Senate Demands Probe into Sale of Afam to Transcorp

Afam Power to Transcorp

By Modupe Gbadeyanka

A few days ago, the sale of Afam Power to Transcorp Plc for N105 billion was celebrated and the transaction boosted the demand for the shares of the conglomerate at the stock exchange, where it is listed.

This investment deepens our play in the power sector and takes our overall installed generation capacity as a business to 1,936MW from 972MW installed at Transcorp Power located in Ughelli, Delta State,” Transcorp had said after its Chairman, Mr Tony Elumelu, and the Director-General of the Bureau of Public Enterprise (BPE), Mr Alex Okoh, signed the deal at a ceremony held in Abuja and witnessed by the Vice President of Nigeria, Mr Yemi Osinbajo.

But the Senate wants an investigation into the deal, especially the sale of the shares of the federal government in Afam to Transcorp.

According to the Chairman, Senate Committee on Privatization and Commercialisation, Mr Theodore Orji, the reason for the probe is to ensure that the country was not short-changed in the transaction.

In a report by New Telegraph, the BPE is proposing to sell the Geregu, Omotosho and Calabar power plants next year for N434 billion.

It is no news that Nigeria is broke, forcing the federal government to offload some assets to raise funds to run the country. The main source of income for Nigeria, the sale of crude oil, has suffered a decline lately as a result of COVID-19 and it is projected that an economic recession will occur this year.

It was reported that the BPE informed the Senate during its defence for the 2021 budget that these power plants and other assets will be offloaded next year.

The Geregu power plant is to be sold for N140.7 billion, Omotosho Power Plant for N151.4 billion and Calabar Power Plant for N143.4 billion.

In addition, the National Stadium, Lagos; Moshood Abiola Stadium, Abuja; Jos International Stadium, Plateau State and Adokiye Amiesimaka Stadium in Port Harcourt, Rivers State are expected to be offloaded at N100 million each, while the National Art Theatre in Lagos will go for N200 million, Tafawa Balewa Square for N436 million and all the River Basin Development Authorities will go for N200 million.

But the Senate wants these assets to be offloaded at a rate that is beneficial to the Nigerian people and according to Mr Orji, a former governor of Abia State, an investigation would be done.

“We also found that in Geregu Power Plant, the core investor already owned 51 per cent shares and that the transaction emanated from a request by the investor for additional 29 per cent of the federal government’s residual 49 per cent shares.

“There was no competition and only BPE and their appointed transaction advisers know how the value was determined and sold for N13 billion.

“Afam Power Plant, it was mentioned that there are actually two different power plants i.e. Afam Power Plant and Afam Fast Power (a brand new plant) built by Siemens yet to be commissioned.

“Reports have it that it cost about $1 million to build a megawatt of power plant a megawatt of power plant,” the lawmaker was quoted as saying in the report.

Recall that popular billionaire businessman, Mr Femi Otetola, sold his stake in Forte Oil in 2019 to concentrate on the Geregu Generation Company Limited located in Ajaokuta, Kogi State.

The energy plant has a unique configuration of three gas turbines (Siemens V94.2 Gas Turbines) with a capacity of 506.1 MW (ISO) and 434MW (Net).

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

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