FG averts power crisis, renews MHI’s contract

A major crisis in the power sector has been averted following the extension of the management contract of the Transmission Company of Nigeria (TCN) with Manitoba Hydro International Limited (MHI) of Canada.

MHI’s three-year contract to manage TCN’s transmission, system operation and market operation undertakings was to expire on July 31, 2015.

But the contract has now been extended by one year, Seun Olagunju, the TCN general manager in charge of public affairs, disclosed in a statement on Tuesday.

Intrigues by officials of the ministry of power almost stalled the extension as they jostled to get the company back under federal government control.

Sources told TheCable that some Nigerian “understudies” had been positioned at TCN with the assurance that the Manitoba contract would not be renewed and that they would take over.

But rather than understudy the Canadians, the Nigerians were engaged in a war of attrition with the management as intrigues took the better part of what was supposed to be a knowledge-transfer initiative.

The understudies were appointed outside of the provisions of the management contract while the appointments were done without the input of Manitoba, TheCable was informed.

“The understudies worked largely at cross purposes with MHI having been briefed that they would soon take over,” the source added, while suggesting that the Nigerians “learnt next to nothing because of this hostile atmosphere”.

“Manitoba had threatened that if the contract was not renewed, they would start demobilising before the end of the July. And if the contract was only renewed after they had demobilised, it would take them several weeks to mobilise again. The nation would have been plunged into a serious electricity crisis,” sources at the ministry of power told TheCable.

The Bureau of Public Enterprises (BPE) and MHI had signed their own part of the contract extension in May, but the ministry withheld its consent “having promised the understudies that they would take over from August 2015”, a senior official said.

Meanwhile, Olagunju said on Tuesday that TCN has achieved a wheeling capacity of 5,300 MW and reduced system losses from over 12% to approximately 8%.

“In addition, system collapses have reduced significantly, from 22 in 2013 to 9 in 2014, while the duration of collapses has reduced from more than 2.5 hours to approximately 30 minutes,” he said.

“The fourth year of the contract will focus on further increasing TCN’s capacity to transmit power in the grid, in anticipation of rising levels of generation in the country.

“Additionally, MHI will facilitate the unbundling of TCN into two new organizations, the Transmission Service Provider and the Independent System Operator, while simultaneously building the capacity of local management to take over the leadership of these organizations at the end of its contract.”

TheCable understands that TCN is yet to secure the necessary licences from the Nigerian Electricity Regularory Commission (NERC) to create the two companies.