21 November 2012

Nigeria: BPP Backs Down, Finally Ratifies Manitoba Contract

Photo: Leadership
Electric transmission lines

Abuja — Following a hard battle and tough negotiations that lasted till Monday night, the Bureau of Public Procurement (BPP) finally sent a letter to the Bureau of Public Enterprises (BPE) tuesday morning ratifying the Manitoba Hydro International management contract to run the Transmission Company of Nigeria (TCN) for three years.

With the ratification given by the BPP, the BPE was said to have promptly sent a memo to the presidency for the contract's final approval.

But THISDAY learnt that despite President Goodluck Jonathan's directive last Thursday that the Manitoba contract be brought to him yesterday for validation before he left the country for Pakistan last night, officials in the Ministry of Power and BPP over the weekend and on Monday still made a last ditch attempt to frustrate the contract.

A presidency official, who opened up on the battle of wits between the BPE and Manitoba, on one side, and BPP and the power ministry on the other, disclosed that the Director General of the BPP, Mr. Emeka Eze, threw the first gauntlet when he insisted that the scope of the contract be reviewed and the contract fee revised downwards by $1,419,124 to bring the contract sum to $22.3 million.

But this was rejected by Manitoba, which insisted that the fee had already been negotiated downwards with the BPE before the execution of the contract and that it had applied its global rates that it charges for similar jobs in other jurisdictions to arrive at the fee.

The presidency source said: "Eze had insisted on reviewing the scope of work and contract fee by $473,041.33 per annum, translating to a reduction of $1,419,124 for the duration of the three-year contract.

"But Manitoba kicked against it as a matter of principle, insisting that it shall not accept a lower fee because it had already been negotiated and a valid contract signed to that effect.

"Manitoba informed Eze that it had applied its global rates for similar jobs in other part of the world where it operates."

Another issue that caused friction, revealed the presidency source, was the insistence by the Permanent Secretary in the power ministry, Ms. Derin Awosika, that the Market and System Operations, two principle functions of TCN, be taken out of its purview.

But the BPE put its foot down on the grounds that the Market Operation and System Operation were critical components required for the emerging electricity market to ensure viability through the application of modern business practices and information and communications technology in TCN.

Seeing that the BPE was unwilling to budge on hiving off the Market and System Operations functions of TCN, Awosika was said to have reluctantly backed off.

Following the resolution of all the issues that divided the parties, the BPP, the presidency official confirmed, sent the ratification tuesday morning to BPE on the contract.

He explained that it was not a "No Objection" given by the BPP since the contract had already been executed.

"If the contract had not been signed, it would have required a 'No Objection', but this was not necessary," he said.

Since it was signed, the Manitoba contract has been mired in controversy, as those opposed to TCN's takeover by the Canadian firm in the power ministry have frustrated its officials every step of the way.

The contract was also threatened when Eze wrote a memo to the president early this month recommending its cancellation, arguing that it had been mis-procured by the BPE.

Initially, the president acquiesced to Eze's request but later reversed the decision.

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