Wednesday, June 28, 2006
By Anas A. Galadima

Director General of the Bureau of Public Enterprises (BPE), Mrs. Irene Chigbue made this known yesterday when she visited the Daily Trust Corporate office in Abuja.

Mrs. Chigbue refused to disclose how much exactly Transcorp had offered to pay for NITEL, but said the bid could not be lower than the estimated N32.3 billion ($256 million) offered in a failed bid for the telephone company last year.

She denied Transcorp was selected because of its close links to the presidency. She said the firm was selected as the “preferred bidder” because it has the most financial and technical capability to buy and turn around the ailing telecommunications firm. The company currently has a financial liability of N167 billion. This is growing every day, Mrs. Chigbue said.

She said: “We are trying to reach an agreed amount that falls above the reserved price.”

She asked: “How can a new bidder offer less than the previous one?”
Transcorp, the multibillion naira corporation which was incorporated by some of Nigeria’s foremost business tycoons, got a higher rating than all other companies currently bidding to buy the firm, she said.
She said: “We have looked at them all. But the Transnational Corporation was the most vibrant in terms of consistent interest, in terms of appetite, in terms of preliminary evidence of resources to fund and revamp it.”

The BPE were impressed with Transcorp’s technical partners – British Telecoms, the former British Telecoms parastatal privatised in 1984.
They were also attracted by the concept of Transcorp. Mrs Chigbue said: “The idea is to have a company owned by Nigerians, given that Nigerians have shown and demonstrated some level of emotional attachment to NITEL. We knew what was happening, we knew how Nigerians were reacting. There was this emotional attachment to NITEL as our collective asset. So, let a company with a fairly broad representation acquire NITEL,” she said.

A $256 million bid by Egyptian company, Orascom, fell through last year after it was condemned in the press and by politicians for being too low compared to a previous bid of $1.13billion made by Investors International London Limited, in 2001.

She denied that the BPE was selling it to Transcorp because the key owners of the firm are perceived to be friends of the presidency. She said, “we have no way of determining whether the people in Transcorp are cronies of anybody. It is not our business. They had to put evidence of financial capability. It had to be put in the bid they submitted to us. They are the preferred bidders.”

She said the other seven companies that are also bidding for the telecommunications firm would remain as “reserve bidders”. In the event that Transcorp fails to offer an acceptable price, negotiations would begin with the reserved bidders.

The reserved bidders are Globacom, Afro Telecommunications Limited/Korean Telecomm, MTC/Celtel International, Investcom, Telkom SA and Etisalat

Mrs. Chigbue said the BPE decided to opt for “negotiated sale” of the company because all other previous attempts to sell it through the regular bidding process had failed. She said: “it was clear that given what we saw at the end of the year (2005), it required that we proceed rapidly to sell NITEL. It became clear that to do a full blown process which will terminate before 12 months will not work. We had to do a shortened version of a transparent process.”

The total liabilities of the company currently stands at about N167 billion, Mrs Chigbue said: “NITEL needs to be sold soon as it does not have any valuable assets. Their head office is rented from their own pension scheme and the infrastructure is in need of updating.”

Also during the interview, the Director General spoke on other issues related to the on-going privatization progra-mme. She said the bureau participated actively in the process of restructuring the Nigerian Security Printing and Minting Company (NSPMC), in preparation for the eventual sale of the company next year.

“Our destination is privatization. We are going to privatize the Mint next year by the Grace of God. That is the agreement we had with the Central Bank that we should be able to turn around the Mint before we can privatize.

Speaking on the government’s involvement in dredging the Imo River to facilitate the movement of raw materials and finished goods from the Aluminium Smelter Company of Nigeria (ALSCON), Mrs. Chigbue said the dredging was an act of providing infrastructure which ought to be the responsibility of the government.

She said before the company was sold, the government agreed to dredge the river and facilitate the supply of gas to the plant which is located in Ikot Abasi, Akwa Ibom state.

Explaining why Russal Group, the core investors, have not started work on the plant, she said, “The core investors are saying that let there be evidence that work has started on some of the projects before they can move in so that they can have comfort. You know when foreign investors are investing, they have some reservations. They want to see real evidence that the process has commenced before they can move in.”

The BPE boss also revealed that Folio Communications, the investors in Daily Times, have paid up the outstanding amount of the purchase price of the media firm, to the Nigeria Deposit Insurance Corporation (NDIC), bringing to an end the controversy that followed the sale of the outfit.

Folio Communications collected a loan from Hallmark bank to acquire federal government’s equity in the company. The bank was, however, liquidated at the end of the banking consolidation
“Last week, we got a note from the NDIC that they (Folio Communications) have paid. The buyer of Daily Times has paid NDIC the loan they borrowed.

She said the BPE has so far generated a total of $3.2 billion (about N416 billion) from the sale of public enterprises since it was established in 1989.