Review of Manitoba power sector contract
The Federal Government’s plan to review the management contract awarded to Manitoba Hydro Nigeria (MHN), in respect of the Transmission Company of Nigeria (TCN) is worrisome. The Minister of Power, Professor Chinedu Nebo, confirmed the planned review during the swearing in of a new board chairman to succeed Alhaji Hamman Tukur, who resigned earlier. According to him the government had commenced a process to whittle down the powers of MHI which he described as “over hyped”.
The cause for worry derives from well-founded fears that the review may reverse the initiative of changing for better, the fortunes of the nation’s power sector. More so is the suspicion that the review is driven by an intention to appease powerful interests in high places. Professor Nebo did not specify how such a move would add value to widely-acclaimed contract to the firm would accelerate the government’s goal of sustainable power sector reforms. Already, the controversy surrounding the execution of the contract was a factor that led to Tukur’s resignation.
The government needs to demonstrate superior logic by avoiding any ill-conceived, precipitate action, such as arbitrary review of the terms of a contract it voluntarily entered into, unless there are obnoxious provisions of the contract that do not conduce to promoting national interest. In which case, the review should also accommodate holding the authors of such questionable provisions liable for any potential compromise of the national interest.
The TCN is one of the 18 business units that emerged from the unbundling of the Power Holding Company of Nigeria (PHCN). courtesy of the 2005 Nigerian Electricity Sector Reforms Act, and was incorporated that same year. In the light of the strategic significance to the country of its power transmission operation, and which includes the supervision of the Generating Companies (GENCOs) as well as to some extent Distributing Companies (DISCOs), it was exempted from privatization.
However, in response to the perennial inability of its indigenous managers to make it work over the years, the government invited MHI to the rescue, through a three-year management contract at the cost of N 3.9 billion. MHI’s broad mandate is to turn TCN within its three-year tenure, into a technically and financially efficient, stable and sustainable company that will be market- driven. In addition, TCN should be capable of utilizing its generating capacity to enable stable power 24-hours-a-day service to all parts of the country all year round. That has been the enduring dream of Nigerians.
To achieve that long sought-for aim, the terms of the contract gave MHI authority to take charge of the entire operations of TCN by assuming management responsibility and control, conferring on MHI near-omnibus powers over the affairs of TCN.
MHI’s appointment was through a legally approved due selection process which was also garnished by the firm’s success story both in its home country Canada, and in several other countries, including some in Africa. Hence it is seen in the public domain as the answer to the country’s problematic power sector.
Eventually, MHI took charge of TCN only last year, even after the contract process was haunted by a complex web of intrigues and manoeuvres, orchestrated internally, and aimed at frustrating the firm from performing as expected. Against this backdrop, the reported ongoing review of the management contract should be justifiable only if there are established infractions of the terms of the contract. Anything short of that would lead to recourse to compromise of the expectations of Nigerians with respect to the performance of TCN.
Of public interest in the review exercise is for instance the Schedule of Delegated Powers which captures clear outline of the dos and don’ts for MHI. Nigeria’s national interest should be uppermost in all considerations.