Nigeria Sells All Ten Newly Built Power Plants To Private Investors

 

With the recent offer for sale of 10 new power-generation stations built by the three tiers of government through the Niger Delta Power Holding Company Limited (NDPHC), the implementation of the Electric Power Sector Reforms Act of 2005 is at a critical juncture.

The stations, which have a combined design capacity in excess of 5,453 megawatts, are Alaoji Power Plant, Aba, Abia State; Ihovbor Power Plant, Benin City, Edo State; Calabar Power Plant, Calabar, Cross River State; Egbema Power Plant, Owerri, Imo State; Gbarain Power Plant, Yenagoa, Bayelsa State; Geregu II, Ajaokuta, Kogi State; Sapele II, Sapele, Delta State; Olorunsogo II, Olorunsogo, Ogun State; Omoku II, Port Harcourt, Rivers State; and Omotosho II, Okitipupa, Ondo State.

The country has spent over $8 billion building these plants and is expected to make $6 billion from divesting
80 per cent of governments' shares in them. Expression of interest (EoI) for the facilities closed by 5pm on Friday, July 19, 2013, and 110 private companies beat the deadline. According to the divestment time-table, the Bureau of Public Enterprises (BPE) will announce a shortlist of successful bidders on August 8, 2013, and the stations would be transferred to the highest bidders between June and July 2014.

We note, with cautious satisfaction, government's firm rebuff of laggard would-be investors who waited till the EoI deadline expired before making bids. Government must build on this initial principled stand all the way in the process and avoid embarrassing blunders which trailed previous sales of public entities like NITEL/MTEL and the recent unbundling of the Power Holding Company of Nigeria (PHCN). The thermal plants must not be sold to incompetent or briefcase investors. Government must allow best global practices to prevail in the divestment process and demonstrate iron-clad will to stop scavenger-politicians from using proxies to acquire the plants.

Whenever a breach of due process is noticed, the National Council on Privatisation (NCP) must act fast by cancelling the tainted bids. Timelines must be well handled and this exercise must not, for any reason, be allowed to go beyond the June 2014 date for the new owners to take possession of the plants and give Nigerians the much-sought stable power supply. The government should refrain from shifting the goal-post and changing the rules of the game. Since foreign development partners cum private investors are involved in the bidding process, government should strive to sustain their confidence and not do anything capable of putting the country to shame.

After successfully selling the power stations, government should plough the proceeds back into expanding the country's power infrastructure, specifically building a number of hydropower dams across northern Nigeria as provisioned under Phase II of the National Integrated Power Projects (NIPP). The money must not vanish into government's infamous black holes of graft.