@NNs,
Nitel....the story so far:
"Gauging the new political twist to NITEL sale
By EVEREST AMAEFULE, Published: Sunday, 14 Mar 2010
When the Acting Chairman of the Technical Committee of the National Council on Privatisation, Professor Taiwo Osipitan, announced that the New Generation Consortium Limited had won the bid to acquire 75 per cent in the Nigerian Telecommunications Limited on February 16, many heaved a sigh of relief.
For many, the end of the long walk that had taken about 10 years was in sight. For others that know how controversial and emotional the exercise could be, there was need to be cautious in expressing optimism that a final suitor was now ready to take NITEL and its mobile subsidiary home.
The bid sum of $2.5bn was the source of worry this time. How can a company stake $2.5bn for 75 per cent stake in NITEL that had been financially insolvent while almost every operator in the Nigerian telecommunications sector was smiling regularly to the bank?
For this cautious group, it was only a matter of time before a fresh controversy would explode. Remembering the inability of Investors International of London Limited to pay $1.317bn for 51 per cent equity in NITEL in 2001, many reasoned that the bubble would burst when New Generation is invited to pay the bid price.
Among the five companies that eventually tendered for NITEL, the closest rival to New Generation, Omen International offered a bid of $954m, a price many considered more realistic. This raised the suspicion that New Generation may not be able to pay when invited.
The controversies
For those waiting for a controversial twist, it came too early - just a day after the bid opening - as a member of the New Generation Consortium; China Unicom, denied any involvement in the deal. The company had been listed as the technical partner. It was to later clarify that its European subsidiary had offered technical partnership to the New Generation consortium on terms that were yet to be agreed on. But the denial had already taken its toll on the integrity of the transaction.
As if that controversy was not enough, the Federal Government proceeded with the suspension of the Director General of the BPE, Dr. Christopher Anyanwu, based on a petition written by the Chairman of the Technical Committee of the National Council on Privatisation, Mr. Mohammed Hayatudeen.
Investigations by our correspondent showed that in the petition, Hayatudeen had accused Anyanwu of insubordination to the Technical Committee which oversees the actions of BPE on behalf of NCP.
It was learnt that Anyanwu had a penchant for bypassing the reporting line to get approval for memos originating from BPE. Apart from bypassing the technical committee most of the times, our correspondent learnt that he once bypassed NCP chaired by Goodluck Jonathan as Vice-President to get an approval from President Umar Yar?Adua.
Investigations also showed that aides to Jonathan especially his Economic Adviser, Mr. Sam Worlu, and Principal Secretary, Chief Mike Oghaidome, had not been happy with the way Anyanwu preferred to deal directly with their boss instead of through them.
Coming on the heels of the transaction, the immediate interpretation of observers was that Anyanwu?s suspension had to do with the conduct of the sale of NITEL.
The preferred bidder and the price
The most influential member of the New Generation Consortium is the Minerva Group based in the United Arab Emirate. The group had written two times to state its readiness to finance the acquisition of NITEL by the New Generation Consortium. It plans to acquire 68 per cent shares of the New Generation Consortium to be able to control 51 per cent equity in NITEL. It has also stated its capacity and readiness to advance loans in excess of $5bn to reactivate NITEL.
The second most prominent member of the consortium is the G-Cell Wireless Limited led by Mallam Usman Gumi. G-Cell has been operating in several un-served and underserved areas of the Nigerian telecoms market including about 405 communities spread around Cross Rivers State and Kwara State. It is a beneficiary of more than $5m grant from the World Bank to address underserved markets in Nigeria. G-Cell also won the bid to operate the rural telephony project of the Ministry of Information and Communication in North East geopolitical zone. Investigation by our correspondent showed that the five other companies that won the rural telephony bids in the other five geopolitical zones are also members of the New Generation consortium. They plan to integrate the rural telephony project into the new NITEL.
A Deputy General Manager at NITEL, Mr. Pius Ugandem, told our correspondent that what the New Generation Consortium was buying was opportunities and not necessarily what was on the ground. He expressed confidence that the consortium would be able to recoup its investment in one year, adding that NITEL had sufficient human resources to make this happen without necessarily looking for expatriates that could cost much more to the consortium.
But Managing Director of the Nigerian Communications Satellite Limited (NigComSat) and a Member of the NITEL Board of Directors, Mr. Ahmed Rufai, said instead of focusing on the bid price offered by New Generation, people should take another look at NITEL.
Rufai, who always insisted that NITEL has tremendous market value, asked if anybody knew the market value of NITEL?s right of way throughout the country. Insisting that the bidder must have done its due diligence well, Rufai reminded our correspondent that NITEL was now being sold without liabilities. He added that the Federal Government needs about $1.8bn to settle NITEL liabilities including workers salary arrears and Transcorp?s debt.
Others of similar opinion added that seven years after GSM operators insisted that they paid heavily for their frequencies, Etisalat paid $400m for the same frequency that other GSM operators paid $285m to obtain. According to them, apart from numerous frequencies, NITEL has abundance of other telecommunications resources.
While the controversies rage, New Generation has not yet been issued a letter of authority to begin payment for NITEL. This has thrown the transaction into the political arena with key political actors joining the fray.
Now enters the lawmakers
Chairman, Senate Committee on Communications, Senator Sylvester Anyanwu, told our correspondent that the committee may petition Acting President Goodluck Jonathan over the delays in concluding the sale to a new core investor.
Anyanwu lamented that 24 days after the financial bid, the preferred bidder was yet to get a letter of offer from the BPE, which serves as the secretariat of the National Council on Privatisation.
The committee chairman said it had become necessary to seek Jonathan?s intervention in order to give NITEL an opportunity to be revived and restore the hope of many workers and the youths that can be employed in a thriving environment.
Head of Public Communications at BPE, Mr. Chigbo Anichebe, however, told our correspondent on the telephone that the preferred bidder had not been issued with a letter of offer because the NCP headed by Acting President Goodluck Jonathan had been able to meet to ratify the transaction due to his busy schedule as Acting President.
Anyanwu said, ?I don?t understand the delay in issuing the necessary documents to the preferred bidder. The committee intends to write the Acting President on this. The more we delay the more NITEL continues to wither. We should not allow NITEL detractors to continue to hold us back. If we are able to get NITEL back, there is no way it cannot employ 1,000 Nigerians.?
Anyanwu said the Senate might also demand an apology from the Chinese company for its role in demonising the transaction with the initial denial it issued without clarifying matters with its European subsidiary.
CNPP joins the fray
Now the Conference of Nigeria Political Parties (CNPP) has also joined the fray. The conference has warned Jonathan against tampering with the process of selling NITEL and M-Tel to New Generation Consortium Limited.
Addressing a press conference in Abuja on Thursday, National Publicity Secretary of the organisation, Mr. Osita Okechukwu, said it was too early for Jonathan to allow tainted predators to deceive him into cancelling the exercise.
Okechukwu said, ?CNPP is outraged that after 23 days the Technical Committee of the National Council on Privatisation and the Bureau of Public Enterprises had concluded the NITEL bid, the rule of law and due process seem to be abandoned from all indications and to add salt to injury, the Director General of BPE, Dr. Christopher Anyanwu, has been sacrificed on the alter of intrigue, manipulation and self serving officials of NCP.
?We are further embarrassed that the Acting President wittingly or unwittingly is allowing the rule of law, due process and the nation lose $2.5bn; after exhaustive due diligence was carried out by both the Technical Committee and the transaction advisers, BNP Paribas Consortium; if the bid won by New Generation is cancelled.
He added, ?CNPP wishes to warn that it will be too early in the day for the Acting President to allow predators and scavengers who are alleged to have collected huge sums in dollars to deceive him into cancelling the NITEL bid.
?NITEL bid since 2001 had suffered a lot of reverses that the liabilities trailing the transaction are hovering between $1.5bn and $1.8bn.?
Okechukwu added that should the NITEL bid be cancelled, CNPP would be forced to open the Pandora?s Box because it believed that there was no cogent and verifiable reason to annul the exercise.
There were indications on Thursday that the National Council on Privatisation could meet on Friday to take decision on the transaction. If the council eventually met, the outcome of the meeting had not been ascertained as at press time. So the waiting game continues and who knows the twist next time. Goodluck, the ball is now in the court of Jonathan."
Samstone4
Alakoso...
