BPE clears air on privatization issues

THE Bureau of Public Enterprise (BPE) has cleared the air regarding the issues surrounding the privatization of Integrated Energy Distribution and Marketing Company (IEDM) and distribution companies.

The BPE said in a statement yesterday, that being the Secretariat of the National Council on Privatisation (NCP) does not have the powers to approve disbursement of funds as insinuated by a newspaper in two publications.

Reacting to media publications titled: “BPE okays billions for power DISCOs” with a rider as “As firms opt out of privatisation” and “government pays DISCO $186 million in last minute deal”, it disclosed that it is the Vice President, National Council on Privatisation (NCP) and Mr. President that have approval powers. And there is a process of obtaining such approvals from each of the mentioned approving authorities.

According to the agency, it must be noted that there are two notices of declarations of Force Majeure; namely political Force Majeure by some DISCOs occasioned by change in tariff. This political Force Majeure was reported to the NCP meeting held on Thursday, April 16, 2015.

It stated: “NCP deliberated on the matter and set up a committee chaired by the Minister of Power to engage the DISCOs and resolve the matter. Membership of the Committee comprised representative of the Ministry of Power, NERC and BPE. Series of meetings have been held and the DISCOs have already indicated their willingness to withdraw the notices of Force Majeure based on the progress made in resolving the tariff issues.

“It should be noted that giving of notice of a declaration of a Force Majeure does not automatically result in the acceptance of such a declaration. A process of validation of the claims has to be followed to determine the genuineness of such claim.

“The second notice of declaration of Force Majeure is that of Yola Electricity Distribution Company (YEDC). YEDC had on six occasions (November 10, 2013, August 27, 2014, October 15, 2014, April 9, 2015, April 30, 2015 and May 13, 2015) given notice of Force Majeure. Consequently, the matter was tabled before the Technical Committee Power sub-Committee at one of its meetings. The TC Power Sub- Committee recognized the reality of the Force Majeure which is in line with Clause 7 in the Share Purchase Agreement and made recommendations to the TC. Clause 7 states that in a war situation where the core investor cannot operate, it can invoke Force Majeure on issues beyond its control.

“The recommendations of the TC Power Sub- Committee were deliberated on by the Technical Committee (TC) of the NCP at its meeting of Tuesday, April 14, 2015 and it also acknowledged the basis for the declaration of Force Majeure. The TC made its recommendations to the NCP which at its first meeting for 2015 held at the Presidential Villa, Abuja on Thursday, April 16, 2015; set up a committee comprising the Permanent Secretary, Ministry of Power (Chairman); a representative of the Nigerian Electricity Regulatory Commission (NERC) and the Director-General of the BPE to explore the implementation of the Force Majeure terms contained in the provisions of the Share Purchase and Performance Agreements”.