Manitoba ready to start electricity contract
• Gets schedule of delegated authority
• Govt may inaugurate supervisory board this week
CANADIAN firm, Manitoba Hydro International, has finally been issued the schedule of delegated authority that would enable it to effectively take over the management of the Transmission Company of Nigeria (TCN) on behalf of the Federal Government.
There are also strong indications that the much-awaited supervisory board members announced for TCN last December would be formally sworn in this week.
The TCN was incorporated in November 2005. TCN emerged from the defunct National Electric Power Authority (NEPA) as a product of the merger of the transmission and operations sectors on April 1, 2004.
Being one of the 18 unbundled business units under the Power Holding Company of Nigeria (PHCN), the company was issued a transmission licence on July 1, 2006.
The operations of TCN include the key three functions of Market Operator (MO), System Operator (SO) and Transmission Service Provider (TSP).
The schedule of delegated authority is the instrument that gives Manitoba full authority for running TCN. With the signing of the contract in July, August was to be a transition period while the schedule of delegated authority was to have been issued in September heralding full take-over.
The Chief Executive Officer of Manitoba, Don Priestman, confirmed the development in an interview with The Guardian last night.
He said: “Yes, we have been given the schedule of delegated authority that hands over the management of TCN to us.”
On the company’s plans for the troubled TCN, Manitoba stressed: “Throughout the term of the contract, one key objective for MHI will be to re-organise TCN such that the transmission service provider becomes a separate entity from the market operator and system operator and thereby allowing it to become a privatised commercial company.
“MHI expects to turn TCN into a technically and financially efficient, stable and sustainable company; a company that will be market-driven and capable of utilising its maximum generation capacity and then distributing the energy throughout Nigeria 24 hours a day, 365 days a year. To do this, MHI will have to focus on developing the proficiency of local personnel.”
But Manitoba’s travails and its rocky road to implementing its contract in Nigeria have become a metaphor for how not to do business in Nigeria.
The $23.7 million three-year management contract was signed with the firm July last year. But scheming within government circles to continue to control the office of the market operator known as the ‘power house’ or the ‘financial room’ of TCN, led to several attempts to manipulate the contract.
The Guardian learnt that the issuance of the schedule of delegated authority was largely motivated by the new Minister of Power, Prof. Chinedu Nebo, who has never hidden his preference for doing the right thing since he was sworn in.
The TCN is responsible for evacuating generated electric power from generating companies and wheeling it to distribution companies.
It was learnt that the SGF co-ordinated the issue of schedule of delegated authority, which had hampered the effective execution of the contract for the management of TCN, a contract that is now in its eighth month. The modernisation of the TCN is a critical component of Nigeria’s electricity reform agenda.
While government had started honouring its financial commitments to Manitoba, the firm had been involved in mere ‘ shadow boxing’ as a result of government’s refusal to honour certain components of the contract. But with the signing of the schedule of delegated authority between government and Manitoba, a new lease of life has entered the contract.
“The company is now in full charge,” another stakeholder said yesterday.
Nebo had on February 19 hinted that the schedule of delegated authority would be issued to Manitoba ‘next week’.
It was learnt that the issue has now been settled and the company issued the schedule of delegated authority quietly.
But as government prepares to inaugurate the supervisory board for TCN, there are still concerns on what to do with the Nigerian management at the TCN.
Some concerned stakeholders had spoken of the need to offload the previous management officials of TCN to enable Manitoba take complete charge of the company, possibly working with younger Nigerians who would have the capacity and vibrancy to understudy the Canadian experts and take charge when their contract ends.
Indeed, there are still two chief executive officers at TCN, Don Priestman (from Manitoba) and Mr. Olusola Akinniranye (the Nigerian CEO). The CEO oversees all the operations of the company, which include transmission, systems operations, market operations as well as finance and administration. There is also a market operator: Mr. Evarestus Mogbo (from Nigeria).
Manitoba has also appointed Mr. Alejandro Core as the new Market Operator for Nigeria (Executive Director, Market Operations).
Manitoba is coming with about eight expatriate managers to run the transmission company for a period of three years in the first instance. TCN also has some executive directors and key management officials still in place.
The Operator of the Nigerian Electricity Market (ONEM) is licensed to function as Market Operator (MO) of the wholesale electricity market of the Nigerian electricity supply industry.
On how to resolve the challenge, a concerned stakeholder told The Guardian: “The Nigerian CEO should go. There is nothing like deputy CEO. The eight Nigerian management officials should go. Younger persons should be appointed to understudy the new guys and then take over from them at the end of their contract. People who are already there are not willing to leave.”
Following the directive of President Goodluck Jonathan, the Bureau of Public Procurement (BPP) had late last year issued a certificate of no objection to Manitoba Hydro to manage TCN. Government had also gone ahead in December to advance the company funds in line with the management contract.
With the issuance of the schedule of delegated authority, The Guardian learnt that certain issues around the reconsideration of the membership of the announced TCN supervisory board are next on the agenda.
The Guardian could not confirm if the schedule of delegated authority issued to TCN is for the total management of the transmission company, or whether government has managed to restructure it in line with the previous bid for the soul of TCN