" ITREALMS: BPE may revoke New Generation offer for NITEL

Monday, February 22, 2010

BPE may revoke New Generation offer for NITEL

… On violation of Sect 3.1.2

The last may not have been heard of the controversies surrounding the sale and re-sale of the first national carrier, the Nigerian Telecommunications Limited (NITEL) as indications emerged at the weekend that the Bureau for Public Enterprise (BPE) may revoke the preferred bidder’s offered by the New Generation Consortium Limited worth $2.5 billion.

In the bidding exercise which ended last Tuesday, February 16, 2010, saw the likes of MTN Nigeria Communications Limited offering ($25 million for SAT-3), Brymedia Consortium ($95,000), New Generations Consortium Limited ($333,333.33), AFZI/Spectrum Consortium ($200 million without liabilities and $173.333 with liabilities) and Omen International Limited (BVI) ($350 million).

But our investigations, weekend, revealed that both the first highest bidder and second, New Generation Consortium Limited and Omen International Limited (BVI), respectively, both violated a section of the BPE Request for Proposals (RfP).

This was particularly, on Section 3.1. which dwell on qualification of process in sub-section (2), which focused on alliance(s) by candidates by engaging Chinese Unicom and forbids any company expressing interest in the process to share two subsidiaries of any company.

While the two highest bidders in the process claimed technical supports from China Unicom, industry watchers, say that with this development, BPE may have no option than to revoke the bid offered by New Generation Consortium Limited and disqualify both New Generation and Omen International from the exercise.

This automatically would leave the likes of Brymedia Consortium and MTN Nigeria to scamper for the first place, which invariably depend on their primary offers, even though the RfP was specific on the preferences which BPE stipulated will be given to “Bidders willing to acquire the whole NITEL Group”.

Although earlier reports had it that Omen International Limited which emerged the first reserved bidder with the offer of $956million for the whole of NITEL has China Unicom Network Communications Company Limited as technical partners.

On the other hand, the proclaimed preferred bidder, the New Generation Consortium, claimed it has the support of China Unicom Europe Operations Limited to provide the technical and management support with 20 per cent equity participation.

Team leader of New Generation Consortium Limited, Alhaji Abubakar Usman Gumi, while reacting to a media report that China Unicom bought NITEL, said China Unicom (Europe) Operations Limited supported its bid, and confirmed that it will provide technical and management support whereas considering a minimum of 20 per cent equity participation on terms to be agreed.

Part of the RfP section 3.1.2 read “Strategic alliances or joint ventures between investors generally will be permitted. No entity (including for this purpose its shareholders, subsidiaries or associated companies) may be a member of more than one consortium. No member of a consortium or Applicant (including for this purpose its shareholders, subsidiaries or associated companies) may participate in the process as a separate Applicant. Alliances or joint ventures may be allowed if their purpose is to help the partners in strengthening their technical and/or financial capabilities, but any alliance, the aim or purpose of which may be to attempt to frustrate other Candidates from acquiring the Company or its assets, will not be permitted.”

Reacting to this in a chat with ITRealms Online, yesterday, the BPE spokesman, Mr. Chigbo Anichebe, maintained that they have not discovered any anomalies yet in the processes, though he agreed that two of the bidders used one technical partners, Anichebe said that they did not violate any stipulations of the BPE.

“Consortium is a consortium, and technical partners are just as the name implies. So, they did not violate any clause with regard to the current exercise,” he said, stressing that it does not call for revocation.

Meanwhile, Gumi in a press statement made available to ITRealms Online, weekend, entitled ‘China Unicom did not buy NITEL’ insisted that New Generation Consortium Limited, is the preferred bidder of the NITEL.

According to him, New Generation Consortium Limited is a group of several companies for the purpose of NITEL bid and naturally the consortium would have financial and technical partners.

He explained that the financial backbone of the New Generation Consortium is the Minerva Group of United Arab Emirates, which has what it takes to turn around NITEL and give Nigerians good telecommunication services.

“The Minerva Group, not China Unicom is the lead financial partner of New Generation Consortium Limited,” Gumi was quoted in the press statement.

Also, he pointed out that other consortium members include GiCell Wireless Limited, a Unified Access Service Licensee, Sumatra Star GT Limited and BGL Private Equity Limited, a subsidiary of BGL Plc.

In addition, he said, ‘’China Unicom (Europe) Operations Limited who supported the bid, confirmed that it will provide technical and management support and would consider a minimum of 20 per cent equity participation on terms to be agreed.’’

Gumi further said the new entrant into the Nigeria’s telecom industry would enhance increased competition and level playing field in the Telecoms Market and drive down price to the consumer.

“New Generation Consortium is clearly huge, and it promises the very best service the world of communications technology can offer’’, he assured, stressing they would contribute to the social, technological and economic development of countries where we operate. We will do this by investing in telecoms infrastructure, generating employment opportunities and developing products and services that contribute to the development of the society,” he asserted.

ITRealms Online recalls that the Federal Government in June 2009 revoked the sale of NITEL and M-TEL to Transnational Corporation (TRANSCORP) Plc, alleging the inability of the core investor to transform the company and adherence to the terms contained in the Share Sales Purchase Agreement (SSPA) as well as its obligation to pay staff salaries.

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