8 January 2014

Nigeria: FG to Cut Manitoba's Power in N3.9 Billion Deal

Photo: Vanguard
Privatization of Nigeria's energy sector.

The Federal Government has bowed to pressure and began a review of the N3.9 billion management contract given to Canadian company Manitoba over the Transmission Company of Nigeria (TCN).

Manitoba Hydro International (MHI) took charge of TCN early last year in a $24.7 million contract that is expected to run for three years, aimed at improving the electricity transmission system.

TCN is one of the successor companies of the unbundled Power Holding Company of Nigeria (PHCN), and Manitoba took over its functions of a transmission services provider, system operator and market operator.

The contract has been mired in controversy, leading to the resignation in protest last week by erstwhile TCN board chairman Hamman Tukur, who said the company was taking unilateral decisions to the detriment of the Nigerian government and the electricity sector.

"Manitoba was given all sorts of power to the extent that certain decisions taken by Manitoba cannot be challenged by anybody," Tukur said in an interview with Sunday Trust published on Sunday.

Speaking yesterday in Abuja at the swearing in of Tukur's successor, Minister of Power Chinedu Nebo said government has now began a review of the contract so as to whittle down Manitoba's "over-hyped" powers.

"The board has so far reviewed the Schedule of Delegated Authority earlier issued to MHI, the management contractors for the utility company. It is therefore expected that the concern of the Nigerian public regarding the over-hyped powers of MHI would now be an issue of the past," Nebo said.

"I am also aware that the board has also considered and made recommendations on some amendments to the management contract with a view to making MHI more responsive to the changing needs of TCN," he said.

Nebo said Tukur resigned "on the grounds of age," leading to appointment of Alhaji Ibrahim Dahiru Waziri as new TCN chairman.

But this contradicted the reasons Tukur gave in his interview with Sunday Trust in which he said his resignation was because of the unilateral decisions that Manitoba was taking, including its usurpation of President Goodluck Jonathan's powers.

Tukur said by allowing Manitoba appoint the company's chief executive officer, President Jonathan had ceded his constitutional responsibility to the Canadian company.

He said he made representations to the TCN board and to Jonathan on the situation but that they did nothing to check Manitoba.

Long-drawn controversy

Following revelations by Daily Trust last year on the dispute and controversy surrounding the Manitoba contract, the Senate Committee on Power opened an investigation.

Committee chairman Philip Aduda said at a hearing: "BPE should look at the contract document to clarify every issue, put in place clear protocols to help delineate the duties of SO, MO, and TSP." He was referring to the roles of system operator, market operator and transmission service provider, all of which are now being handled by Manitoba.

Daily Trust had reported in August that part of the crisis trailing the deal was that the Ministry of Power and Manitoba ignored the contract conditions.

In one of such infractions, Manitoba assumed sole control of TCN bank accounts and day-to-day running of the company without the supervision of the board.

Though the contract document says all payments to Manitoba should be approved by the board, official documents seen by Daily Trust show that Manitoba had already received about 49 per cent of the contract sum without the board's approval.

The documents also show that Nebo has instructed the handing over of TCN accounts to four officials of Manitoba even though contract specifies that TCN accounts signatories shall comprise two Manitoba and two Nigerian counterparts.

When contacted for the Daily Trust story in August, Managing Director of TCN/Manitoba in Nigeria, Mr. Don Priestman, said: "We do not have control of the market fund and this is not ideal. The contract was designed to take over management control of TCN, not certain parts. It didn't include something and exclude something."

Asked to explain why a huge amount of the contract sum was paid, he said, "We are not investing in TCN. We are just to provide expertise, manage and introduce necessary reforms. There are other aspects that also require attention."

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