31 July 2016, Abuja – The federal government has resumed the management of Transmission Company of Nigeria (TCN), following the completion of a four-year management contract by Manitoba Hydro International (MHI), Canadian power firm.
THISDAY gathered yesterday in Abuja that MHI finally handed over the affairs of TCN to the government on Friday, having failed to secure an extension in its management contract for the TCN, which it signed in 2012.
Manitoba Hydro, THISDAY learnt, finally handed over TCN to Nigerian officials who had been deputising for the foreigners since 2013 in an understudy kind of capacity.
While the paper could not confirm if the current management arrangement would be an interim one, the outcome of its inquiries showed that Abubakar Tambuwal Atiku, hitherto deputy managing director of TCN, T. O. Uwah, director, Transmission Service Provider (TSP); and M. M. Gumel, director, System Operator and Market Operator (SOMO), replaced Mark Karst, Shahid Mohammed and Dipak Sarma, respectively, as managing directors.
While sources in TCN and power ministry confirmed the development to THISDAY, a request for further information on what the situation was with the government’s final settlement with MHI did not get a response from the ministry.
THISDAY placed the request before Hakeem Bello, the Senior Communications aide to the Minister of Power, Works and Housing, Babatunde Fashola, but he did not respond as at the time of filing this report. Bello, who told THISDAY that he was out of the country with Fashola on an official assignment and would provide the requested information, never did.
Last week, THISDAY exclusively reported that the government was not interested in renewing MHI’s contract at TCN.
The contract, which expired today, was first signed between both parties in 2012 for a base period of three years. It expired in 2015 and was renewed for another term of one year by the government to push it further to July 31, 2016.
THISDAY also learnt that the government, which preferred that Nigerians take over from MHI, had equally sidestepped suggestions made to it by the Bureau of Public Enterprises (BPE) on the way forward for TCN.
BPE, according to documents sighted by THISDAY had written to the government requesting that a proactive and quick decision be taken on TCN before the July 31 expiration of MHI’s contract.
These documents explained that the BPE in March 2016 suggested to the government two possible types of concession arrangements that it could adopt to keep TCN in stable operation if MHI’s contract will not be extended.
The privatisation agency, which initially procured MHI for TCN had suggested that the TCN be concessioned to a private operator, who will be responsible for operating and investing in the network, and with utmost responsibility for effective operation and recovery of investments.
It also proposed in the alternative that a private investor be handed over the network to operate, maintain and complete existing projects at the point of entry but that subsequent projects for system expansion should be batched and subjected to competitive bidding on a build-operate-maintain-transfer basis.
The latter proposal, THISDAY learnt could eventually lead to the evolvement of the Transmission Service Provider (TSP) arm of the TCN into regional units under different operators.
BPE also asked the government to consider extending MHI’s contract by another year, but series of petition against MHI, as well as alleged opposition to their continued stay ensured the proposal did not fly.
Sources within the industry explained to THISDAY that these proposals were tabled before the government some five months ago.
Also, another source disclosed that a reported proposal by the China State Grid to invest, operate and transfer the transmission network back to the government within an agreed timeframe was overlooked.
This proposal, THISDAY learnt, had been on the table for long and could attract billions of dollars investment into the transmission grid to expand its capacities rapidly.
THISDAY also reported that the government’s takeover of the TCN could put about $300 million proposed funding arrangement for the transmission network by the World Bank in line because the bank, it was understood, would not be too forward to release such fund to TCN under government’s sole management.
- This Day