Stakeholders pick holes in FG’s attempt to sale Yola Disco, Afam plant

Stakeholders in the power sector have said it is improper for the federal government to put Yola Electric Distribution Company up for sale, given that it is performing better than most of the other Discos that are privatised.

They wondered if the real value of the Disco would be realised if it is sold now in view of the fact that the circumstances that made the core investor to return the Disco back to the government which is insecurity is still very much prevalent.

They also frowned at the situation in which the government is yet to refund the core investors, Integrated Energy and Distribution Marketing Company, (IEDM) the $80.5 million which was the value negotiated after the return of the company and is putting it   put for sale.

A former managing director of Ikeja electric said: “It is crazy to want to sell Yola Disco now considering the performance of the sold ones. Presently Yola is performing better than most Discos despite the fact that it is still being run by civil servants. If the government had given the old management a third of the over N1 trillion Naira intervention fund it has pumped into the system since privatisation could country would have been singing a different song.”

Another executive director of one of the Discos queried the rationale behind the government selling the asset while she still owing the former core investors and described the action of the government capable causing disincentive to other investors.

“Whoever wants to buy the asset must be seeing what others are not seeing, I only hope that they do proper due diligent before throwing themselves into it,” he said.

According to some others that spoke to by BusinessDay, they said the Boko Haram insurgency is big challenge to any investor as its seems intensified even though the government claimed that the group has been technically defeated. They also cited the problems of the Fulani herdsmen another major factor threatening investments in that region.

The fulanis herdsmen problem has led to displacement of a number of people in Taraba and Adamawa States which were considered as relatively peaceful before now. They said it would be difficult for any investor to want stake his money on the company given the level of uncertainty prevailing in the areas covered by the distribution company.

Efforts to get the reaction Bureau for Public Enterprise on the views expressed by stakeholders, especially on why the refund of N80.5 million the former core investor is being delayed was not successful.

A source close to the  power industry said  document relating to the refund of the money has been on the table of the Minister of Finance, Kemi Adeosun for several months now but she has refused to act on the documents to facilitate payment.

An executive of a multinational company operating in the country who also commented on the sales of Afam Power GenerationPlant, said it would been better for the plant  to be rehabilitated so that it could attract additional value before it is sold.

“But it is the government and it knows better”, he said

Amina Othman, Head, Public Communications for BPE has since last week Friday when questions were sent for BPE’s reaction on why the agency has not paid the core investor,  promised to get back to BusinessDay but  has failed up till the time this report was made.

Instead the BPE came out with a press release stating that Alex Okoh, director general of the agency  has reiterated the resolve of the Bureau not to compromise on transparency and integrity in the sale and management of public assets in the country.

He stated this at the joint kick-off meeting of the transaction advisers for the privatisation of Afam Power Generation Plant and Yola Power Distribution Company in Abuja. He also said the Bureau had raised the bar for privatisation transactions, and maintained that stakeholders would be carried along throughout the entire stages of the transactions.

On the emergence of FBN Quest Consortium as the sole transaction adviser for Yola and Afam Power Companies, he said there was nothing untoward about it, rather  “it is in furtherance of the Bureau’s stance on transparency because the Consortium participated in the two distinct bidding processes for the selection of transactions advisers and emerged   as the preferred bidder for Yola Power Company ”.

It will be recalled that although Yola Distribution Company 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. Following this, the company was duly repossessed by the Federal Government.