Namadi Sambo, NCP Chairman
With just $252 million bid, a teleommunication consortium has clinched the the Nigerian Telecommunications Limited (NITEL) as the preferred bidder.
If it is able to mobilise funds and pay as stipulated, the mulch-billion dollar assets of the former telecoms monopoly in the country will be NATCOM’s for good.
NATCOM emerged the preferred bidder for the moribund Nigerian Telecommunications Limited (NITEL) and its mobile arm, the Mobile Telecommunications (M-Tel), after offering to pay $252,251,000 under a guided liquidation process for both firms.
The financial bid held by the Bureau of Public Enterprises in Abuja on Wednesday.
The consortium had initially offered to acquire them for $221 million, but the offer was rejected by the Vice-Chairman of the Technical Committee of the National Council on Privatisation (NCP), Alhaji Haruna Sambo, for falling below the reserve price.
NATCOM however won the bid when it eventually offered $252.25 million.
Mr. Tunde Ayeni, who has interests in the oil and gas, power and banking sectors, one of the chief promoters of NATCOM.
He is also the Chairman of Skye Bank Plc, which only recently acquired Mainstreet Bank (former Afribank) from the Asset Management Corporation of Nigeria (AMCON).
The second bidder for the moribund NITEL was NETTAG, which was prequalified by the BPE to participate in the liquidation process, but was disqualified for failing to include a $10 million bid bond as stipulated in the Request for Proposals (RFP) prepared by the privatisation agency.
Reading from the relevant section, Sambo explained that the RFP required that “each bidder shall furnish, as part of its proposal, a bid bond in the form of Bank Guarantee or a Letter of Credit in the sum of $10 million. The bid bond must be enclosed with the Technical Proposal.
“The Bank Guarantee or Letter of Credit shall be from a reputable bank acceptable to BPE and the liquidator and be valid for 120 days from the deadline for submission of proposals. Provisions must be made for extension of the term of the bid bond if the validity period is extended.”
He said following the disqualification of the NETTAG consortium as a result of its failure to submit a bid bond with its technical proposal, only the financial bid of NATCOM was prequalified for opening.
NATCOM, he disclosed, had scored 92 per cent when its technical proposal was evaluated, which was above the minimum pass mark of 75 per cent, and had met the requirement for moving on to the financial bid stage with the submission of a valid bid bond.
Sambo, who represented Mr. Atedo Peterside, Chairman of NCP’s Technical Committee, said as stipulated under the RFP, 30 per cent of bid price is to be made within 15 days of notification of the winning bid while the balance would be paid within 90 days.
He recalled that as part of the reform of the Nigerian Telecommunications sector, a new National Telecommunications Policy was adopted in August 2000 and a new Nigerian Communications Act was passed into law in 2003.
According to him, the new legal framework provided the basis upon which the process for privatising NITEL commenced in 2001, stating that since then, there had been four different unsuccessful attempts to privatise NITEL to private operators and one failed management contract.
He said all the measures were aimed at repositioning the company to play a significant role in the Nigerian economy.
Enumerating previous attempts that had gone belly up, Sambo said the first entailed the strategic core investor sale of 51 per cent of NITEL to Investors International London Limited (IILL) in 2001.
Others included the failed management contract by Pentascope in 2003-4; the aborted Orascom Telecoms bid in 2005; the strategic core investor sale of 75 per cent through a negotiated sales strategy to Transcorp cancelled in 2009; and the strategic core investor sale in 2011 when New Generation Communications Limited and Omen International emerged as preferred and reserved bidders respectively.
He said it was after a review of the chequered history of the privatisation of NITEL that the NCP at its meeting of February 27, 2012 approved the privatisation of NITEL through guided liquidation.
The strategy, Sambo explained, was adopted by the council after due consideration of other options and in the light of the previous failed attempts to privatise NITEL through various attempts, as well as the companies’ huge liabilities to creditors of over N300 billion.
Earlier, the Director General of BPE, Mr. Benjamin Dikki, said the NCP had faced numerous challenges including unpaid terminal benefits to ex-staff of NITEL, salary arrears of the retained staff and outsourced security personnel, and accumulated unpaid licence fees, among others to the Nigerian Communications Commission (NCC).
He added that with the active support of the federal government, BPE was able to overcome the challenges.
In her remarks, the Minister of Communications Technology Mrs. Omobola Johnson, said the privatisation of the government-owned telecoms firm was the last segment in the well thought-out reform of the nation’s telecommunication sector, which commenced since 2000.
She assured Nigerians that government would continue to review and fine-tune policies that would continue to provide an enabling environment for the growth and development of a private sector-driven Nigeria telecommunications industry.
