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By Pita Ochai
After about three botched attempts to sell former government-owned but now moribund telecoms firm, Nigeria Telecommunications Limited (NITEL), the Bureau of Public Enterprises (BPE) said it has opted for guided liquidation to save the firm from being sold as scraps. Already, two firms have been approved by the Federal Executive Council (FEC) to bid for the moribund telecommunications company.
According to BPE, the NITEL has lost its relevance in the scheme of things with the liberalization of the telecoms sector, but the government owes it a duty to the people not to sell the telecoms firm in bits.
BPE’s Director General, Benjamin Dikki said it is opting for guided liquidation because it has worked in the privatisation of the Nigeria Fertiliser Company (NAFCOM) now operating as Notore. It was also used in Jebba Paper Mill and Savannah Sugar Company and these firms are now flourishing after the successful guided liquidation. “With the reforms and the liberalisation of the sector, nobody remembers that there was a NITEL. We are not missing NITEL because the sector has been liberalised and there is competition among players in the telecoms sector. The issue of mode of privatisation of NITEL is purely a legal matter.
NITEL is owing over N400million in debts. If it is to be run by government as some people have suggested, it means that government has to cough out money to resolve those liabilities. Why should government provide money to revive NITEL when it is no longer a critical infrastructure in the Nigerian economy? Without NITEL, Nigerians will still survive in terms of access to telecommunications. So, NITEL has ceased to be a critical asset,” he said.
According to Dikki, BPE has only decided to take advantage of the Companies and Allied Matters Act. “We didn’t want it to be the typical liquidation style, where you sell one building, one cable to different parties. We call it guided liquidation because we want whoever buys NITEL and Mtel to still continue to run them and not to extinguish NITEL from business,” he said.
“Guided liquidation means that we take protection from the law, that it is only the proceeds from the sale of the assets creditors can have access to. After that they cannot have a recourse to government or any shareholder in it. That is why we say guided liquidation. We still maintain NITEL as a business. We will not decimate its assets. Whoever buys NITEL will give us a technical proposal on how he is going to resuscitate it and runs it as a telecom company.”
While past efforts to privatise the telecom firm were marred with controversies, two of the 17 companies initially listed as bidders of NITEL and its mobile arm, Mtel, have been shortlisted by the federal government.
The two companies which were approved for the issuance of request proposal are Natcom Consortium and Nectar Consortium. Both emerged tops with 90.7 and 90.2 per cent score respectively. Assets up for bid in NITEL are the licences and the spectrum, the nationwide fixed wired networks, the national right of way duct system, the fibre optic transmission backbone, and the CDMA network system. Others are international gateway earth stations, microwave transmission equipment/network and towers, and some core assets.
The assets up for sale in Mtel are the licences and the spectrum, national right of way, the Mtel GSM network including mobile switching centres, base station controllers, base transceiver stations and the general packet radio services. Also for sale are the analog (TACs) system among other core assets.
The SAT-3 international submarine cable in which NITEL has 6.32 per cent shareholding is also for sale. In a joint statement by Musa Sada, minister of mines and steel, Mike Onolememen, minister of works, and Dikki, after a Council of State meeting recently on behalf of the government, the trio said the government was making efforts in the guided liquidation process to ensure that NITEL/Mtel come back with robust network of infrastructure.
To Gabriel Ajayi, a telecom engineer, government agencies in Nigeria and the officials that run them either have short memories or they are simply indifferent to the feelings of Nigerians over the privatisation of NITEL ,Mtel. “It is a shame that the Federal Government officials have come out again to insult Nigerians by telling the world that two firms have been selected to buy up the assets of NITEL,” he said.
NITEL has gone through several botched privatisation bids. In 2011, its privatisation process failed for the umpteenth time when Omen International, the reserve bidder, did not revalidate its bid for the national carrier. Omen was said to have concluded that it would be unable to raise the money it offered for NITEL, just as the New Generation Consortium, the preferred winner of the February 2010 bid, was unable to meet up. New Generation Consortium consist of China Unicom of Hong Kong, Minerva Group of Dubai and Nigeria’s GiCell Wireless Ltd. In 2001, Investors International London Limited (IILL) made the first attempt to acquire NITEL but defaulted in paying the bid price of $1.317 billion, thus forfeiting the bid.
Pentascope of Netherlands was appointed to revamp NITEL, but that attempt also failed and left NITEL debt-ridden. Orascom also attempted to acquire NITEL with $256.5 million but lost the bid to Transcorp which acquired it for $500 million. The sale to Transcorp in 2006 was the most successful with Transcorp acquiring a 75 per cent stake which was later reduced to 51 percent 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 attempt also failed to revive NITEL and it eventually exited.
Ajayi wondered why the federal government never cared to find out why NITEL is unsellable? “Is it because it is in a very bad state? Certainly not! It is because NITEL, like NEPA, provided government functionaries jobs and contracts for the boys. Those that have been milking the nation dry profit from NITEL and other federal parastatals. So why will they allow it to go for free? It is the double dealing in government quarters that has made it impossible for NITEL to function as well as being sold,” he said.
Ajayi said it was laughable when Sada said that the approval of the two companies followed the consideration of the evaluation reports for the expression of interests on the guided liquidation of NITEL/Mtel. According to Sada: “there were quite a number of companies and about 17 were shortlisted based on a criterion; it is guided. There is a criterion that is used at every point in time and of this evaluation of the 17 (companies), two qualified for request for proposal issuance. This is what the Council deliberated upon and approved the qualification of the two companies, and the two companies are Natcom Consortium and Nectar Consortium.”
But Ajayi questioned the minister’s statement: “Was the council not guided by this same criterion in the past and it failed to deliver, what will make the difference now? Are the entrenched interests no longer there?.”
Nigerians were frustrated that NITEL failed to deliver impeccable services that can compare with other countries’ networks. They are not too optimistic that the present government can do what it is planning to do with NITEL. From 1958 to the arrival of Global System for Mobile Communications (GSM) in Nigeria; NITEL was able to provide just 450,000 lines. Today, there seems to be no functional land line in the country. GSM has taken over. But this is an aberration from the norm. Land lines are imperative for communication and data transmission.
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