FG Urged Not to Takeover Transmission Company of Nigeria

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Barth Nnaji

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Barth Nnaji, former minister of power, is against the federal government taking over the Transmission Company of Nigeria from Manitoba, a Canadian firm whose contract expires in July

By Anayo Ezugwu  |  Jun 29, 2015 @ 01:00 GMT  |

AS the debate over the renewal of the contract of the Hydro International of Canada, rages, the federal government has been asked not to take over the management of Transmission Company of Nigeria from Manitoba. The contract of Manitoba expires in July. Barth Nnaji, former minister of power and chief executive officer, Geometric Power Limited, issued the warning on the sidelines of the West Africa Power 2015 Summit organised by IRN in Lagos, on Tuesday, June 16, saying interferences from government officials had affected the work of the Manitoba personnel.

“The TCN should never go back to government management. Government ownership, yes, but not government control. It is not a good idea. Private sector proper management, maybe. But giving out segments of the TCN on concession; yes, that’s better. I believe that the private sector management was never allowed to work. That’s part of the problem. The people who were brought to manage had to endure interferences from the government appointed officials. So that is an issue,” he said.

According to Nnaji, what should happen is that perhaps a short-term extension can happen or a concession, but not to go back to government management. The former minister of power stressed the need for the new government to have an effective way of ensuring that the country did not go back and forth in terms of power supply.

“That the power that we have now can be sustainable and that we continue to grow it means that key issues of generation must be assured; that evacuation of the power must be there, and it requires that the government will put people who are absolutely thinking about the nation, not just in the ministry of power, but also in the other ministries. People who will work together to deliver,” Nnaji said.

Highlighting the importance of regular gas supply, he said gas wells and infrastructure needed to be developed. “In the next many years, 80 per cent of power will come from natural gas. So, we must continue to grow natural gas. I am not sure that whatever is released now is even going to be enough to go as far as we would want in the interim. Right now, we have domestic gas obligation from the producers of 4.9 billion standard cubic feet of gas and only about a third (1.9 billion) of that is being delivered, and that’s what Nigeria has.”

Nnaji said to fill the country’s installed capacity, gas supply of up to seven billion scf is required. “In the next 10 years, we need about four times that amount. So, we need a lot of investment. The sector needs to be opened up for private sector investment in gas. We need to grow power to a point where Nigerians can feel the presence of power supply in the country and there is some degree of predictability. What should happen is continued growth as expected, but to have power stability requires a lot of discipline of the various organs of the production system,” he said.

Chinedu Nebo, immediate past minister of power, had last year indicated that the TCN would be privatised. On his part, Sam Amadi, chairman, Nigerian Electricity Regulatory Commission, NERC, said the decision as to whether the contract would be renewed or terminated was that of the ministry of power and the Bureau of Public Enterprises, BPE. “It is a policy decision for the new government. Let’s wait and see what the new government will come up with.”

The federal government had in 2012 signed a three-year contract for the management of the TCN with the Canadian firm after it emerged the sole bidder. The contract has an option of a two-year extension. The TCN is in charge of the transmission network, a critical link in the electricity value chain, but remains a weak link with a current wheeling capacity of about 4,800 megawatts, according to industry experts.

The company was left out of the process that saw the successor generation and distribution firms unbundled from the defunct Power Holding Company of Nigeria, PHCN, handed over to private investors in November 2013.

The transmission network, a critical link in the electricity value chain, remains a weak link with a current wheeling capacity of about 4,800 megawatts, according to industry experts. Some of the challenges said to be facing the electricity transmission company include lack of funds, high transmission losses and radial grid leading to frequent system collapses.

Experts have continued to stress the need to expand the transmission network, saying it would not be able to wheel the electricity generated if the power plants in the country were to operate at full capacity.

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