Mohammed: How 800 Containers of TCN’s Transformers Got Trapped at Seaport

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For many years, up to 800 containers of electricity transmission equipment belonging to the Transmission Company of Nigeria were stuck at seaports in Nigeria. And for that long, the TCN, according to its Managing Director, Mr. Usman Mohammed, who spoke in an interview with Chineme Okafor, could not go on with the transmission projects it initiated to expand access to electricity in Nigeria. Providing details on how this came to be, Mohammed however discloses that about 693 of such containers had been recovered and taken over by the TCN. Excerpts:

What is responsible for the recent industrial dispute at the Transmission Company of Nigeria (TCN)?

Last year, the national branch of the SSAEAC (Senior Staff Association of Electricity and Allied Companies) wrote me and said they wanted their president to be the General Manager of Lagos. We had anticipated the vacancy in Lagos and conducted an interview in this regard. Six of them participated and this person – Chris Okonkwo (SSAEAC president) – came last in the interview, but he insisted I have to appoint him the GM Lagos and said I couldn’t do that because he is very divisive and if I appointed him as GM Lagos, there will be problems considering that we have two associations – SSAEAC and NUEE (National Union of Electricity Employees), and NUEE will not agree.

Secondly, Lagos controls between 30 and 35 per cent of our transformers and you cannot just take anybody there. You have to appoint a well-organised person there if not, you will create problem. They however insisted that I have to appoint him, but we eventually agreed that I will appoint him GM, Material Control and posted him to Lagos but this didn’t go down well with him and he went on with fights.

He also said my tenure has been without any success, but the TCN branch of SSAEAC that work with me here and did most of the jobs kicked against him because they felt bad and denounced his claims. He unilaterally suspended the TCN branch and the branch wrote to me on this to state that their suspension was illegal and made claims he had abused his office several times by illegally appropriating their check off dues. We intimated the Ministry of Labour and suspended transferring the check off dues of the workers to the union until they sort out their disagreements. He also set off the security agency against his members and we investigated and found him guilty of that and then issued him a query. The response we got from him was the rented crowd he got to protest against us and which you saw, but none of them is a staff of the TCN.

But the protesting crowd or workers made strong allegations against your management?

We are not surprised at the claims made by the rented protesters and this is because we have cancelled so many contracts. We have cancelled many and even in the last two months we have cancelled about four of them. I’ve cancelled the one in Damaturu, Wudil, Walalembe, Dambata, Yawuri and many others. I cancelled the contracts because they were not performing. Why should I leave them to continue to hold the contracts? Look, some Nigerians make this place their farm and continue to collect money on every appropriation, which shouldn’t be. But how can we have stable power supply with this kind of arrangement. Most of the contract we cancelled, we completed them at the rate of 10 per cent of their original cost.

Specifically, the union alleged that you moved the containers you recovered from the ports to unknown destinations, is this true?

All the contracts that are issued here are supply and installation contracts that are meant for specific locations. How do you take transformers from Apapa port for instance to the TCN store? The cost of offloading and unloading will run into millions, and so all the transformers we are talking about have been transported to their installation points and some of them have been installed like that of the Enugu-Onitsha line. We also changed our procurement process to reflect our decision to move away from the past.

How did the TCN even get to have up to 800 containers of transmission equipment stranded in the port?
All the original equipment manufacturers want to do business in Nigeria but don’t want to participate in the installation. They will sign contract with a Nigerian firm and bid for projects. If the main joint venture is qualified and the agreement is signed, the original equipment manufacturer will get their payment under LC (Letter of Credit), ship the equipment to Nigeria and the local party will not clear the equipment in the ports. That was how we had 800 containers in the port when I came in.

As at last month, we had cleared 693 containers and I can give you all the locations we have dispatched them to and that is how the unions are mischievous because they know the contracts were supply and installation in nature. We also negotiated the demurrage for the containers.

How much was negotiated?
Several billions were negotiated by the minister. He negotiated 70 per cent payment and we are paying them 25 per cent demurrage. Some of them have even been auctioned by the customs and we must follow the people that they auctioned them to and buy them off. So, the union cannot say they didn’t see them in the store.

Your office was also recently closed by the FIRS, why was that?
The FIRS did an assessment some years ago before I came to the TCN and they came up with a number that TCN is owing them N30 billion. Now if you look at the N30 billion claim, it includes what we call legacy liabilities. But now the government is taking steps to take over this liability which was there before the sector was privatised. Also, we have constituted a committee to look into this as well.

However, one of the problems that we have about this amount that they have against TCN is that they took our projected revenue and reached conclusions. But this cannot hold in the power sector because what we get as revenue at TCN is less than 40 per cent of our revenue. That is because the Discos don’t pay. So, one element is the legacy liability and the second element is this bogus calculation based on what they think is our revenue. Yes, our revenue is there, but we cannot collect it.

Did they know this, did they know you’re not getting your due revenue?

We have hired a consultant to reconcile this and we wrote to the FIRS to let them know about this. I don’t know what FIRS want to achieve with this because there was no notice to us that they want to lock our office and our consultant has just started work. As we speak, the TCN is not owing the FIRS because it is for us to sit down and reconcile given the fact that there is nobody in Nigeria that does not know we have liquidity crisis in the power industry and you cannot sit down and calculate your tax based on our revenue because you know the revenue is not collected, but if they want to collect the revenue, they can go to the Discos and collect it.

Whether it is a script or whatever they want to achieve, it is up to them because if you look at the power sector, the TCN is the most vulnerable. Discos are collecting our money and give whatever they like, what I will call best endeavour basis. Generators are covered by payment assurance, but the only one that is not taken care of is the TCN and that is why we are the least paid in the industry.

So, we had to go to multilateral donors like the World Bank to raise money for the expansion of the network. But you know you can’t use this money for operation. You cannot go to the World Bank and get money for running your system. The money you can get is for the expansion of your network, for hard investments. They can’t give you money for running your operations. So, this is the situation.

Does the FIRS lock out mean anything to you – your credibility and operations?
We are sister-government agency. If the FIRS has anything against us, they are supposed to write to us and do reconciliation with us. We have appointed a consultant who has written them, why would they not engage the consultant? Why would FIRS not give us a notice they want to lock our office, is that normal?
Every withholding tax is deducted first by us before we pay any of our contractors and if they don’t receive it, it is a matter of reconciliation. But maybe the FIRS want to collect tax and supply electricity that is why they locked our office. What we are doing to improve power supply in the country is enormous. We have installed more transformers to improve power supply and economic activities, it is the same FIRS that will benefit from this when people get more money and pay tax. If we don’t stabilise electricity they will get lower tax. This kind of action is bad. But we are now talking and doing reconciliation.

You’ve continued to have issues with supply in Maiduguri, what really is the problem?
You know Maiduguri is supplied from the 132kV line from Gombe-Biu-Damboa-Maiduguri, and that line is heavily constrained because it is old and a single circuit. It also passes through a Boko Haram prone area especially between Maiduguri and Damboe. Many times, they shoot and cut the wire and we have written the military, but you know this cannot stop especially when they are chasing the terrorists. Now, we don’t have an issue there, but on consistent basis, we have the problem and must always re-string the line when it is cut.

We have a 330kV line from Gombe to Damaturu to Maiduguri and a 330kV in Maiduguri and Damaturu, but the Maiduguri substation has been completed and would have solved the problem of that area, but it cannot be energised until Damaturu is energised because Damaturu is a turn-in-turn-out line and the contract of Damaturu which was signed in 2006 has not been completed. We decided to cancel the contract three months ago.

All the contracts we cancelled in the past we have completed them because our TCN engineers complete work at record time. We finished Kukuaba in few days even though it had lasted for 10 years; we finished Katsina-Daura in few years, as well as Wudil. That is what we are doing all over the country even in islands like Ilase in Lagos.

Anyone we have problems like that we have to take over and have taken over the Damaturu contract. We hope that we will finish that in two months so that we can have the economic activities of that area back.