Oando Consortium HoneyWell Energy Resources International Ltd however failed to meet up as their bids ranked lowest for the different three DISCOs they bided for.
The other companies which also emerged tops during the opening of the financial bids for the PHCN successor distribution companies held yesterday in Abuja, include Aura Energy Ltd, 4Power Consortium, as well as Sahelian Power SPV Ltd,
Chairman of the Technical Committee of the National Council on Privatisation, (NCP), Atedo Peterside, said the NCP adopted Aggregate Technical, Commercial and Collection (ATC&C) loss reduction method for the selection of core investors for the distribution companies because it would provide Nigerian consumers and other stakeholders with specific parameters with which to measure the outcome of the power sector reform and privatisation.
The result of the bid showed that Integrated Energy, which was the sole bidder for the Yola DISCO with 18.58 per cent, also emerged tops in its bids for Eko and Ikeja DISCOs scoring 21.43 per cent and 22.51 per cent respectively, while Interstate Electronics came top in the bids for Abuja and Enugu DISCOs with 18.43 per cent and 20.83 per cent respectively.
The other companies are Aura Energy Ltd with 16.22 per cent for Jos Disco, Sahelian Power SPV Ltd with 21.21 per cent for Kano Disco, 4Power Consortium with 19.555 per cent for Port Harcourt Disco and Vigeo Power Consortium with 21.78 per cent for Benin Disco.
From the bottom, Oando Consortium, lagged behind with 14.29 per cent for Eko and Ikeja DISCOs respectively, while HoneyWell Energy scored 16.25 per cent and 16.33 per cent for Ikeja and Eko DISCOs respectively thus failing to clinch the top position.
The percentages are Loss deduction estimates which are supposed to be passed back to the consumers so that the person offering the highest percentage loss reduction will pass back the best package to consumers because he will automatically translate into the one that will pass the highest discount to consumers.
The bid for Kaduna Disco was not opened as none of the two bids received was technically qualified. The Federal Government is expected to realise N197.25billion as total proceeds from the sale of 60 per cent of the 10 DISCOs being offered for sale.
Peterside said everything will be collated and “we will carry out some tests for consistency and then the result will be announced very soon by the NCP and that ends the process.
“Evaluation process will be carried out by relevant agencies and coordinated by BPE, the result of which will be submitted to NCP for appropriate decision making in accordance with the provisions of the RFP. They will be subjected to consistency tests and divided into two categories: bids in which ATC&C loss reduction proposal is less than 50 per cent and those where it is 50 per cent or more.
“Bidders in the second category will be subjected to a further review, while where there is only one bidder who has passed the Consistency Tests, the 50 per cent rule does not apply. All bidders will be ranked to aid NCP to decide according to the provisions of RFP” Peterside said.
At the end of the exercise, Integrated Energy Distribution and marketing Limited, had emerged tops in four Discos, but they would have to forgo two of them and the two preferred by them must not include both Ikeja and Eko Discos.
This is so because Part C, Step 11 of the Ground rules for the commercial bid states that a bidder is not allowed to win more than two Discos, and in addition, no bidder is allowed to win both Eko and Ikeja Discos in accordance with the requests for proposals.
“The rules are very clear, here there is something called order of preference, if someone wins two things that he will not be allowed to pay for, he would be given the option of choosing the one that he would prefer” Peterside explained.
Peterside in his address said following the evaluation of the applications, 80 bidders were short listed and at the deadline for the payment of data room access fees, 72 out of the 80 short listed bidders each paid the mandatory $20,000 fee to purchase the Request for Proposal, RFP, have access to the data room and proceeded to the next stage of the transaction and were subsequently referred to by the Bureau for Public Enterprise, BPE as pre-qualified bidders.
“By the submission deadline of 5pm on 31st July 2012, the BPE received 54 proposals from pre-qualified bidders and out of the number, they evaluated and 10 of the bids failed the first test of completeness and responsiveness. The remaining 44 bids were then subjected to full technical evaluation and 32 submitted by different bidders scored the minimum of 75 per cent that was required to progress to the next stage in the process
“The bidders that scored 75 per cent and above and who were asked to submit the post-qualification bidders guarantee following the approval of the evaluation results by the NCP as the 20 that are bidding for the 10 Discos” Peterside stated.
In her remarks, Director General of BPE, Bolanle Onagoruwa said in designing the model for the selection of the preferred bidder, BPE took into consideration the fact that the current ATC&T losses sustained by the various distribution companies are estimated at between 35 and 40 per cent of the power wheeled to them adding that this level of loss is unsustainable, and if not halted will continue to make the Nigerian Electricity Supply industry absolutely unviable for full and unsubsidised private sector participation.
Onagoruwa said this privatisation strategy is built around the Multi Year Tariff Order, MYTO 2 issued by the Nigeria Electricity Regulatory Commission, NERC, which essentially sets out the commercial and economic indices that provide the financial model for the entire sector.
“MYTO 2 stipulates the annual investment requirement, allowable operational expenditure, approved rate of return on equity and other allowable expenses for each distribution companies. In addition, the valuation of the distribution companies regulated asset base, as determined by NERC, is the basis for the equity payments to be paid by the preferred bidder for each company” Onagoruwa stated.
SOURCE: 17 October 2012.
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