Leadership (Abuja)

20 November 2012

Nigeria: U.S.$23 Million Manitoba Contract - How Canadian Govt Forced Jonathan to Make U-Turn

Photo: Vanguard
Electricity in Nigeria

Pressure from the international community, especially the Canadian government, as well as from preferred bidders for the electricity generation companies forced the presidency to reverse itself on the cancellation of the $23 million transmission management contract awarded to Canadian firm Manitoba Hydro International, LEADERSHIP findings have revealed.

It was learnt that the Canadian ambassador to Nigeria had discussions with the minister of finance, Dr. Ngozi Okonjo-Iweala, Vice President Namadi Sambo as well as President Goodluck Jonathan at separate meetings where he was said to have expressed his country's displeasure over the development.

Although details of the meetings could not be obtained, sources within the presidency told LEADERSHIP that the Canadian ambassador told President Jonathan that the Canadian government was unhappy with the issue and may be reluctant in supporting Nigeria in other sectors due to the way Manitoba has been treated.

It was also gathered that Atedo Peterside, who is the chairman, Technical Committee on Privatisation, and member of the National Council on Privatisation (NCP), similarly advised the president against the decision.

According to the source, Peterside expressed concern that if Manitoba's contract was cancelled, it meant all efforts that had so far been put into the privatisation process would have been in vain.

It was further learnt that the preferred bidders for the generation companies who didn't want the privatisation process to be jeopardised also worked from the background to mount pressure on the presidency.

"Winners of the distribution companies would be kept on tarry-a-while if we allowed them to cancel Manitoba's contract. Because when will they do another procurement for transmission management? People will advise you not to even put your money down because you do not know who will manage the transmission," a source told LEADERSHIP. "We told them that we will not go ahead with making bid payments if they cancel Manitoba's contract because we do not know who will transmit the power we will generate. "

Lamenting the whole drama over Manitoba's contract cancellation and reinstatement, the presidential source who did not want to be named because of the nature of the matter alleged that the presidency acted based on hearsay.

He explained that Manitoba was shortlisted in 2007 and given the contract in 2012 but people are now saying the process was manoeuvred just to run down the director-general, Bureau of Public Enterprises (BPE), Bola Onagoruwa, thinking she was the one who arranged for Manitoba to emerge winner, whereas she inherited the process.

"When in 2006 the contract management of the Transmission Company of Nigeria (TCN) was advertised, nobody took it seriously. Nigerians were mocking us, saying the privatisation would not work.

The source told LEADERSHIP that some powerful Nigerians are behind the Power-grid Corporation of India and are trying to frustrate the whole process. "They are the ones behind the whole conspiracy," he said.

Meanwhile, the federal government yesterday announced its decision to revoke the concession of the Lagos/Ibadan expressway awarded to Bi-Courtney Consortium in 2009 on grounds of what it described as serial breaches of the concession agreement by the construction firm, specifically its failure to meet up with the financial close agreed upon.

Minister of works Architect Mike Onolememen, who gave this hint while briefing State House correspondents alongside the minister of state for works and special adviser to the president on media and publicity Dr. Reuben Abati said his ministry had already awarded a fresh contract on the reconstruction of the road to Julius Berger and RCC respectively.

He said: "The federal government today terminated the concession of the Lagos-Ibadan expressway granted to Bi-Courtney Consortium on 8th May, 2009, the concession agreement of which was signed by the parties on 26th May, 2009.

"The termination of the concession is consequent on the serial breaches of the concession agreement by Bi-Courtney Consortium and especially the failure of the company to reach financial close as provided for in the agreement.

"Due to the senseless carnage on this important expressway which is part of Arterial Route A1, the federal government has also decided to embark on the emergency reconstruction of the expressway. Consequently, the Federal Ministry of Works has engaged the services of Julius Berger Nigeria PLC and RCC Nigeria Limited to commence work immediately on the construction of the expressway.

"While Julius Berger would handle section 1 from Lagos to Shagamu interchange, RCC Nigeria Limited will be responsible for section 2, from Shagamu to Ibadan."

On the legal implication of terminating the contract, Onolememen said: "The legal implications of this termination have been carefully considered by both the Federal Ministry of Works and indeed the federal government. If you recall, we have been on this issue for quite sometime now and we have meticulously followed the concession agreement, the provision of relevant clauses of the agreement.

"We have complied fully with the provisions of this agreement. We have had cause even in the past to write the concessionaire to detail the breaches which it had committed in this agreement, in this particular transaction, and we have also followed the minimum and maximum number of days the contractor was expected to remedy the situation but failing which the federal government had no alternative but to take this course of action."

"For your information, under this concession the construction period is supposed to last for four years and the four years will come to a close in about six months' time and right now there is nothing on ground to suggest that the company is capable."

On whether giving the concession to Bi-Courtney was a mistake, he said: "I would not want to say that it was a mistake because though I was not in the office as at that time, perhaps at that time they had the most responsible bids. The detail is best known to the then minister of works and his team that handled the project. But, again, it is not out of place to give Nigerian companies opportunity to handle projects of this nature. This is our country; whoever has the ability and the capacity to do projects of this nature, we believe, should encouraged."

On the percentage of work done on the road, he said: "I will leave that for those who use the road. As far as we are concerned, the terms of work have not been complied with."

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