TCN Boss: How Manitoba Failed in Its Management Contract

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By Chineme Okafor in Abuja

Recent disclosures by the interim Managing Director of the Transmission Company of Nigeria (TCN), Mr. Usman Gur Mohammed, on how Canadian firm, Manitoba Hydro International (MHI), ran its management contract with the federal government on TCN have indicated that the firm failed in its contract to reinvigorate the TCN and pull it out of inefficiencies.

Mohammed, in a presentation he made in one of the technical sessions at the just concluded National Council on Power (NACOP) which held in Jos, capital of Plateau State, explained that instead of repositioning the TCN, MHI left the transmission company worse than it met it.

He said within the four years of MHI’s management of TCN, the company witnessed a sharp rise in its top level workforce, in addition to a procurement process that was far from meeting standard procurement practices.

Following the privatisation of successor generation and distribution companies of defunct Power Holding Company of Nigeria (PHCN), the government in line with the power sector reforms, contracted MHI to manage the TCN for an initial period of three years.

The contract which was first signed between the government and MHI in 2012 for a base period of three years, expired in 2015 and was subsequently renewed for another term of one year before it eventually expired in 2016, and not renewed.

But speaking on his experience since taking over the TCN, Mohammed who was recruited from the African Development Bank (AfDB) by the government, stated: “Three of the key findings of the change management consulting we did for TCN in 2005 were that TCN had too many non-technical staff, TCN has aging workforce at that time, and TCN was top heavy – when we say top heavy, we mean it has too many general managers vis-à-vis the working the staff.

“At that time, TCN had 10 general managers and two executive directors, but when we came in now, we inherited TCN with 46 general managers and 134 assistant general managers.

“What does that mean, it means the organisation that had 10 general managers and it was described as top heavy has been transformed into 46. It used to have 11 assistant general managers, but the situation was worsened by the management contract of the Manitoba Hydro.”

He however stated that his management was beginning to reverse this, and has now reduced the number of general managers from 46 to 25, and 134 assistant general managers to less than 50.

“The strategy we are using is that we are not telling anybody who is a general manager to go, what we are doing is that anybody who retires and that position does not exist, it will not be filled, that is it,” Mohammed added.

He also said that MHI did not audit the accounts of TCN all through its tenure, and that the procurement process used during the period was far below acceptable standards.

According to him, “Throughout the four years of Manitoba Hydro contract management of TCN, there was no single audit of TCN, it was when we came in that we mobilised and within a month and half, we submitted the audit report of TCN from 2012 to 2014, and after another two months we submitted 2015, and about to submit 2016. We are also in process of recruiting auditor to audit 2017.

“We removed the general manager procurement and called BPP (Bureau of Public Procurement) to train people on procurement because what they were doing was to eliminate people they don’t want and give to people they want.

“They form a committee of five people and select people they wanted, but as I speak with you now, the TCN has up to 10 staff who are in America undergoing trainings on procurement – this is the continuous capacity training we are doing.”

Following TCN’s struggles with funds to manage its operations and expansion plans, Mohammed explained that it has made a request to the Nigerian Electricity Regulatory Commission (NERC) for an extraordinary tariff review, and which the NERC has accepted.

“TCN finances that we met is less than 40 per cent of our imprest that we get, but we need finance to expand. We have made a case for extraordinary tariff review to NERC and they have accepted, hopefully we will get it and use to expand,” he said while noting that the company has also reviewed its project monitoring mechanism to drive efficiency in projects’ delivery.

Similarly, he disclosed that an investment appraisal study done by the TCN on the 11 distribution company (Discos) networks, showed that they would need a total of $4,262,816,005 worth of investment on feeders and injection substations to bring their capacity up to parity with that of the TCN.

The Discos, he explained would need $3,747,262,289 for feeders, and $515, 553717 for injection stations.