Canadian firm to get $23.7million to manage PHCN's successor company

A power station used to illustrate the story

Manitoba Hydro International of Canada has made an offer of about $23.7million to manage the Transmission Company of Nigeria (TCN) for three years.

The company’s financial bid was opened in Abuja by the National Council on Privatisation (NCP) in collaboration with the Bureau of Public Enterprises (BPE) marking a major breakthrough in government’s effort to enlist the services of competent firms to handle the management of the 18 Power Holding Company of
Nigeria (PHCN) successor companies.

The Canadian firm, which was one of the three firms that emerged at the end of pre-qualification exercise in 2007, emerged tops at the final selection process, Director General of the BPE, Bolanle Onagoruwa, said.

The other contenders were Power Grid of India and ESB International of Ireland.

According to the BPE boss, Manitoba was approved as winner based on the World Bank’s quality and cost-based selection (QCBS) method used for the transaction, adding that its selection was eventually approved by the NCP at its meeting held on March 26 and was invited negotiation on the contract.

“The Quality and Cost Based Selection (QCBS) method of the World Bank was used for the transaction and the technical proposals were evaluated based on their transmission-loss reduction, network improvement and capacity transfer strategy,” she said.

“This intent is to have the transmission company that will be capable of containing the anticipated charges in the Nigerian Electricity Supply Industry Market.

 “The minimum technical score for progression to the next stage of the selection process is 75 per cent. The result of the evaluation of the two proposals showed that only Manitoba Hydro International was able to meet and exceed the benchmark which led to its emergence as the Management Contractor for TCN.

The BPE boss said the company would be expected to bring their years of experience in managing transmission lines to the TCN to ensure that the lines rolled out give maximum output.

“They are going to advise us on so many things in terms of how much expansion could be done within the next 10 years to meet up with plans for additional generation among others,’Ms. Onagorowa said.

“They will ensure maintenance is done as at when due, even little things like cutting trees along the path of transmission lines. We just want discipline inculcated into the management of TCN as it is the TCN people that will still do the work.”

Ms. Onagoruwa said a six-member team has been constituted by the government to handle the negotiation of the contract fee and other terms of the deal with the Manitoba.

She listed the objectives of the multi-million dollar management contract to include, reduction of electricity losses during transmission; provision for the achievement of certain pre-determined targets that would improve grid security and integrity and general performance; having reward and penalty clauses as incentives for success and provision of efficient management for government investments.

Others are ensuring adequate and equitable generation dispatch according to a fair merit order based on sound regulatory principles, ensuring fair market settlements between electricity traders; and provision for skills and expertise transfer to Nigerian counterparts who will serve in deputy and other positions to the management staff of the Management Contractor.

The Minister of Power, Bart Nnaji, said the deal would further help the realisation of the power sector reform agenda of the government, pointing out that the management of the national grid is the life blood of the country’s power sector.

Chairman, Senate Committee on Privatisation, Olugbenga Obadara, and his counterpart in the Committee on Power of the House of Representatives, Patrick Ikhariale, advised the management of the Canadian company, led by Lorne Halpenny, to learn from the mistakes of the past in the privatisation programme by ensuring that they deployed the technical and manpower resources at the company’s disposal to ensure improved electricity supply in the country.

TCN is one of the 18 successor companies following the unbundling of the Power Holding Company of Nigeria (PHCN).

It combines the functions of a transmission services provider, a system operator, all of which are central to the sustainability and development of the electricity sector.

Manitoba, which is the electric power and natural gas utility in the province of Manitoba, Canada, currently operate 15 interconnected generating stations and has more than 572,000 electric power customers and over 263,000 natural gas customers.

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