TCN Files N300m Counter Claims against Cartlark for Alleged Contract Default

  • Ends contract variations, gets NERC’s approval of spinning reserve tariff

Chineme Okafor in Abuja

The Transmission Company of Nigeria (TCN) at the weekend in Abuja disclosed that it has filed a N300 million counter claim in the law court against Cartlark International Limited for allegedly failing to repeatedly execute the transmission contract awarded to it in 2006.

The TCN said that the firm was in 2006 awarded the contract to build its Damaturu/Gombe 330/132kv transmission substation and line bay extension, and was adequately paid for the job, but it failed to complete the job within the agreed project time frame and subsequently took it (TCN) to court 12 years after it tried to retrieve the project from the firm.

TCN’s Managing Director, Mr. Usman Gur Mohammed, told journalists on the sidelines of a dinner the company held for past senior management staff of defunct Power Holding Company of Nigeria (PHCN) that while Cartlark sued it, it subsequently filed a counter claim against it and was praying the court to grant it a compensation worth N300 million.

He noted that the TCN had however completed and energised the transmission substation after it retrieved it from Cartlark.

Mohammed, who explained that the dinner was set up to get valuable advice from past senior staff of the PHCN on how best to implement its Transmission Rehabilitation and Expansion Programme (TREP), noted that it has equally stopped contract variations in which case project terms are altered mostly on occasions when contractors do not meet up with agreed timelines.

“Those contracts actually have expired – contracts for supply and installation of 330kv substations are supposed to last for about 18 months – those contracts, particularly the one in Damaturu was awarded in 2006 which is about 12 years and has expired,” Mohammed said.

He further stated: “We don’t cancel non-existent contracts, but write to tell them that the contracts have expired and we are not willing to extend them. The person (Cartlark) decided to go to court and we followed but we know there is no case because a court cannot force you to extend a contract that is non-existent, and that is the reason why the contractor is unruly.”

Speaking on the reason the TCN changed its contracting model in which contract variations are now off, he said: “The problem we have is that we awarded contracts to incompetent companies which is why I told you that we have changed the way we do them now. Most of our major contracts now require prequalification and tender so that this kind of problem that we have will not continue.

“Some of the contractors are not very difficult and we work with them to complete the job and we pay them what we owe them. But if it is a contractor like that of Damaturu, we have to exercise our rights under the contract because the contractor refused to allow us access to the substation.

“We have so many of these bad contracts scattered everywhere, and we have stopped variation on these contracts.”

He noted that the Nigerian Electricity Regulatory Commission (NERC) has approved its proposed tariff for a spinning reserve, adding that the evaluation report for the about 300 megawatts (MW) spinning reserve would be ready within two weeks.

Mohammed provided an update report on the number of TCN containers of transmission equipment that have been recovered from people who they were auctioned to because the TCN could not clear them from the port, and said in the last one week, the number had risen to 699 from 693. He noted that the total was 800, indicating about 101 were yet to be recovered.

“All the containers that came in since I came have been cleared. The ones we are talking about now are those that were procured in the past,” he noted.

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