Canada, India get BPE node for due diligence on TCN

Clara Nwachukwu

01 Janury 2012, Sweetcrude, Lagos –The Bureau of Public Enterprises, BPE has issued Requests for Proposal, RFP, documents to Manitoba Hydro of Canada and Power Grid of India to enable the firms prepare their bidding documents for the management contract for Transmission Company of Nigeria, TCN.

In a statement from the BPE, the two investors are presently undertaking due diligence on TCN and its network in order to submit their technical and financial proposals.

It would be recalled that the National Council on Privatisation, NCP, at its meeting in August 2010, invited the two companies to re-submit technical and financial proposals in line with current system and industry information for the management contract for the TCN.

The bureau also explained that “the technical proposals will be evaluated based on their transmission-loss-reduction, network improvement and capacity transfer strategy. The intent is to have a transmission company that will be capable of containing the anticipated changes in the Nigerian Electricity Supply Industry and Market.”

The objective of the management contract is to:

• Reduce electricity losses during transmission;

• Provide for the achievement of certain predetermined targets that would improve grid security and general performance;

• Have reward and penalty clauses as incentives for success;

• Provide efficient management of government investments;

• Ensure adequate and equitable generation dispatch according to a fair merit order based on sound regulatory principles;

• Ensure fair market settlements between electricity traders; and

• Provide for skills and expertise transfer to Nigerian counterparts who will serve in deputy and other positions on the management staff of the Management Contractor.

Manitoba Hydro is the electric power and natural gas utility in the province of Manitoba, Canada. Founded in 1961, it is a provincial Crown Corporation, governed by the Manitoba Hydro-Electric Board and the Manitoba Hydro Act.

The company presently operates 15 interconnected generating stations. It has more than 527,000 electric power customers and more than 263,000 natural gas customers. Since most of the electrical energy is provided by hydroelectric power, the utility has low electricity rates.

Power Grid Corporation of India Limited (Power Grid), on the other hand, is a Navratna state-owned electric utility company headquartered in Gurgaon, India. Power Grid wheels about 51% of the total power generated in India on its transmission network.

Power Grid has a pan-India presence with around 82,045 circuit-km of transmission network and 135 nos. of EHVAC & HVDC sub-stations with a total transformation capacity of 91,945 MVA. The inter-regional capacity is enhanced to 22400 MW. Power Grid has consistently maintained the transmission system availability over 99.00% which is at par with the international utilities.

TCN is one of the 18 successor companies carved out of Power Holding Company of Nigeria, PHCN, which combines the functions of a transmission services provider, a system operator and a market operator, all of which are central to the sustainability and development of the electricity sector.

It was scheduled for a Management Contract in order to transit into a financially sustainable, stable, self-sufficient and market-driven company.

For the purpose of procuring a management contractor for TCN, the BPE retained the services of British Power International, BPI, who were initially engaged by the PHCN to provide advice on the engagement of an Operation & Maintenance, OM contractor and other issues like the development of management information services and corporate governance procedures.

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