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NITEL - FG Still At a Loss(AllAfrica Via Acquire Media NewsEdge) The Federal Government is yet to succeed in its many attempts at privatising the once buoyant but now ailing Nigerian Telecommunications Limited (NITEL). Many Nigerians believe the government should discontinue the idea as the company has continued to defy privatisation The Federal Government seems confused as regards what to do with the Nigerian Telecommunications Limited (NITEL) after trying for about 10 years to sell the ailing company, known for its monopoly in the good old days. Specifically, the government had made five attempts in the past 10 years to sell NITEL to core investors and all had repeatedly run into hitches. In 2001, Investors International London Limited (ILL), made an attempt to acquire NITEL but defaulted in paying the bid price of $1.317 billion and lost the attempt. Thereafter, Pentascope of Netherlands was appointed to revamp the moribund telecoms firm, but that attempt also failed. Orascom also attempted to acquire NITEL with $256.5 million but lost the bid to Transcorp, which acquired NITEL for $500 million. The sale to Transcorp in 2006 appeared to be the most successful with Transcorp acquiring a 75 per cent share of NITEL/M-Tel, which was later reduced to 51 per cent due to issues of finance. Transcorp at the time got a $500 million facility from a consortium of banks led by UBA Plc to acquire the shares. The Transcorp's attempt did not revive NITEL and was finally revoked by the Federal Government. New Generation Consortium, Omen International and Brymedia emerged the preferred, the second and the third bidders respectively in the last attempt in February 2010, but New Generation and Omen failed to acquire the company as they could not pay the required 30 per cent bid bond before the deadline set for them by BPE, and even after several extensions granted them. The third bidder was not given the chance because what it bid was said to be too low. New Generation had emerged the preferred bidder with an offer price of $2.5 billion during the opening of financial bids for the telecoms privatisation held on February 16, last year in Abuja. It was expected to pay $750 million being the 30 per cent bid bond, but it failed to pay even after several extensions granted it by the privatisation agency. The company was followed in the bid process by Omen, who emerged the reserved bidder, with an offer price of $956,996,091. Another company, Brymedia emerged third with $550 million. The Bureau of Public Enterprises (BPE) had in March this year written to Omen to revalidate its bidding, following the failure of New Generation to pay the 30 per cent bid bond after two extensions of deadline. The BPE equally wrote to the New Generation that its position as the preferred bidder for the privatisation of NITEL had lapsed. Daily Trust had reported exclusively that Omen might not be able to pay the bid bond and might go the way of New Generation before it. A reliable industry source had told Daily Trust then that "Omen will go the way of New Generation as both of them (New Generation and Omen) are believed to be from the same technical partner and may be facing the same financial challenges." Feelers from the Bureau of Public Enterprises (BPE) yesterday indicated that no action or directive has been issued by the chairman of the National Council of Privatisation (NCP), Vice President Namadi Sambo, on what next should be done about NITEL. A source in the agency told Daily Trust that "nobody seems to know what next will be done on NITEL, and it may remain like this for now." Another source, who preferred anonymity, said the Federal Government may eventually yield to demands from some quarters that the government should revamp the company, instead of putting it up for sale. Many Nigerians who spoke with Daily Trust yesterday held the opinion that government has the wherewithal to turn around NITEL. They believe the government is just not serious by giving away all its companies in the name of privatisation. Habila Nuhu, a civil servant, told our correspondent that government would continue to fail if it continues in its efforts at selling the ailing company. Nuhu advised that the government should invite experts with a mandate to make NITEL work and earn its revenue as the private telecoms operating companies do for their owners. But a new twist was again introduced into the NITEL privatisation imbroglio on Tuesday as the BPE, Daily Trust learnt, received a letter of intent from a new company stating its resolve to buy and turn around the moribund state-owned telecoms company. The company, Microfone Telecom Nigeria Limited, Daily Trust learnt submitted the letter to the office of BPE Director General on Tuesday afternoon and the letter "is being treated by her office." A source at the agency who pleaded anonymity told Daily Trust that the BPE DG, Ms Bolanle Onagoruwa may likely write the Vice President, Arc. Namadi Sambo, who is the chairman of the National Council of Privatisation (NCP) on Wednesday to intimate him on the Microfone's letter of intent to buy NITEL. Our source said after the failure of Omen International, the second bidder in the last privatisation exercise to pay the 30 per cent bid bond, the BPE had been under pressure from the Presidency to find solution to the NITEL's sale. BPE spokesman, Chukwuma Nwokoh, however told Daily Trust on Tuesday that "there is no update on NITEL sale." But the company's spokesman, Alhaji Tajudeen AbdulKareem confirmed to Daily Trust that Microfone on Tuesday submitted its letter of intent to buy NITEL. Alhaji AbdulKareem said the company has the financial muscle to manage the ailing NITEL and transform it for the better because of its dependable foreign technical and financial partners. He said the company had projected $500 million required to reactive all NITEL facilities to a maximum functional level. All equipment would be refurbished, he said, adding that all abandoned Code Multiple Division Access (CDMA) projects (which are over 80% completed) would be put back on track. He said Microfone has a solution-driven approach and ability to resolve the current NITEL ailments within a short time and that would benefit the company and further prepare it for sale to any future prospective and serious buyer. For a strategic company as NITEL and with good development, transformation period will not exceed five years, he said. The technical and financial partners of the company include: Tanexco; Belcon International; Sprint Nextel Corporation; and Crossland Communication. "We are in collaboration with a profound team of renowned financial experts whose background, qualification in trade and investments are based on practical experience with highly skilled technical partners," the Microfone spokesman said. The company's technical equipment partners, he said, are ready to provide finance to implement new projects as well as providing Voice Over Internet Protocol, VOIP, platform and provide a hub with NITEL analog telephone lines as well as completely sustain systems in every state in Nigeria. It will also supply over one million VOIP modems for VOIP telephone lines. But Nigerians will know in days to come whether all this things mentioned will indeed make the Federal Government So far, Nigeria and Nigerians are still losing. Copyright Daily Trust. Distributed by AllAfrica Global Media (allAfrica.com). |