It appears BAT has found his voice and has recently stated his opinion on power generation among other pressing National issues however given the report from Forbes in 2004 is he one to talk?

Dan Ackman
9/20/2004 @ 10:45AM
Enron's Nigeria Barge: The Real Deal


A criminal trial will begin today in Houston to determine whether Enron executives conspired with Merrill Lynch bankers to fake an asset sale that allowed Enron to book profits while its executives boosted their bonuses.

The issue for the jury is whether the 1999 sale of an interest in Nigerian energy barges by an Enron entity to Merrill Lynch was a sham that allowed Enron to illegally book about $12 million in pretax profit, when in fact there was no real sale and no real profit.

Four former Merrill top executives and two former midlevel Enron officials face conspiracy and fraud charges. Merrill has cut its own deal, firing bankers and agreeing to the outside oversight of its structured-finance transactions, in addition to cooperating with the prosecutors’ ongoing investigation. It has also settled civil fraud charges brought by the U.S. Securities and Exchange Commission, without admitting or denying fault.

The trial is said to be important–despite the fact that it involves just one transaction among thousands–because it is a harbinger of the trials of Kenneth Lay and Jeffrey Skilling Jeffrey Skilling , among others, and because it will offer a window into the way Wall Street does business. This all assumes that Lay and Skilling will go to trial and that the trial starting today will be concluded without an 11th hour plea. But whatever happened to the barges?

While the $12 million in profit may be small, the barge deal was pretty big at one time, though the details remain obscure.

The idea, announced in 1999, was that Enron would build gas-fired power plants near Lagos. Estimated costs put the project at about $500 million. Before the main plant was built, Enron would start supplying power from three 30-megawatt barge-mounted plants burning either oil or gas, according to a 1999 article in Global Power Report, citing an Enron spokesman. The barges were to begin operation as early as the fall of 1999, though plans had not been finalized. The initial report was that Enron would begin construction, probably in the first half of 2000, and complete the project in 22 months.


For Nigerians, the project was important because, though Africa’s largest nation is rich in energy resources, it faced persistent power crises and blackouts.

By September, the cost estimate for the new power complex was up to $800 million. Enron was committed to financing it and to installing an associated 175 mile-long, 24-inch diameter, offshore natural gas pipeline to supply the plant.

By February 2000, apparently before any construction, the deal was already facing political problems, according to Global Power Report. The contracts were called into question by the World Bank, Nigeria’s national utility, the National Electric Power Authority and other Nigerian states. The World Bank reportedly said the deal should have been competitively bid and that the final contract was overly favorable to Enron.

Even before anything happened in the way of supplying energy, Enron was selling pieces of its deal to Merrill Lynch. That transaction and Merrill’s quick sale of its interest back to an Enron-related entity is at the heart of the criminal allegations.

In early 2001, AES said it had purchased a majority interest in the Nigerian energy barges for a total investment in the business of $225 million, including investment from the project’s minority partner, the Nigerian conglomerate Y.F. Power. Seven had already arrived in Nigeria, while the other two were being upgraded at a Mississippi shipyard.

Enron would declare bankruptcy less than a year later. But Arlington, Va.-based AES has managed to push the project forward. In announcing a financing deal for the project earlier this month, the company said the barge project now produces approximately 8% of Nigeria’s power supply.

http://www.forbes.com/2004/09/20/cx_da_0920topnews.html

Hmm

..... Uncle Zuma

Enron the biggest fraudsters of all time.
This was part of the mega city plan that Lagos would create and manage its own energy source but the FG vetoed it.

Good thing though as Enron would never have delivered.

I don't understand world bank's role here however, why were they against the project? Why didn't the work bank warn the public about Enron's schemes considering they had help from the financial sector