Uncertainty Looms over Power Assets Sale after Onagoruwa’s Sack

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Ms. Bolanle Onagoruwa

Nigeria’s privatisation of state-owned companies faces uncertainty after the head of the Bureau of Public Enterprises (BPE) was fired with key sales yet to be concluded, the Financial Derivatives Company Limited (FDC) told Bloomberg Wednesday.

The Federal Government Tuesday sacked the Director General of the BPE, Ms. Bolanle Onagoruwa, as well as Dr. Bashir Gwandu as the Executive Commissioner in charge of the Engineering and Technology Standards in the Nigerian Communications Commission (NCC).
Although no reason was given for her removal, THISDAY learnt that it might not be unconnected with the call by the Senate for her removal several months ago.

The federal government directed the most senior director in the BPE, Mr. Benjamin Ezra Dikki, to take over the affairs of the privatisation agency in an acting capacity.

“It is a curious development in terms of the timing and very disturbing from an investor perspective,” Bloomberg quoted the Managing Director/Chief Executive Officer, FDC, Mr. Bismarck Rewane, to have said.
Rewane, who spoke from Lagos, added: “It is a major setback and would make international investors more wary.”

The National Council on Privatisation (NCP) has announced the preferred bidders for the five generating and 11 distribution companies. The bidders are now expected to submit letters of credit and bank guarantees from ‘A’-rated banks.

The country is selling majority stakes in power plants and letting private investors buy as much as 60 per cent of the 11 distribution companies spun out of the former state-owned utility as it seeks private investment to curb power shortages. This is to address the country’s perennial epileptic power supply.

Demand for electricity in Nigeria is almost double the supply of about 4,000 megawatts and the government plans to boost output to 14,019 megawatts by 2013.

Bids from companies including Siemens AG (SIE) and Korea Electric Power Corp. (015760) for 10 state-owned power distribution companies were approved by the National Council on Privatization headed by the vice president on Oct. 29. Buyers are required to provide bank guarantees for 15 per cent of the price within 15 days and complete payment within six months.
Earlier this year, the Senate had adopted the report of its Ad Hoc Committee on Privatisation and Commercialisation, which had recommended that Onagoruwa be relieved of her position for alleged gross incompetence, and the illegal and fraudulent sale of the five per cent of federal government’s shares in Eleme Petrochemicals Company Limited.

Similarly, the House of Representatives also prevailed on President Goodluck Jonathan to sack Onagoruwa. The demand for her sack by both chambers was predicated on the wholesome adoption of the recommendations of the Senate committee that had investigated the sale of public enterprises through the privatisation programme since 1999.



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