PHCN Staff Payoff Delays Payment For Power Firms

Unless the PHCN labour issues are resolved amicably, payment of the 75 per cent outstanding obligation for the privatised distribution and generation companies by their core investors would suffer a major setback.

This is even as Taleveras Group and Nortwest Power Limited yesterday emerged the preferred bidders for the Afam Power Plc and Kaduna Distribution Company, the two power companies that were not privatised along with the 15 others last year.  The bids are however subject to final approval from the National Council on Privatisation chaired by Vice-president Namadi Sambo.

Source reveal that though many of the core investors would have wanted to pay up the outstanding sum, none of them is willing to take the final plunge while issues with labour have not yet been resolved.

The minister of power, Professor Chinedu Nebo, had earlier said that some of the power companies would be handed over to their core investors in July following full payment of the balance money, source reliably gathered that so far no core investor has paid the balance.

Director-general of the Bureau of Public Enterprises Benjamin Dikki, who confirmed this yesterday, however, gave the assurance that there would be no further delay as virtually all the labour issues have been resolved.

Speaking during the official opening of Commercial/Financial for Afam Power Plc and Kaduna Distribution Company yesterday, Dikki said, “Many of the core investors had actually indicated interest to pay the 75 per cent before the deadline because they wanted to take over the companies before the September deadline for payment. But they insisted that the labour issues must be fully resolved first before they make the payment. We have virtually resolved all the issues with labour. It is now the question of commencement of payment and I want to assure you that before the end of this week or early next week workers of PHCN will begin to receive alerts.”

Upon opening the financial bids for the two power companies, Taleveras Group – a consortium of France, British West Indies and Nigerian companies - emerged the preferred bidder for Afam Power Plc with a bid price of $260.05 million while TES Power Limited, a consortium of Chinese, German, Spanish, Saudi Arabian and Nigerian companies, was reserved bidders with bid price of $222.9 million.

For Kaduna Distribution Company, Nortwest Power Limited, a consortium of 10 Nigerian companies, emerged the preferred bidder offering the highest aggregate technical commercial and collection loss reduction (ATC &C) figure of 29.26 per cent while LEDA Consortium Limited, made up of six Nigerian companies, was reserved bidder with ATC&C of 26.71 per cent.

The remaining four bidders for Kaduna Disco namely Axis Power Distribution Limited, NAHCO Consortium, INCAR Consortium, and Copper Belt Consortium Ltd had ATC&C figures of 17.40 per cent, 22.83 per cent, 22.75 per cent and 21.07 per cent respectively.

Chairman of the Technical Committee of the NCP Mr Atedo Peterside, who explained the bid process, stated that out of the 20 that met the deadline for submission of technical and financial proposals, only eight bidders – two for Afam and six for Kaduna Disco – attained the 75 per cent minimum score and also submitted post-qualification security.

According to him, the NCP headed by Vice-president Sambo will ratify the bid results and give approvals before the winners can be announced.

Explaining how the ATC&C works, Petwerside said that the bidders for Kaduna Disco were not competing on price; rather they competed on percentage of loss reduction, efficiency gain. “Which means that the person with the highest ATC&C is saying that if you make me the winner, when I come in I’m going to reduce the loss in power so that there will be more to distribute to the end users. As you know, almost half of the power that the country generates is lost between transmission and distribution. So they are competing on efficiency gains.  But for Afam they are competing on price because they are buying an asset; so that is the difference,” Peterside explained.

August 01, 2013