As the privatisation of the 10 National Integrated Power Plants (NIPPs) enters into full swing, Managing Director of the Niger Delta Power Holding Company Ltd (NDPHC), Mr James Olotu, has guaranteed the integrity of the process. In this interview with JULIET ALOHAN, he explains the checks put in place to ensure that the process also does not compromise the integrity of the already concluded PHCN transaction.
Sixty- six companies bidded and 66 were opened, there was no immediate disqualification. One of the reasons for immediate disqualification would be that one of the important items is not there and then you immediately disqualify that company but, most of them met the primary objectives and so we now go for the proper evaluation stage.
They have been set up and have started working. They will work for a minimum of two weeks, if they need more time, we will give them, but the target is a minimum of two weeks they will be doing the evaluation. The parameters for what we are looking for they all know, and basically, the financial adviser had mentioned that earlier. The committee will be looking at three things. One is the competence of these companies to be able to operate and manage successfully a power plant of the capacity that they are vying for. That is one, and Nigeria will naturally not want to give a power plant to someone who doesn’t have that competence to manage it otherwise they will just come in, strip the plant, sell it and run away and the country will be short- changed and we don’t want that. The second point is to ensure that they have the financial capability to actually invest. Some people will claim they have money but when the time comes to pay, they cannot pay.
So we want to make sure from the beginning that they have the financial strength to be able to pay for the plant of their choice. And lastly, to ensure that the consortium is a good one.You know sometimes, one company may not be the only person in the team, you may have two, three, four or five consortium members. We want to make sure that the consortium is actually a good consortium, not one that will fall apart half way through the process. What we want to make sure is that when you privatise, it must be for something better than it was before otherwise it does not make any sense to do so. So we are ensuring that during the whole process, we put these things at the back of our mind before we announce who is the preferred bidder of any particular power plant. So I am satisfied that we are making progress in the right direction.
It has been mentioned that owners of PHCN successor companies will have to meet other conditions to be eligible to buy the NIPP plants; can you explain the reason for this extra condition?
Look at it this way, a company bids for one of the power generation plant, in our guideline, you must have a net worth of certain amount of money ranging between $100 million to $250 million. Now if a man has already won a power plant before or a distribution company and is now attempting to win another one, it is allowed under the guideline but, we want to make sure that the promises and the conditions for winning the first one are not in any way compromised. Because the last phase transactions was with the old power plants, now these old plants we are not going to throw them away, we want them to be reactivated , to be brought back to life to the capacities they were before or even expanded to bigger capacities. So, if a man now agrees that he was going to bring the plant to the capacities they were supposed to be, and suddenly, the man now wins this new power plant, he abandons the old one and the money he was supposed to invest in that area, he diverts it to the new one, that is short-changing Nigeria and we do not want that.
So we want to make sure that first, the person has the financial capability that he claimed he had before he was declared the preferred winner of the first transaction. We don’t want to sell a new power plant to somebody who will lose interest in the old power plant he has won. This is just to ensure the integrity of the whole process.
It appears that the same people who won the PHCN transaction are also the ones showing interest in the NIPPs?
When we started our process, the advertisement was to the entire world, it was not to just people who won PHCN transaction, it was to the entire world. The entire world was free to come and invest. If it so happens that some people in the entire world felt that maybe Nigeria is not very serious and they left and it is only the people who won in the PHCN transaction who are also showing interest , there is nothing wrong with that . The bottom line is that we were very transparent; we made the advertisement to the entire world. We invited everybody, I went with my people to London, to New York, to Hong Kong, to Lagos, just to shore up support and raise the interest of people.
We were not just targeting those people, who won the first transaction, no, we are targeting the whole world. So if this exercise produces a few who were winners of the first transaction, why not, as long as we are sure that what I mentioned earlier is taken care of, and that is that the integrity of the first transaction is not compromised by this transaction.
Ordinarily we have followed a very rigid timeline, we are hoping that by January ending, we should announce the preferred bidder, not necessarily approval, but announce. You know when you do financial bid opening on that day, ordinarily you should know who bid the highest, who came second who came third. The process is so transparent, we are involving the Economic and Financial Crimes Commission (EFCC), we are involving the State Security Service (SSS), we are involving everybody that is relevant. The reason is that some people may claim in the bid paper that they have ‘X’ on paper when they do not have it, so there is a process for revalidating those things that they claim they have just to be sure that they have it. So if for instance, a man who ordinarily has gotten his technical appraisal done and is declared to have won the technical bid, something came up later to say that there is a doubt as to the integrity of what he has on papers of course naturally,it must be cancelled. It does not matter at what stage, the important thing is to make sure that whatever they submitted is a declaration of the whole truth and nothing but the truth.