
The power brokers behind the delay in the take-off of the $530 million Aba
power plant have demonstrated what industry sources describe as greed and
short-shortsightedness capable of jeopardising ongoing reforms in the power
sector.
They include Emeka Offor, major promoter of Interstate Electrics Limited,
new owners of Enugu Electricity Distribution Company (Enugu Disco); Namadi
Sambo, Nigeria’s vice president; Sam Amadi, executive chairman, Nigerian
Electricity Regulatory Commission (NERC), and Benjamin Dikki, director-general,
Bureau of Public Enterprises (BPE).
Informed sources say these individuals, through deliberate or inadvertent
‘administrative errors’, complicated the issue of the Aba ring-fenced areas.
Geometric has been licensed to deliver power supply to Aba and Ariaria
business units, just two out of 18 business units in the Enugu Disco licence
areas. Emeka Offor is a government contractor and leading donor to the ruling
People’s Democratic Party (PDP). Offor’s Interstate Electrics controls the
remaining 16 units, which include bigger units like Onitsha, Nnewi, Awka,
Owerri and Umuahia.
“Legally, Interstate has no standing in wanting to lay claim to Aba and
Ariaria. Economically, it has a bigger cake, as it manages 16 business units.
It is just a show of greed and short-sightedness on the part of Interstate,”
said a source who stated that Offor’s connection to the vice president was beclouding
him.
It would be recalled that following the resignation of Bart Nnaji as
minister of power, BusinessDay had in its August 29, 2012 edition reported that
the vice president’s deputy chief of staff, Mohammed Kachalla, had been
mounting pressure on senior staff of the BPE with a view to influencing the
privatisation process of the power sector. It was believed that the scheming
was meant to weaken the solid controls put in place by the BPE and the
Technical Committee on Privatisation, to ensure that bids were evaluated fairly
and transparently.
BusinessDay had last year reported attempts by the Vice President Sambo-led
National Council on Privatisation (NCP) to bend the rules of the privatisation
of the Power Holding Company of Nigeria (PHCN) successor companies, when
Interstate Electrics failed to meet the August 21 deadline for the payment
of the remaining 75 percent of the bid value.
The company was said to have lobbied the NCP and BPE to get them to grant it
an extension to pay for the asset, for which industry analysts said there was
no moral justification, when similarly some investors were shut out at the
preliminary stages in the same circumstances.
According to knowledgeable sources, the vice president has vested interests
in Interstate Electrics, and “that is why they have always wanted Interstate
Electrics to end up buying Enugu Disco. Until it got to Interstate Electric’s
inability to make any payment at the August 21, 2013 deadline, the NCP and the
BPE did not allow any exception. Even when Dangote was few minutes late in
submitting its bid for Geregu and Shiroro, it was disqualified.”
In November 2012, the vice president had, through a memo, directed the BPE
headed by Bola Onagoruwa to disregard the 2014 Memorandum of Understanding with
Geometric Power, and the 2005 and 2006 lease agreements which ring-fenced Aba
and Ariaria business units in favour of Geometric, but because she insisted
that the contract should be honoured, she was asked to quit ‘with immediate
effect’ on November 27, 2013, a development analysts described as curious in
terms of the timing and very disturbing from an investor perspective.
Stakeholders had expected the NCP and the BPE to call in immediately the
reserve bidder to make its pitch on the Enugu Disco. The BPE, in a statement, had noted that the deadline for payment remained
Wednesday, August 21, 2013 as stipulated in the Request for Proposal (RFP),
adding that in compliance with the tenets of transparency and accountability,
the bureau would continue to strictly abide by the terms and conditions in the
RFP.
The eventual extension given to Interstate was said to have pitched the
chairman, Technical Committee, NCP, Atedo Peterside, against the
director-general of the BPE, as the extension would not only undermine the
integrity of the transaction and the NCP, but would also translate into a
financial discount to the preferred bidder.
According to the peace committee of the NCP, the BPE indicated that Aba
ring-fenced was encumbered, yet it included Aba in its bid for the
privatisation of the PHCN successor companies. The BPE did not remove the bid
value of the Aba ring-fenced area. The committee also noted that NERC did not deduct the value of Aba
ring-fenced from the valuation of Enugu Disco even though NERC was aware that
Aba was ring-fenced and licensed to Aba Power Limited.
The Amadi-led NERC has said, though belatedly, that the right thing should
be done, after a site visit to Aba Power Electric Limited and Geometric Power
Aba Limited.
In a report submitted by NERC, seen by BusinessDay, the commission concluded
that from the infrastructure already on ground at the generation plant, the
distribution substations and lines, the GPAL and APL had gone a long way to
meet their own end of the tripartite agreement. “It will be a disservice to the country in general and the company (GPAL and
APL) in particular, after investing such huge amount of money on power
infrastructure of such magnitude, to be denied the terms of the tripartite
agreement.
A disregard of the agreement will cast bad light on the Federal
Government’s privatisation process and send a wrong signal to other prospective
investors in the power sector,” NERC said in its recommendation, adding that
the tripartite agreement between Geometric, FG and PHCN should be upheld and
made effective by excising the former Aba business unit from Enugu Disco
licence areas. Sources close to the presidency tell us that the actions of the
vice president in this Geometric power affair are unbecoming of his office.
“The vice president is acting like a common
contractor,” said the source. “Instead of leveraging his considerable powers to
win the hearts of the people of the South East for the president, by allowing
Geometric Power to proceed with lighting up Aba, he chooses to be in cahoots
with Emeka Offor to deprive the Igbo of electricity for their
greatest industrial city.”