OLA AWONIYI, Abuja | Tuesday
NIGERIA’S privatisation agency scrambled on Monday to rescue a $1,3-billion dollar sale of a controlling stake in the state-run telecoms agency after last minute hitches stopped the deal.
On Thursday, Vice President Atiku Abubakar was scheduled to preside over the signing of documents between the government and an international consortium, International Investors London (IIL) Ltd., led by Portugal Telecom.
But differences emerged over the role the Portuguese company, working through its partly-owned subsidiary TDT, would take in managing the project and the signing was put on hold.
With President Olusegun Obasanjo out of Abuja on a visit to the southeast, the signing was delayed while amendments to the deal were discussed and then needed for his approval, officials of the government privatisation agency said.
Nasir el-Rufai, head of the Bureau of Public Enterprises (BPE), met Obasanjo, back in Abuja Monday, to brief him on the talks and the options open to rescue the deal, said a senior BPE official.
Among those options was turning to the consortium which came second in the bidding, Telnet, led by Korea Telekom and Swedtel AB, a subsidiary of Sweden’s Telia group, said BPE deputy director Hassan Usman.
“The DG (el-Rufai) is briefing the president this afternoon to avail him of all the options,” Usman said.
“We are starting negotiations with Telnet on Tuesday in the event that the preferred bidder (IIL) refuses to pay we will have a second option to fall back on,” he said.
The government last week announced that it had chosen a $1,3-billion bid by IIL which came in just ahead of a rival bid by the Telnet consortium to take a majority stake in the Nigerian firm.
The scales of the bids, with three consortiums putting in offers of between one billion and 1,3-billion, surprised telecoms analysts who questioned how they could be financed.
If the deal does finally go through, it will be Africa’s largest privatisation, officials said.
Mark Tomlinson, the representative in Nigeria of the World Bank, said last week it was important the deal went through and that the privatisation process continue.
“This is an immensely important step for Nigeria, and for Africa, and it is important that, if there is a hitch, we get over it, quickly, and in an open and transparent way,” he said in Abuja.
“Nigeria needs telephone lines, but more than that, it needs efficient, privatised utilities and companies, and if this does go ahead, it will be a major step and a major proof of willingness to carry through economic reform.”
Nitel, set up decades ago, has for years provided an abysmal level of service to Nigerian business and residential users and has deservedly earned itself a reputation as one of the world’s worst telecoms companies.
Under the deal agreed with the bidder, but yet to be signed, once ownership has passed to the new owners they will then have to manage the existing Nitel network, estimated at around 400 000-500 000 currently working lines, and roll out 1,4-million new lines over five years, as well as extending a new mobile network to 1,5-million new subscribers over the same period.