric Limited is Mr. Emeka Offor’s Chrome Group.

    For the Benin Distribution Company, Vigeo Power Consortium won the bid with an offer of 21.78%. Southern Electricity Distribution Company offered 17.72% AT&C.

    Gbolade Osibodu is the promoter of Vigeo group.

    The only bidder for Jos Distribution Company, Aura Energy Limited, won with 16.22% ATC&C.

    Sahelian Power SPV Limited won the bid for Kano Distribution Company with 22.12%. Integrated Power Distribution & Marketing Limited won the bid for Yola Distribution Company with 18.58%.

    In the case of Port-Hacourt, 4Power Consortium emerged core investor, with 19.55%.

    Companies that make up Sahelian Power SPV Limited that won Kano Electricity Distribution Company include Sahelian Energy & Integrated Services Limited; Kayseri Ve Civari Elektrik T.A.S (KCETAS); Dantata Investment and Security Company Limited; Incar Power Limited; and Highland Electricity Limited.

    For Aura Energy Limited, which is the preferred bidders for Jos Electricity Distribution Company, the consortium is made up of Aura Energy Limited and Aydem Elektrik Dagitim A.S. of Turkey.

    The 4Power Consortium, which is the preferred bidder for Port Harcourt Distribution Company has nine companies in the consortium including Taleveras Group of Companies Limited; Lilleker Brothers (Nigeria); Income Electrix Limited/CESC Limited Joint Venture; Skyview Power Technologies Limited; First Independent Power Company Limited; Akwa Ibom Investment and Industrial Promotion Council (AKIIPOC); Paradise Power Nigeria Limited; Bayelsa Electricity Company Limited; and CESC.

    According to Peterside, to qualify to have its commercial bid opened, each bidder was required to furnish, within 15 business days, official notification of its technical qualification, a post-qualification security in the form of a bank guarantee or a letter of credit.

    He noted that for Yola and Jos distribution companies, the post-qualification security required from each bidder is $5million.

    The chairman also noted that bidders for Benin, Eko, Enugu, Ikeja, Kano and Port-Hacourt distribution companies were expected to submit $10million bank guarantee or letter of credit. $15milliin is required for bidders from Abuja and Ibadan distribution companies.

    Continuing, he said “I am very glad to report that many bidding consortia for the distribution companies, whose commercial bids are opened today, include owners and operators of some of the most successful and efficient electricity distribution companies operating elsewhere in the world,” Peterside said, adding:

    “Nigerians should be comforted and pleased to know that it would be difficult to assemble a more qualified group of bidders for our distribution companies today other than the consortia that we have present in this room.“

    Director-General Ms Bolanle Onagoruwa said in the distribution sector, the government focused less proceeds from asset sales, even though it would receive substantial proceeds.

    She said: “We have emphasised the need for preferred bidders to display the ability to immediately bring in investments that will remove the high losers profile of all the 11 distribution companies.”

    The Minister of State for Power, Mr. Darius Ishaka, advised the loser to take advantage of other opportunities in the sector.

    Chairman of the Senate Committee on Privatisation, Senator Gbenga Obadara, noted that the business model of the winners must fit what they bid for.

    “We will not give these companies to incompetent people,” Obadara said.

  • Aba’s $500m power station begins operation Feb.

    Aba’s $500m power station begins operation Feb.

    Barring unforeseen circumstances, the Aba Power Station, the first private indigenous power project in the country, would start operation by February 2013, it was learnt.

    The project, which is the sole initiative of Geometric Power Limited, would provide a reliable electricity supply to Aba, the commercial capital of Abia State and its environs.

    The project, which is being handled by ABB Powerlines, Group Five of South Africa, Pauwels of Belgium, General Electric and Oilserv Nigeria Limited, is planned in three phases and when completed would be generating and distributing about 1000 megawatts (MW) of electricity.

    A gas pipeline, which would be connected to the power plant for supply of gas, is also being constructed.

    Speaking with reporters during a facility tour of the power plant, the Project Manager, Group Five of South Africa, the power plant contractor, Johan Riekert and the Project Manager, Pauwels/EMO Africa in charge of distribution substations, Slobodan Bajkovic and his counterpart in ABB/GEC Powerlines in charge of power lines and poles, said: “We are here to show you phase one of this project. When we came here, Aba had three sub-stations of two numbers of 15MVA transmission transformers. The maximum Aba could get would never have adequately gotten to the people because it did not have enough evacuation structure.

    “We had to build four additional sub-stations to bring it to seven. Power lines were dilapidated and we had to rebuild them. We had to introduce a different kind of poles, the Steel Tubular Poles (STP). It is of two different kinds. The new sub-stations are located at Osisioma, Ogbor Hill, Factory Road and Port Harcourt Road. We are going to refurbish the Power Holding Company of Nigeria (PHCN) sub-station in Omode.

    Riekert said: “Phase one will generate 140mw and Phase one B will generate 47mw. It is just an additional unit of the same type. Phase two will generate 540mw in Alaojie and Phase three will come later and this is expected to bring it up to 1000mw.

    “Each one is a project on its own. The power plant has its own sub-station, which is to transmit power from there. When the project is completed in February 2013, Aba would have a reliable power supply.

    “Phase two is intended to provide assurance that even when the city develops bigger; its power would still be reliable. It will be linked to the national grid, while Phase one is for Aba alone.

    “Aba has been concessioned to this project. The concession is equivalent to privatisation.The customers are within the ring set.”

    On the challenges, he said: “The challenges are not on the project itself. We have gone through the big hurdles. We were doing construction when the financial crises came. We would have abandoned the project if it was not a well conceived one. It is 100 percent private driven project and it is just to show that private investors can provide power and relieve the government of some of its burdens.”

    He explained that Geometric Power is the holding company and that Aba Geometric and APL Electric have been licensed to generate and distribute power.“We have been licensed to generate and distribute power; Aba Geometric is the generating company while APL is the distributing company. It is the first of its kind,” he added.

    On the Geometric Power issue with Assets Management Company of Nigeria (AMCON), he said: “I think people misunderstand what AMCON does. They handle two kinds of debt, the bad debt which is known as toxic debt, which they take over. While it recovers the debt, it allows the bank to operate the company. The second is the performing debt. A bank has an obligable limit. AMCON can take over and reduce it when the bank has passed that limit. Geometric’s debt is a performing debt; it is a percentage of that debt of the bank that was taken.”

  • NIPP: Govt eyes 7000MW generation by 2013

    THE Federal Government said power generation into the national grid would hit 7000 megawatts (MW) by early next year.

    The Managing Director of Niger Delta Power Holding Company (NDPHC), Mr James Olotu, who stated this, said the Nigeria Integrated Power Project (NIPP) has injected over 1,500MW from some of its power plants at Olorunsogo, Omotosho and Alaoji, among others.

    He said more generation is expected from new units of the operational plants and new power plants that would come on stream before the end of the year, adding that generation from the NIPP may hit 3000MW by the end of the year subject to availability of gas.

    Power generation from the generating assets of the Power Holding Company of Nigeria (PHCN) and independent power producers (IPP) currently is above 4,200MW. With the development, the Federal Government is optimistic that power generation will exceed 7000MW by next year.

    The Senior Special Assistant to the President on Public Affairs, Dr. Doyin Okupe, described the NIPP project as a “grand national success,” adding that improvement in gas supply would definitely boost the operations of the power plants.

    Okupe said: “The story of NIPP’s, which in fact, was the first attempt at establishing a Sovereign Wealth Fund, is that of a grand national success, especially following the positive results from the state of emergency declared in the gas sector by the President a few months ago.”

    Okupe said he is optimistic that “by December 2012 with gas production in excess of 500 standards cubic feet, more modules from the NIPP plants will be able to provide much more electricity to the national grid.

  • PHCN stakeholders kick over transfer of N1 billion

    PHCN stakeholders kick over transfer of N1 billion

    Stakeholders in the Power Holding Company of Nigeria Plc (PHCN), are questioning the depletion of the company’s account to the tune of N1billion in the first quarter of this year alone through what they see as curious requests from the supervising ministry- Power.

    They are worried by the frequency of the requests and the true intentions.

    Documents on to the transfer of funds obtained by The Nation revealed that on December 20, 2011, a PHCN executive director and a senior manager, in a memo to the Manager, Access Bank Plc Aminu Kano Street Wuse II, Abuja asked that “the Current Account of our station specified below be funded from our outstanding Debt Account No 0430010004816 with you”.

    They specifically asked that N180 million be transferred to the Federal Ministry of Power (Project) Account in Zenith Bank Plc, Maitama branch and another N50 million transferred to the Industrial Training Fund at Keystone Bank Ltd, Wuse II, Abuja.

    This was preceded by a December 9,2011 transfer of N395, 281, 000 from the company’s outstanding Debt Account

    0430010004816 on 9th December 2011.

    In a letter marked ED-MO-TCN/002-003-1706-2011, the same PHCN executive director and an assistant general manager asked Access Bank Plc, Aminu Kano Street, Wuse II, Abuja to transfer the sum to the Federal Ministry of Power (Project) at Zenith Bank Plc, Maitama branch, Abuja.

    A note attached to the letter suggested that the request was approved by the top management of the ministry.

    The request came via a letter FMP/PPRU/163/VOL.11/6 of December 8, 2011 and was tagged ‘media budget’.

    On January 17, 2012, the executive director wrote to the Head, Public Sector Group, First Bank of Nigeria Plc, Central Business District, Abuja to transfer N200million from the company’s market clearing Account No 2005859094 into the Presidential Task Force on Power ostensibly for the sensitization of the Public on Power Sector Reform .

    Another PHCN executive director and a senior management officer in a June 7, 2012 letter to Diamond Bank, Aminu Kano Street, Wuse II, Abuja requested that N84 million be transferred from PHCN outstanding Debt Account to Federal Ministry of Power (Project).

    The transfer was in response to a June 5, 2012 memo requesting ‘logistic support’ for increased patrol of transmission lines and projects nationwide.

    The memo said in part: “the prevalent vandalism of transmission lines and the increased collapse of towers had often led to the instability in the power supply causing, as it were, frequent system collapses. There is need to nip this trend in the bud and speedily attend to such issues when they arise especially with the coming on board of the National Integrated Power Projects. In order to harvest the gains of these completed projects and to ensure the strengthening of the transmission system, it becomes necessary to patrol these lines more frequently.

    “…In the light of the above, it is recommended that the lines should be constantly patrolled jointly by the officials of the ministry, Transmission Company of Nigeria and security and agencies. In order to provide the necessary logistics support for the period exercises, the following vehicles should be procured: 4 no. SUVs at N21 million each, totalling N84 million.”

    Another N98,985,000 was made available to the ministry on the strength of a presidency approval for the procurement of two treated security vehicles for the minister.

    A director in the ministry asked PHCN to “take necessary action to ensure the prompt release of the sum (N93, 985,000.00) into the ministry’s project Account.

    A source in the ministry informed The Nation that the leadership of the ministry had unfettered access to PHCN’s accounts after the company’s achievement of its target of 4,000 megawatts and the determination of the Jonathan’s administration to privatize it.

     

  • NERC blames lack of cost-effective tariff on PHCN

    NERC blames lack of cost-effective tariff on PHCN

    The Nigerian Electricity Regulatory Commission (NERC), yesterday blamed the absence of cost-reflective tariff in the Nigeria’s Electricity Supply Industry (NESI) on poor consumer service delivery practices amongst distribution companies of the Power Holding Company of Nigeria (PHCN) .

    The Chairman, Dr. Sam Amadi, who made this disclosure in Abuja during the flag-off week-long twinning programme between the Commission and United States National Association of Regulatory Commissioners (NARUC), said utilities service provided in the sector are characterised by poor customer service delivery practices that have resulted in poor customer service delivery practices.

    Utilities in the sector contributed to existing harmful issues militating against the growth in the power sector of the country.

    Amadi said: “One of the real crisis of this sector is lack of customer-centric by utilities. We have received several reports, people are not happy with the tariff, not because it is high, but they are yet to enjoy good service delivery.

    They are complaining about bad billing system even though we have rolled out a methodology to sanitise estimated billing, but the billing is still going on and people are complaining.”

    While admitting that it is better to privatise the power sector, he said it is necessary to develop the capacity to regulate the level of customer service.

    His words: “For us, it is good to privatise and we are happy to be where we are now, but then, you have to prepare to develop capacity to regulate especially at the level of customer service

    “We have had this for a while now and it happens every year. But this year, we are focusing on thematic areas, we want to identify the areas where we have gaps as a regulator and close up on them through the wealth of experience that we can gain from the Michigan Public Service Commission, which is about 100 years old in operation.

    “We are trying to become a world-class regulator and we can only do that by learning from people that have been there for this long.”

    Amadi disclosed that the twinning programme is in its eight edition and it is designed as a vehicle for the exchange of regulatory experience and information between NERC and NARUC.

    He said the officials are expected to share experiences that would further NERC’s institutional and decision-making capacities as regards market-based regulation.