The Federal Government is hopeful that an appreciable number of the electricity generation and distribution companies would have been sold by mid-2011.
A report on the progress of power reforms by the Presidential Task Force on Power, said, “The implementation of reform will continue apace and by mid-2011, appreciable proportion of generating and distribution capacity would have been transferred to private sector hands, while new private generating capacity would have been fully contracted and under procurement.”
The task force said adverts inviting companies to submit Expressions of Interest in taking up 51 per cent stake (or in the concession) of the six generation and 11 distribution successor companies to the Power Holding Company of Nigeria, had been published in the Nigerian and international media.
According to it, interested companies are to submit EOIs by February 18 2011; while shortlisted companies will be invited to submit bids for the successor companies early in second quarter and winning bidders will take over the management of the companies by the end of second quarter of the year.
It said a transaction adviser, CPSC Transcom, was appointed in December 2010 to assist the Bureau of Public Enterprises in undertaking the divestiture transactions.
The task force added, “Meanwhile, the following firms have been invited to submit technical and financial proposals for the management contract of the Transmission Company of Nigeria; Power Grid of India, ESB International of Ireland and Manitoba Hydro of Canada.
“The Nigerian Bulk Electricity Trading Plc was incorporated in July 2010 to address the concern of investors in the generation sector about the credit worthiness of the distribution companies; the NBET will purchase electricity on behalf of the distribution companies until they establish a track record of paying for the power they deliver to consumers by efficiently metering electricity consumers and collecting bills.”
The task force added, “A World Bank Partial Risk Guarantee and a Federal Ministry of Finance Risk Guarantee to compensate against political and other risks and further give confidence to investors are being finalised.
“The risk guarantees will also cover contracts to supply gas to power plants. Already, NBET has commenced negotiations with Nigerian Independent Power Plants to contract new generation capacity for the country, backed by these guarantees.”
On labour issues, it said arrears of monetisation benefits worth N57bn had been paid to PHCN workers.
The task force added that the government had also secured an additional N143bn from the National Assembly as part of the supplementary budget for 2010 to compensate current PHCN workers for the severance of their employment contracts with the government.
It said, “A labour committee chaired by the Minister of Labour, Mr. Chukwuemeka Wogu, has been established by the Presidential Action Committee on Power to ensure that the government fully honours all obligations to current PHCN workers.
“The Nigerian Electricity Liability Management Company will be legally obliged to settle any outstanding liabilities after the PHCN successor companies come under the management of new private sector investors.
“It is worth noting that investors cannot afford to bring in expatriate staff to replace Nigerians, who best understand the system; they will rely on the technical experts currently engaged in the sector to run the companies.”
The report said that in anticipation of the competition and the related need for skilled manpower and expectations of higher levels of performance, which the reform would bring to the sector, the National Assembly had approved the creation of the National Power Training Institute of Nigeria.
It added, “NAPTIN will train existing and new entrants to the sector so as to position Nigerians for the new but more demanding opportunities, and greater investment that private sector management will give rise to.
“The industry currently suffers from a shortage of engineers and other skilled technical staff, a gap which has to be closed to secure maximum benefits from new investment in the power sector. NAPTIN is already fully operational.”
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