•Canadian firm, stakeholders at war over bid to renew contract
By Magnus Eze
Nigeria’s power situation has remained epileptic, forcing many businesses to either fold up or function far below capacity, throwing many out of job. In a bid to revamp the ailing sector, the Federal Government unbundled the generation and distribution of electricity.
It contracted the management of the country’s weak transmission network to a Canadian firm, Manitoba Hydro International (MHI) in a multi-year deal with the expectation that the move would help improve power supply.
Checks by Abuja Metro revealed that so far, the company is yet to make significant inroads because of alleged internal structural instability.
Under the terms of the contract, Manitoba was to, within two years, develop and implement business plans and strategies to make the Transmission Company of Nigeria (TCN) efficient, stable and sustainable from technical and financial standpoints.
It was also to develop and implement strategies and best practices which would enable the company supply quality, uninterrupted electricity through merit order load dispatch nation wide.
The company was also required to develop a competent Nigerian management team through knowledge and skill transfer and set development for smooth transition from MHI management on completion of its management contract.
To MHI, the power management contract entered with the TCN has ensured the capacity increase of 5,200 megawatts (mw) from the 3,200mw it met in 2012, and the wheeling of 5,074mw in February 2016.This is as the immediate past Executive Chairman of Nigerian Electricity Regulatory Commission (NERC), Dr. Sam Amadi, disclosed that the company was running outside the commission’s regulatory framework.
Abuja Metro gathered that the Canadian company which assumed the management and control of TCN operations four years ago was making fresh moves to persuade the Federal Government to renew its contract.
However, some stakeholders have urged President Muhammadu Buhari not to renew the contract because the Canadian firm has failed woefully to deliver on the terms of the deal, with the lingering abysmal power situation in the country.
Making the submission on behalf of about 26 civil society groups, an Abuja-based pro-transparency platform, Human Rights Writers Association of Nigeria (HURIWA), through its National Coordinator, Comrade Emmanuel Onwubiko and the Media Affairs Director, Miss Zainab Yusuf, urged Buhari not to undermine his proposed power sector legacy for Nigerians by renewing the contract to a company that was said to have performed abysmally and allegedly breached all extant contractual agreements.
The group said the company has drained Nigeria of the foreign exchange through a nebulous provision in the contract that stipulates payment of the consultants in foreign currencies. The management contract, Abuja Metro gathered, is worth about N1.4 billion annually.
Aside allegations of procurement irregularities and financial infractions, HURIWA also doubted the qualification of the company’s expatriate staff for the job.
“It is on record that there was no fit-for-purpose interview/test carried out to check the academic qualifications and requisite experience of the MHI staff who came to lead Nigerian engineers. In almost every country, if you are not a registered engineer, you will not be allowed to work in an engineering firm at management level.
“In Nigeria, without due regards to the professional body’s regulations, the authorities employ foreign professionals. Most of them come in with forged credentials, knowing that they would not be checked or their claimed qualifications crosschecked and investigated”, the group said.
Also, HURIWA faulted the fourth year renewal of the contract, saying it was not based on any known key performance indices (KPI).
On why government should not renew the contract for the fifth year, the association in a statement entitled, ‘Another MHI Contract Renewal’ stated : “The MHI has already started their campaign and lobby for yet another tranche of $9million for their contract renewal even when it is obvious they are not in any way performing. It was gathered that they have also boasted that performance or no performance, they would secure another renewal, adding that they are in good hands.”
But Amadi urged the government to change the game by coming out clear on what it wants, stating the job description; and go for those who can do it.
His words: “If government wants to get any other company or continue with Manitoba, they should design terms of reference and connect it to NERC’s regulatory oversight. In the day- to-day transaction, the strongest trigger for efficiency is the regulator. If the regulator is not empowered and does not have the capacity to monitor and set deliverables that line up with government milestones for the private operator, then there would not be efficiency.
“The Ministry of Power should line up Manitoba’s scorecard to align with the regulator’s technical, financial key performance indicators provided for the TCN.”
The Communications and Media Relations Manager of the organisation’s home office in Canada, Kamila Konleczny, initially said: “I have been in touch with our team working in Nigeria and I am working on your request. I will have a response for you shortly.”
Few days later, spokesperson for the company, Cassandra Siemens, a director, denied the allegations, insisting that MHINL has consistently met the expectations set out in the contract.
On doubts raised about the capability of the company’s expatriates, she said: “MHI staff its projects with experienced individuals who are specialised in their fields, through a combination of internal, external and parent company resources. MHI employs numerous seasoned energy sector professionals in key consulting roles around the world, with many years of operational utility experience in both developed and developing countries.
“MHI’s strong organizational capability has allowed it to perform work in over 75 countries, due, in large part, to the availability of highly qualified staff from within the corporation and its associates.”
According to Siemens, the company had ring-fenced TCN into two different business units (transmission service provider and independent system operator) in preparation for unbundling as well as reduced technical losses from 12 to eight per cent.
She noted that under the terms of the contract, all KPIs were negotiated and agreed upon with the TCN supervisory Board of Directors.
The MHINL spokesperson said besides continuity, securing the confidence of investors and market participants were crucial to TCN’s on-going success.