By NBF News
Listen to article

The Bureau for Public Enterprises, BPE, yesterday, expressed frustrations before the House of Representatives over efforts to privatise the Nigerian Telecommunications Company, NITEL, and Mobile Telecommunications Limited, MTEL.

The debt pile up on the moribund telecoms company as at yesterday, according to BPE submission, is N208 billion.

In view of facts availed the Green Chamber over the on-going efforts to sell the company, House Committee on Communications, led by Rep. Dave Salako (PDP/Ogun), has resolved to write the Vice President, Arch. Namadi Sambo, who doubles as Chairman of the National Council on Privatisation, NCP, to arriving at a solution to the process.

The Director-General, BPE, Mrs. Bolanle Onagoruwa, in a report she submitted to the House of Representatives Committee on Communications, titled: 'Bureau of Public Enterprises Report to the House Committee on Communications on the NITEL/MTEL Sale Transaction', said the preferred bidder, New Generation Consortium Limited, was yet to pay since the extension granted to it by government expired.

Her report to the Committee read in part: 'Upon the receipt of the approval, BPE consulted with its legal team and the transaction advisers, BNP Paribas, in order to establish the legal basis of continuing the transaction after nine months delay. After the review, a letter of notification to New Generation Consortium to pay 30% ($750,000,000) of the bid offer as bid security within 10 days was received by the consortium on October 25, 2010, with payment due 4, November 2010.'

'On the day of the expiry of the payment deadline, the consortium wrote requesting for a 20 working days extension in view of the stringent due diligence and compliance procedures they had to comply with in order to remit a large sum of $750,000,000 in the first instance and $1,750,000,000 in the second installment.

'Government approved that New Generation Consortium Limited be granted an extension of twenty (20) working days with effect from 23 November 2010 to pay the 30% Security deposit of US750million.

'New Generation Consortium Limited has not been able to meet the payment deadlines'.

But the DG of BPE, however stated in the report that: 'According to the terms of the RFP (Request for Proposal), if the Preferred Bidder failed, the Reserved Bidder, would be reverted to. Failure to do so may result in litigations and possible damages being granted to the Reserved Bidder', adding that 'Recommendations have been made to Government and we are awaiting further directives'.

The BPE DG recalled in the report that: 'In a related development, the National Council on Privatisation (NCP) at its meeting on 11 June, 2010, re-activated the Presidential Taskforce on NITEL/MTEL Labour Restructuring (Taskforce) headed by the Honourable Minister of Labour and Productivity, to address the issue of outstanding salaries and allowances owed NITEL/MTEL staff and to determine the number of staff to be disengaged to reduce the wage liabilities for Government, since the enterprises are not operating'.

She also recalled that 'After due deliberation, the committee recommended that all employees of NITEL/MTEL be disengaged and immediately re-engage 455 transition staff from the 3,389 staff. It would reduce the monthly wage bill to N115.5million from the current N695million. The re-engaged staff will remain to handover to new core investor. The existing security arrangements will also be maintained to secure the assets of the companies.

'The sum of N52.2billion is the total amounts required to settle the salary arrears, entitlements to current disengaging NITEL/MTEL staff, allowances payable due to court judgment to 2006 disengaged staff, pensioners and casuals.

She added that: From the 6th to 21st of December, 2010 verification and payment of all NITEL/MTEL staff and pensioners except the casual staff was carried out in 14 designated centres nationwide', she added that 'FGN(Federal Government of Nigeria) has provided funds to complete the payment of exercise. Payment would be made in two installments in March and May 2011'.

According to her, 'Due to the poor record keeping of the pre and during Transcorp Management, it has been impossible to establish the actual debts of NITEL/MTEL. In order therefore to attract reasonable bids, NCP approved to sell the enterprises net of all debts. The entire debts of NITEL/MTEL were assumed by government and would be warehoused for subsequent settlement from the proceeds realised from the sale'.

'In order to determine the total indebtedness of the Companies, the Bureau advertised requesting all creditors of NITEL/MTEL to submit their claims. Claims received will be verified and negotiated before settlement at the conclusion of the sale. So far, claims of over N208billion have been received. There may be more claims especially from the plethora of cases pending against the companies', she stated.

Recall that since the year 2000, when reforms in telecoms sector were concluded, the FG has struggled in futility to privatise NITEL and MTEL. Starting Investors International London Limited, followed by the Dutch Pentascope Management Contract, Orascom, Transcorp and now New Generation.