The failure of President Muhammadu Buhari to constitute the Federal Executive Council is stalling the conclusion of the sale of Afam Power Plc and the Yola Electricity Distribution Company, an investigation has shown.
Members of the National Council on Privatisation which has the statutory role to approve the sale of the companies whose technical and financial bids have been concluded are drawn from the Federal Executive Council.
Traditionally, the Minister of Finance is the Vice-Chairman of the council which is chaired by the Vice-President, Prof Yemi Osinbanjo. Some other members of the cabinet which has yet to be constituted by the President are members of the council.
It was reported that the Technical Committee of the NCP had approved the N124.3bn bids for Afam Power Plc and Yola Electricity Distribution Company but the process could not proceed because the NCP could not sit without forming a quorum.
At the financial bids opening for the two power companies in April, Transcorp Power Consortium had emerged the bid winner for 100 per cent equity in Afam Power Plc with an offer of N105.3bn.
Similarly, Quest Electricity won the bid for 60 per cent equity in Yola Electricity Distribution Plc with a bid of N19bn.
Both the management committee of the Bureau of Public Enterprises and the Technical Committee of NCP had reviewed and approved the transactions before the transactions were passed on to the NCP.
It was learnt that the privatisation agency had written the NCP but had not been able to get any reply because the NCP could not sit before the cabinet was dissolved preparatory to the swearing-in of Buhari for a second tenure which began on May 29.
It is after the approval of NCP that BPE can invite the prospective core investors to sign Share Purchase Agreements with them. Although NCP usually follows the advice of BPE, it also has the power to cancel any transaction.
At the bid opening in Abuja, Diamond Stripes Consortium was declared the reserve bidder for Afam Power Plc with a bid of N102.39bn while Unicorn Power Generation Consortium came third with a bid of N101.05bn.
The bidding for Afam closed in the second round. At the first round of bidding, Unicorn had emerged the highest bidder with a bid of N100.45bn; Transcorp submitted a bid of N89.37bn while Diamond put in a bid of N72.73bn.
It was when the potential investors were asked to reverse their bids for a second round that Transcorp Power Consortium which already operates the Ugheli Power Plant threw in the highest bid of N105.3bn.
On the other hand, Quest Electricity Nigeria Limited, which was the sole bidder for Yola Electricity Distribution Company submitted an initial bid of N17.67bn.
However, the company reversed its bid at the second round when it was told that its bid did not meet the reserve price set by the National Council on Privatisation.
The privatisation of Afam Electricity Generation Company could not be concluded during the first round of privatisation of electricity companies in 2013 due to issues stemming from gas supply to the plant.
For the YEDC, although it was successfully privatised and handed over to the core investor in 2013, a force majeure was declared in 2015 by the core investor, citing insecurity in the North-East region of the country. Consequently, the company was repossessed by the Federal Government.