FG Unlikely to Renew Manitoba’s Management Contract with TCN

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 • W’Bank may withhold $300m funding to transmission grid

By Chineme Okafor in Abuja   

With just seven days left to the expiration of the management contract between Canadian power firm, Manitoba Hydro International, and the Transmission Company of Nigeria (TCN), THISDAY has learnt that the chances of a contract renewal for Manitoba are slim.

It was gathered that the government has openly expressed its preference for the non-renewal of the contract to TCN and other critical stakeholders and agencies in the sector.

A reliable presidency source disclosed this to THISDAY yesterday in Abuja. He said there are possibilities that the transmission company might be returned to government management the way it was before its handover to Manitoba in 2012.

The source also said that the government might have decided to ignore the recommendations made by the Bureau of Public Enterprises (BPE) through the Office of the Vice-President on the options available to government in the event the Manitoba contract is not renewed.

He added, however, that up to $300 million of a proposed funding arrangement for the transmission network from the World Bank could be in jeopardy because the Bank had expressed reservations about releasing the funds if the TCN reverts to government control.

Another reliable industry source equally informed THISDAY that a proposal made by China State Grid to invest, operate and transfer the transmission network was also overlooked by the government, which he said was working towards the takeover of TCN from Manitoba and running it, despite the government’s abysmal track record in the management of the grid prior to the management contract.

Already, there have been a series of petitions against Manitoba suspected to have been sent by power ministry officials and ex-PHCN workers, with some putting pressure on the government not to renew the management contract.

The first contract with Manitoba expired in 2015 but was renewed by the government for another year and will expire on July 31.

THISDAY, however, gathered that the BPE had written to the government requesting that a proactive and quick decision be taken on TCN before the July 31 expiration of the contract.

Documents sighted by THISDAY showed that the BPE in March 2016 made suggestions to the government on two possible types of concession arrangements that could be adopted to keep TCN in a stable condition if Manitoba’s contract is not extended.

The BPE, according to the documents, recommended that the TCN be concessioned to a private operator who would be responsible for operating and investing in the network.

As a second option, the privatisation agency also proposed that a private investor be handed the network to operate, maintain and complete existing projects at the point of entry, but subsequent projects for system expansion should be batched and subjected to competitive bidding on a build, operate, maintain and transfer basis.

The latter proposal, THISDAY learnt, could eventually lead to the transition of the Transmission Service Provider (TSP) arm of the TCN into regional units under different operators.

BPE, it was further gathered, equally asked the government to consider extending Manitoba’s contract by another year, meaning the BPE would immediately issue a notice of intention to renew the Canadian firm’s contract, which would give the government more time to decide on its preferred transaction for TCN.

According to one of the sources, the proposal was made five months ago, but the government has paid scant attention to the matter.

“It’s as if TCN does not exist, the government just ignored it, and this is not good for the sector,” explained a source who was clearly frustrated by the inaction of the government

He added that the proposal by the China State Grid would have attracted billions of dollars in investment to the transmission grid and its capacity rapidly expanded but this was also shot down.

Already stakeholders in the power sector have expressed discomfort with the situation in TCN, which is considered to be the weakest link in the power supply value chain.

Sunday Oduntan, the Executive Director of Association of Nigerian Electricity Distributors (ANED), expressed the displeasure of the electricity distribution companies (Discos) with TCN’s operations.

Oduntan said: “I will like to plead with the federal government to do something about TCN. The electricity we supply depends on whether the power is generated and transmitted.

“For example, Kano Disco is entitled to eight per cent of electricity generated daily but Kano has never gotten over five per cent because TCN does not have the capacity to wheel the power from point of generation to Kano.

“If people don’t have power supply in Kano, they blame Kano Disco, but it is not their fault because the transmission infrastructure needs to be expanded so that they can wheel out what is generated.”