By Prince Okafor
FORMER Minister of Finance, Dr. Kalu Idika Kalu has said the old structure of Power Holding Companies of Nigeria, PHCN, was unbundled prematurely, necessitating the non attainment of the projected 10,000 mega watts.
Speaking at the annual general meeting of the Institute of Directors, IOD, in Lagos, Kalu said: “Perhaps we should have striven to improve the efficiency of public power monopoly until we reached the threshold of, say, 7,000-10,000mw of electricity supply, to household, industrial uses, and other energy customers, before we embarked on the experiment to unbundle, in line with the deregulation of the power sector.
He outlined the four principles that must guide efficient and long term cost effective privatization of enterprises hitherto domiciled in the public domain.
According to him, “the first principle deals with the ability of the potential bidders to pay the reserve price which requirement must be satisfactorily established prior to a bidder being shortlisted for the bidding.
“Second requirement is that the shortlisted bidder must demonstrate adequate knowledge of the technology of the enterprise. This will ensure the bidder’s ability to undertake due technical diligence of the plants and equipment, and that pertains to its rating, as well as its commercial and operational viability.
“Third requirement is an unambiguous evidence of prior management experience of the type of enterprise to be privatized. This also will ensure that, once privatized, the new owners can steadily get on with the process of employing the requisite labour and materials to sustain continued delivery of the goods and services with minimum delay. “The fourth is the quality and efficacy of the business plan. All the four criteria must be taken pari pasu-in the evaluation of the final bids,” Kalu explained.