Saturday, December 5, 2009

NITEL Sale Faces House Probe

Nigeria's House of Representatives has finalised plans to investigate the privatisation process of ailing incumbent telco Nigeria Telecommunications (NITEL) and its mobile unit M-Tel, local newspaper This Day reports. The committee has reportedly submitted a proposal calling for a public hearing on the state of affairs of the company in the wake of three failed attempts to privatise it in the past, and current efforts in finding a new core investor which has been characterised by delays.
According to head of the committee, Abass Buraimoh, the planned investigation is aimed at adding value to the current efforts to sell the company. 'Every effort must be made to ensure the successful privatisation of NITEL this time around, because [the company] is currently in a very bad operational state. Workers are owed over 15 months' salaries. There are huge outstanding liabilities that are mounting daily since little or no revenue is being earned to resolve them according to the Bureau for Public Enterprises (BPE),' Buraimoh noted.
The federal government sold its 51% stake in NITEL to local company Transcorp for USD750 million in November 2006, retaining a 49% interest. In February 2009 Transcorp agreed to divest part of its shareholding in the telco and the following month the BPE announced it was offering a 51% stake in the fixed line operator and 100% of its mobile unit. In early October the BPE extended the deadline for the submission of technical and financial bids from 2 October to 26 October due to the complexity of the process. The successful bidder is now expected to be announced in January 2010.

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