14 November 2012

Nigeria: Privatisation Twist - FG Cancels Transmission Company's Contract

Photo: Leadership
Electric transmission lines

There were strong indications late yesterday that the contract for the management of the Transmission Company of Nigeria (TCN) which was awarded to Canadian firm, Manitoba Hydro International has been cancelled.

Manitoba Hydro was contracted at the sum of $23 million for a three year period for the turnaround management of the TCN as part of government reforms in the power sector. The contract took effect on September 1, 2012.

Sources at the Presidency told LEADSERSHIP last night that the contract was allegedly cancelled because the process followed by the Bureau of Public Enterprises (BPE) in selecting Manitoba Hydro for the contract was flawed.

It was also gathered that the Ministry of Power may be directed to conduct another procurement exercise within a month for new managers of the TCN. It was further learnt that the federal government has planned to invite the five pre-qualified bidders for the TCN back to the table for another bidding process.

Meanwhile sources alleged that the Indian competitors of Manitoba Hydro may have used their political contacts to pressure the federal government to terminate the contract and conduct another bidding process where they can possibly emerge winners.

According to experts the development may spell doom for the sectors privatisation as bidders for the generation and transmission companies may be reluctant to make further financial commitment as they are not sure of who will transmit the power they will generate.

A source who did not want to be named told LEADERSHIP that "investors may scare away from making further commitment to the privatisation, because they are not sure who will transmit the power they will generate since they cannot trust government run agency with the transmission. The privatisation may not happen as soon as expected, it is unfortunate," the source lamented.

The Chief Executive Officer (CEO) of Manitoba Hydro, Mr. Don Priestman, had recently disclosed to journalists in Abuja that two months into the commencement of their contractual agreement with the federal government for the management of the TCN, they were yet to receive a "Delegated Authority" to begin work at the company.

Meanwhile, The federal government yesterday gave what it described as tax relief to certain categories of businessmen in a bid to surmount the obstacles confronted by manufacturers in the country.

This was the outcome of an extraordinary meeting of the Economic Management Team (EMT) presided by President Goodluck Jonathan at the first lady wing of the presidential villa, Abuja

The meeting which had president Jonathan who most often does not attend the EMT in attendance last for over 8 hours from 10am, with representatives of Manufactures' Association of Nigeria (MAN) present.

Speaking to State House Correspondents after the meeting, President of MAN, Kola Jamodu who hinted that federal government has resolved to grant tax relief to certain categories of businessmen said power supply is improving across the country even, though the situation is not perfect yet.

Stating that some manufacturers were still generating their own power, Jamodu said, "Truly, the power situation is improving and manufacturers are benefiting from it. As for our members who are still producing their own power, the Federal Government has agreed to give them tax relief to cushion the effects of the power situation which is not perfect yet.

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