President Still Reviewing Manitoba TCN Contract

16 Nov 2012

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 President Goodluck Jonathan

Paul Ohia   and Chineme Okafor 

In a move certain to douse anxiety over the fate of the power sector reform and privatisation programme, President Goodluck Jonathan is still reviewing the management contract for the Transmission Company of Nigeria (TCN).

Confirming the new twist in the $23.7 million management contract, which was awarded to a Canadian firm, Manitoba Hydro International (MHI), last July, a source in the Ministry of Power said the ministry was yet to receive notification on the cancellation of the contract, but what they understood was that the president had ordered a review of the contract.

Also, Manitoba said Thursday  that although it had not received any official notice on the contract’s termination, it would seek for compensation from the government if it happens.

Chief Executive Officer of MHI, Mr. Don Priestman, who has been superintending activities of the firm at TCN, disclosed this in response to enquiries by THISDAY Thursday in Abuja.

An official of the power ministry said last night that the management contract might not have been cancelled as reported exclusively by THISDAY two days ago and was confirmed by the president’s Special Adviser, Media and Publicity, Dr. Reuben Abati, that same day when other media houses made enquiries.

He said the president had decided that the contract be reviewed by a team of experts, which will be concluded next week.

In a bid to prove that Manitoba had not been shown the exit, the official said that its chief executive was at the Presidential Villa yesterday to meet with officials in the presidency.
He explained that the review was being done to ensure that whatever irregularities that needed to be corrected in the contract are effected.

“The president is a stickler for procedure and the rule of law. So the review is being carried out to correct any irregularity that has been noticed in the contract,” he said.

The official added that the reason a review was being undertaken was to keep the power reform and privatisation programme on course.
“The president remains committed to the programme and will do everything to keep it on course.

“He is also aware that there are some interest groups and politicians who want to derail the process.

“But it must not be hijacked by these politicians whose sole aim is to sabotage the programme for their own selfish gains,” he said.

Priestman, however, informed THISDAY yesterday that although the government had not formally communicated its decision to cancel the three-year contract, the company would certainly ask for compensation from the government, if it communicates its position as reported in the media.

According to him, “At the moment, we have got no official word from the government on the contract cancellation and everything we know about it has been from media reports which is a heck of a way to do things.

“We have no official communication from the government up till now and until we get some official notification to that effect, I guess we will have to wait to know the government’s position.

“But I’m still in my office at the PHCN (Power Holding Company of Nigeria) corporate headquarters, which houses TCN and our telephone lines have been shut down. I cannot make official calls outside of here but rely on calls coming in.”
When asked to clarify the current position at the state-owned transmission utility as well as Manitoba’s position, Priestman said: “We have to wait to take a decision to either demobilise.

“But right now, we are in a limbo. We came here in good faith to do our job but the mood here suggests otherwise and we reckon that we are not in a fight with anybody; we just want to do our job.”

On the possible legal action that might be taken by Manitoba, Priestman said: “The decision is not in my hands but certainly we have got a case, we are owed a lot of money and we hope to ask for compensation if we are communicated of government’s position that the contract has been terminated.”

The Bureau of Public Procurement (BPP), for several weeks, has been pushing for the cancellation of the contract on the premise that it did not pass through due process as provided under the Public Procurement Act.

Its Director General, Mr. Emeka Eze, had written a memo to the president recommending the contract’s termination and that the BPP be allowed to appoint a new contractor within 30 days, after it had been furnished with five names by the Bureau of Public Enterprises (BPE).

But the president had approved that the power ministry undertake the job of appointing a new company to manage TCN within 30 days.
It is believed that he may have reviewed his decision to get the power reform programme back on track.

In a related development, it has emerged that it was a petition by the Power Grid of India, which faulted the process by which Manitoba emerged as the preferred bidder to manage TCN, that triggered the chain of events that led to the contract’s review by government.

THISDAY discovered yesterday that Power Grid had written to BPE alleging that Manitoba’s selection was done before the financial bids were opened, a decision they saw as not being in conformity with the rules set out by the BPE.

Of the four firms that had expressed interest in managing TCN in 2007, Manitoba and Power Grid were the only two that had their bids prequalified when the process to select a management contractor for the transmission was restarted by the BPE in 2010.

The Indian company contended that it had won the bid in a rigorous exercise conducted in 2007, which made it the preferred bidder for the transmission company.

By yesterday, THISDAY learnt that the company was warming up to convince government officials of its readiness to manage TCN.

The management contract was signed between the BPE, on behalf of the Federal Government, and Manitoba in July, with a commencement date of September 1, 2012.

But owing to interference by officials in the Ministry of Power, the take-off of the deal was stalled, while the Canadian firm was prevented from effectively taking over TCN.

Tags: News, Nigeria, Featured, President, Manitoba, TCN Contract

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