Wednesday, February 24, 2010

Reps laud BPE on sale of NITEL

Federal lawmakers Monday applauded the Bureau of Public Enterprises for its recent sale of Nigerian Telecommunications Limited (NITEL) and Mobile Telecommunications (Mtel) to New Generation Consortium Limited, reported ABIODUN ADELAJA &
ADEKUNLE ADESUJI.

Chairman, House Committee on Privatization and Commercialization, Hon. Abbas Braimah made this known in a press statement issued in Abuja, they canvassed that despite the controversies over the sale of NITEL, New Generation Consortium should be allowed to choose another technical partner.

The committee expressed satisfaction with the process of the biding which was won by New Generation Communications Ltd led by Nigerian GiCell, for $2.5 billion.

They said the bidding was done in a process that was “transparent and in line with the guidelines for the selection of core investor.”

This is coming on the heels of allegation by the bid winner’s technical partner, China Unicom (Hong Kong) limited that it was not involved in the $2.5 billion bid for NITEL/Mtel.

At the presentation of the core investors sale process and profile of bidders by the Chairman Technical Committee of the National Council on Privatisation (NCP), Dr. Mohammed Hayatu-Deen at the Financial Bids Opening of NITEL on February 16 , the New Generation Consortium included GiCell Wireless Limited, China Unicom (Hong Kong) Limited and Minerva Group.

According to the Committee in the press statement\ signed by a member of the Committee Hon. Segun Akinloye on behalf of acting Chairman of the committee, he noted that unlike the three previous failed attempts at privatizing NITEL/Mtel, the BPE in the recent bid introduced a more stringent requirement of posting a 30 per cent bond of the anticipated bid offered by each potential core investor.

It explained further, “This requirement was met by the bidders and this condition was introduced to fend off unserious bidders who if they won the bid would be unable to pay the final bid price as we have experienced in several other Financial Bid openings.

“The committee is pleased with the outcome of the financial bid opening which produced $2.5 billion and $945 million respectively as offers from the designated Preferred and Reserved Bidders pending NCP’s approval.”

The Committee also said the bid winner, New Generation Communications should be allowed to choose another technical partner in line with the privatization guidelines so that the current sale will not be scuttled.

It could be recalled that the bid to sell the NITEL/Mtel in the past ran into turbulent waters as the National Council on Privatisation (NCP) at an emergency meeting on June 1, 2009 approved the revocation of the sale of NITEL/Mtel to Transnational Corporation of Nigeria PLC (TRANSCORP) for its inability to transform the company.

Other reasons for the revocation were the non-injection of funds into NITEL/Mtel, failure to adhere to the terms of the Share Sales Purchase Agreement (SSPA), and the inability to meet its obligation to pay staff salaries.

The statement said if China Unicom decided to pull out of the consortium, New Generation should be given the opportunity to replace them to move the process forward after payment of the bid price as approved by the NCP,” the statement added.

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