Group Petitions Presidency Over Privatisation Of Geregu Power Station ,Alleges Governor Suswan Has Shares In Seoul Electric Consortium.

The Human and Environmental Development Agenda (HEDA) has petitioned the presidency over the privatisation of the Geregu Generation Company Limited, alleging the involvement of the Governor of Benue State, Mr. Gabriel Suswam, in Seoul Electric Consortium and other breaches of the privatisation guidelines, and called for the reversal of the decision of the Bureau of Public Enterprises (BPE) and the Niger Delta Power Holding Company (DPHC) on the sale of the power station.

HEDA alleged that Suswan, who is also a director on the board of DPHC, the chairman of the Joint Transaction Technical Committee on Privatisation and the chairman of the Financial Bid Ceremony, has substantial indirect holdings in Seoul Electric Consortium and represents one of the key figures behind the said company.

In a protest letter addressed to the Vice-President, Namadi Sambo, who is the chairman of National Council on Privatisation (NCP), HEDA said the participation of Suswan in the privatisation process was a direct conflict of interest and clear violation of due process, the Nigerian legal system and international bidding rules.

“We would like to draw your attention to the fact that the former Minister of Power, Professor Bart Nnaji, was removed from his position on similar grounds,” HEDA said.
The group insisted that the decision of BPE and the DPHC on the Geregu Generation Company violated the guidelines of the privatisation process.

Copies of the letter were also sent to Director General, BPE, Mr. Benjamin Dikki; Attorney General and Minister of Justice, Mr. Mohammed Adoke and Vice-Chairman, NCP, Mr. Atedo Pterside.

The letter, which was dated March 14 and written on behalf of HEDA by a constitutional lawyer and Senior Advocate of Nigeria (SAN), Mr. Femi Falana, listed many alleged breaches of the privatisation guidelines and sought the intervention of the vice-president.

Apart from the involvement of Suswan, HEDA also cited the alleged failure of Seoul Electric to meet tangible net worth requirement at Expression of Interest (EOI) stage.


Attaching relevant documents, the group referred the vice-president to page 24 of CPCS, transaction adviser’s EOI Evaluation Report, where Seoul Electric Consortium is shown as having a net worth of $156.2million, with the following breakdown of shareholding: Ladom Network Limited – 70 per cent, Financial Advisory and Consultants Limited – 16 per cent and ALD Technical Services – four per cent, with the remainder being unallocated.

The group said from page 152 of the Proposal Evaluation Report, the total net worth of the three shareholders presented at the EOI stage is $0.45.

It also noted that the auditor confirmation for Ladom Network, Financial Advisory and Consultants Limited and ALD were obtained by CPCS.

“It is, therefore, impossible to understand how this consortium passed the EOI Stage, and was allowed to effect such material changes to the composition of the consortium prior to the Financial Bid Stage. It is clear that the initial consortium presented at the EOI Stage did not have the technical or financial capacity required by the privatisation guidelines and should not have further participated in the bid process,” the group said.
HEDA also alleged that Seoul Electric Consortium of China National Electric Engineering Company (CNEEC) Limited was fraudulently included as a member of the consortium:

“It has come to our notice that CNEEC which was listed as a technical partner and equity holder in the Seoul Electric Consortium by the consortium is not and was never a member of the consortium or a technical partner or equity holder.

The environmental group said in discussions with the General Manager of CNEEC’s International Business Department at the company headquarters in Beijing, China, he advised that CNEEC had not provided any letter of confirmation of its participation in the Seoul Electric Consortium or any other consortium in Nigeria.

The general manager, according to HEDA, also advised that it is strictly against company policy for anyone in CNEEC to issue such letter.
HEDA, therefore, insisted that the said letter on the basis of which Seoul Electric Consortium was pre-qualified did not emanate from CNEEC and thus Seoul Electric could not have therefore been pre-qualified.

The letter purportedly issued by CNEEC to the Seoul Electric Consortium was attached in the protest letter by HEDA as Exhibit A.

“It is clear on its face that the letter is not valid as it does not state the designation of the person signing it and does not make any specific reference to the sale of the Geregu Generation Company,” HEDA added.

The group further stated that it was aware that the transaction advisers, CPCS, and its technical consultants sent several emails to senior executives of CNEEC in Beijing seeking to confirm that they were part of the Seoul Electric Consortium, but none of the emails received a positive reply.

The group said in the circumstances, it was an obvious breach of the privatisation guidelines to qualify Seoul Electric at the technical stage of the bid process.

“We are aware that the Seoul Electric Consortium reached the required tangible net worth for the due diligence on the basis of CNEEC being a member of the Consortium. The fact that CNEEC never gave its consent for inclusion in the Seoul Electric Consortium means that the Seoul Electric Consortium did not meet the net worth requirement and should not have been allowed to further participate in the bid process,” HEDA added.

The group also alleged that CNEEC was not included by the Seoul Electric Consortium at the EOI Stage, adding that the Seoul Electric Consortium’s technical partner at that stage was purportedly Ladom Network.

“The dilution of Ladom Network from 70per cent to 25 per cent by CNEEC shows that Ladom network never had the capability to act as technical partner or the financial capabilities to close such acquisition. It also shows that CNEEC was included as an afterthought, as an act of desperation, and as we have shown above, without the consent of CNEEC,” the group said.

The group also alleged that a similar structure was presented by Daniel Consortium the winner of Sapelle Power Plant.

The third breaches of the guidelines is what HEDA called the non-confirmation of personnel whose CVs were submitted by Seoul Electric.

According to HEDA, a review of a certain section of the Due Diligence Report prepared by CPCS shows that four out of the five candidates whose CVs were submitted by the Seoul Electric Consortium to take up positions in the consortium did not confirm their participation.

“It is noteworthy that all the candidates that did not confirm their CVs were Chinese citizens and were most probably to come from CNEEC or the secondary TP listed. The fact that none of these candidates’ CV was confirmed is further evidence that CNEEC was never a member of the Seoul Electric Consortium,” the group said.

However, commenting of the allegations contained in the petition, a member of the NCP dismissed them as baseless, stating the petition was obviously sent by a "sore loser who had lost out during the financial bid process".

"We have seen this tactic used by sore losers several times in the past. If the losing consortium had all this information at its disposal from the outset, why did it not bring this to our attention since?

"It is only after a preferred bidder has emerged that petitions start flying all over the place. Besides, some of the allegations are very spurious as the rules for the bid process allows bidders to change members of their consortium insofar as BPE is duly notified and it grants the necessary approve.

"Also, the fact that the loser made enquiries from the Chinese firm and met a brick wall could have arisen because of a non-dislosure agreement that might have barred them from peaking about their relationship with Seoul Electric," the NCP member explained.

Though the NCP member said he had not yet been availed a copy of the petition, he wondered why the petition was being written by an environmental group, which has no locus standi in relation to the transaction.

"I am certain it is a sore loser who has asked Falana to write this petition. But they should unveil themselves if they are certain of their facts," he said.

When contacted on the issue, sources in the BPE said they were yet to get a copy of the petition but would address it once it reaches them.

Culled from ThisdayOnline.