By ADEWALE SANYAOLU
In what may be considered a flagrant abuse of an Abuja Federal High Court order directing the Bureau of Public Enterprises (BPE) to maintain status quo in the sale of the N25 billion Kaduna Electricity Distribution Company (Kaduna Disco), the agency yesterday handed over the power utility firm to the preferred bidder, Northwest Power.
The order restraining the, BPE from performing the handover was sequel to the determination of a suit brought before the court by the reserved bidder, Leda Consortium Limited.
The restraining order on BPE which was dated December 2, 2014 was delivered with the received stamp of the office of the Director General of BPE on the same date.
But the DG of BPE, Mr. Benjamin Dikki, confirmed to Daily Sun yesterday that the handover of Kaduna Disco to Northwest Power has been done.
‘’Yes, it is true we have handed over Kaduna Disco to Northwest Power, having satisfied the requirements of the privatisation guidelines as spelt out by BPE. It was not a ceremony done in secrecy because the media provided coverage for the event,’’ he said.
Asked if his action was not a violation of the court injunction restraining BPE from handing the power utility to Northwest Power, Dikki said he was not aware of such injunction.
According to the court order in Suit No. FHC/ABJ/CS/796/2014, a copy of which was made available to Daily Sun and signed by the Registrar, Mrs. Awase Igba, Presiding Judge, A. R. Mohammed, directed the parties to maintain status quo with regard to the subject matter of the suit pending the determination of the defendant’s notice of preliminary objection dated November 24, 2014.
‘‘The court will take the defendant’s notice of preliminary objection together with the substantive suit on December 12, 2014,’’ the court order to BPE said.
Recall that the sale of Kaduna Disco has been a subject of controversy following the inability of the preferred bidder, Northwest Power, to pay the outstanding 75 per cent of the bid sum.
Kaduna Disco and Afam Genco are the remaining two successor companies out of 17 carved out of the defunct Power Holding Company of Nigeria (PHCN) whose sale had suffered deferments ow-ing to technical hitches as none of the preferred bidders met the technical requirement of the privatisation regulating agency.
According to the privatisa-tion guidelines, failure by a preferred bidder to discharge its payment obligation before the stipulated deadline amounts to automatic forfeiture of its 25 per cent initial payment and the right to buy the asset shifts to the reserved bidder.
Section 15 (138) of the Re-quest for Proposals (RFP) for the Privatisation of PHCN Successor Companies states: “The designated preferred bid-der will be invited for negotia-tions with BPE. Failure to enter into negotiation will result in the forfeiture of the preferred bidder’s bank guarantee, and BPE will invite the first (1st) reserve bidder for negotiation.” The BPE had last year offered the Kaduna Disco for sale to a private investor for a bid sum of $163 million (about N25 billion).
Northwest Power Limited, the preferred bidder for Kaduna Disco, had till August 6, 2014 to make the 75 per cent balance payment of N19 billion ($123.750.00) for Kaduna Electricity Distribution Company (Disco) or risk losing the mandatory 25 per cent – N19 billion ($39.250.00) initial deposit for the acquisition of the asset.
Prior to the August 6, 2014 deadline, the company had until June 23, 2014 to make the 75 per cent balance payment having signed the Share Purchase Agreement (SPA) with BPE in December last year.
Section 14.3 (137) of the Request for Proposals (RFP) for the Privatisation of PHCN Successor Companies, states: “The second (2nd) ranked bidder will be required to maintain both its bid bond and post-qualification security valid for the duration of the proposal validity period or the extended proposal validity period that the bidder has agreed to in order to maintain its status as the first (1st) reserved bidder.
Furthermore, Section 15 (140) stipulates that, “within six (6) months after signing of the Share Sale Agreement, or at a mutually agreed upon time, the bidder will be required to pay the outstanding 75 per cent of the share purchase price to complete the transaction. Failure to complete the transaction within a mutually agreed timeframe will result in the forfeiture of the down payment as per the terms of the Share Sale Agreement.”
Section 15 (139) of the RFP for the Privatisation of PHCN Successor Companies stipulates: “Within fifteen (15) business days after signing of the Share Sale Agreement, or at a mutually agreed earlier time, the bidder shall make a down payment of 25 per cent of the share purchase price.
“Failure to make this payment will result in the automatic drawdown of the full amount of coverage of the preferred bidder’s bank guarantee. Upon receipt of the down payment, the preferred bidder’s bank guarantee will be returned to the bidder within a maximum of two (2) weeks.”
Source : SunOnline