The federal government yesterday gave out 70 per cent of Egbin power plant in Lagos to a Korean firm, KEPCO, for sale at the rate of $407.3 million.

This is just as Forte Oil, a partner of Amperium consortium, also confirmed that it had paid $33m (local component of N519.12 million inclusive), being 25 per cent down payment for acquiring 51 per cent of Geregu power plant, into the National Council on Privatisation’s (NCP) account.

Chairman of the Technical Committee of NCP Atedo Peterside who gave the hint of the sale of Egbin power plant after a meeting of the council chaired by Vice-president Namadi Sambo at the presidential villa, Abuja, received a confirmation of the 25 per cent payment made by Forte Oil for Geregu power plant from its chief executive officer (CEO), Akin Akinfetiwa, in the presence of State House correspondents.

Briefing journalists alongside minister of communication technology Mrs Mobolaji Johnson and acting director-general of the Bureau of Public Enterprises (BPE), Mr Benjamin Dikki, Peterside said NCP also approved the sale of Omotosho and Olorunsogo power plants to the Chinese firm that was building them.

Noting that the Chinese firm was offered the right of first refusal for the plants worth $166 million, he added that government reached a pact with the firm to acquire 51 per cent stake on completion.

The NCP had, last week, signed an agreement with the preferred bidders to take over 10 distribution companies (DISCOs) and five generation companies (GENCOs).

Noting that only Afam power plant and Kaduna distribution company were still left to be sold, Peterside said the Geregu plant is currently valued at over $600 million, more than the $549 million it was valued at in 2007 when the federal government began negotiations to sell only 51 per cent equity of the plant to the same firm.

The Nigerian partners of the Korean company, Sahara Oil and Gas, are the same company that bought the Ikeja Power distribution company.

A source familiar with the transaction told LEADERSHIP that the Egbin plant was sold without a bidding process.

He said, “The company had initially bought the plant during the government of former President Olusegun Obasanjo. But in 2007 when Umaru Yar’Adua came into office and cancelled the contracts of public companies that were sold to primates investors, the government did not return the money paid by the Korean firm.”

He said, “What the government has now done is to re-evaluate the previous contact and the present cost of the Egbin power plant. What was initially paid was not as much as $407million.”

Also penciled in for sale to the Chinese firm, which has almost completed their construction, are Omotosho (Ondo State) and Olorunsogo (Ogun State).

Peterside said NCP’s offer of the plants on right of first refusal to the Chinese firm was the best because they would naturally understand the plants better and had agreed to a sale price the council considered reasonable enough.

He said the plants were offered for $166m, just as he pointed out that, except for Afam plant, “every other power plant owned by PHCN now has a core investor”.


Forte oil pays $33m for Geregu power plant

Forte Oil, which was given 15 days’ grace, however, paid the purchase sum of $33m immediately at the end of the meeting after the approval was granted.

NCP also considered the report of the progress being made by the attorney-general of the federation on arbitration which was delaying the privatisation of the Ajaokuta steel plant and Aluminium Smelter Company of Nigeria (ALSCON).

Minister of Mines and Steel Development, Sani Sada, who disclosed this, said the parties engaged in the dispute had in their initial meeting tried to settle out of court, adding that some useful discussions to take the resolution further were ongoing.

He said, “We are beginning to see that very soon we are likely to conclude some of those issues, such that BPE will take full charge of these two important facilities, and they are appropriately privatised, not the way it happened before that is now putting us into these issues.

“This time, it will be in such a way that they will come back to contribute the way that they are expected to as major industrial backbone of the Nigerian economy.”

The NCP also approved the Nigerian Postal Service (NIPOST) Reform draft bill which will soon be forwarded to the Federal Executive Council for onward transmission to the National Assembly for necessary legislation.

The minister of communication technology, Mrs Mobolaji Johnson, noted that, with the reform, NIPOST will only focus on commercial operation while a regulatory body will be set up for the sector.

Acting director-general of the Bureau of Public Enterprises (BPE), Mr Benjamin Dikki, said the council considered five draft bills for the transport sector. They are on port, road sector, inland waterways, railway and transport commission. The draft bills will be sent to the Federal Executive Council for consideration and onward transmission to the National Assembly.

But the two functions will be separated as a postal commission will be created to act as the regulator.

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