Manitoba Hydro offers $23.7m for TCN management contract

*Deal is desirable for country – Govt

Oscarline Onwuemenyi

03 April 2012, Sweetcrude, ABUJA –
The Federal government has hailed the completion of the bid process for the management of the Transmission Company of Nigeria which, after about five years of rigorous bidding process, was won by Manitoba Hydro International of Canada at a negotiable fee of $23.7 million for three years.

The company’s financial bid to manage the TCN which was opened yesterday in Abuja by the National Council on Privatisation, NCP, in collaboration with the Bureau of Public Enterprises, BPE, marked a major breakthrough in government’s bid to get competent firms to manage the 18 successor companies carved out of the PHCN.

Director General of the BPE, Ms. Bolanle Onagoruwa, said Manitoba came top in the Quality and Cost Based Selection (QCBS) method of the World Bank used for the transaction.

Onagoruwa noted that the National Council on Privatisation, NCP, had at its second meeting for 2012 which was held on March 26, 2012 at the Presidential Villa, Abuja, approved that Manitoba Hydro International, which alone exceeded the pass mark for technical score, be invited for simultaneous opening of its financial proposal and the commencement of contract negotiations as the management contractor for TCN.

According to her, the formal opening of the financial bid would enable the government to negotiate the contract fee and other terms of the deal with the company, adding that as part of government’s efforts to facilitate further negotiations with the management of the company, the NCP had approved the constitution of a six-member team to negotiate on its behalf.

Specifically, she listed the objectives of the multi-million dollar management contract to include, reduction of electricity losses during transmission; provision for the achievement of certain pre-determined targets that would improve grid security and integrity and general performance; having reward and penalty clauses as incentives for success and provision of efficient management for government investments.

Others are, ensuring adequate and equitable generation dispatch according to a fair merit order based on sound regulatory principles, ensuring fair market settlements between electricity traders; and provision for skills and expertise transfer to Nigerian counterparts who will serve in deputy and other positions to the management staff of the Management Contractor.

In his remarks at the occasion, Minister of Power, Professor Bart Nnaji, described the deal as a desirable one that would further help the realisation of the power sector reform agenda of the government.

The Chairman of Senate Committee on Privatisation, Senator Olugbenga Obadara, and Chairman House of Representatives Committee on Power, Honourable Patrick Ikhariale, advised the management of the Canadian company led by Mr. Lorne Halpenny to learn from the mistakes of past in the privatisation programme by ensuring that they deploy the technical and manpower resources at the company’s disposal to ensure improved electricity supply in the country.

The TCN is one of the companies scheduled for Management Contract deal to transit it into a financially sustainable, self-sufficient and market-driven player in the power sector.

Manitoba, which is the electric power and natural gas utility in the province of Manitoba, Canada currently operate 15 interconnected generating stations and has more than 572,000 electric power customers and over 263,000 natural gas customers. Its world-class technical and organizational capabilities have enabled it to perform power sector works in over 60 countries.

Within Manitoba Hydro’s system, there exists a total of 9,089 km of transmission lines throughout the province of Manitoba, spread across a wide variety of physical terrain, including swamps, permafrost and bedrock.
TCN is one of the eighteen successor companies carved out of Power Holding Company of Nigeria (PHCN.) It 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.

Following unbundling, TCN emerged as one of the successor companies of PHCN and was scheduled for a Management Contract in order to transit the company into a financially sustainable, stable, self-sufficient and market-driven company.

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