Manitoba Hydro International Nigeria Limited, MHINL, has agreed to collect payments in Naira, Nigeria’s national currency for services rendered instead of being paid in United States Dollars
AFTER months of insistence that its outstanding invoices be paid in United States, U.S. Dollars, Manitoba Hydro International Nigeria Limited, MHINL, has agreed to collect payments in Naira, Nigeria’s National Currency. MHINL is the Canadian firm contracted by the federal government to manage the electricity Transmission Company of Nigeria, TCN.
The firm’s acceptance of the naira payment is contained in a letter signed by Cassandra Siemens, its director, and addressed to the managing director, System Operations/Market Operations, TCN. MO is a division of TCN that issues market settlements and invoices due to the market participants and service providers in the Nigeria Electricity Supply Industry, NESI.
In the letter dated September 29, MHINL recalled that it had given a notice of suspension under the management contract of TCN for reason of non-payment in U.S. dollars as per the contract terms. The firm said, however, that on a case by case basis, MHINL will write their acceptance for payment of the U.S. Dollars in Naira.
The Canadian firm asked the MO to immediately transfer 93,764.09 U.S. dollars in naira at the prevailing exchange rate, into its Zenith account whose number was stated in the letter. The firm, however, hinted that the request was a onetime exception, indicating that it would still pursue its bid to be paid in dollars.
The News Agency of Nigeria, NAN, reported that the development signified a twist to months of disagreement that stalled the payments as the MO refused to pay the invoices in dollars as requested by MHINL. In refusing to pay in dollars, Vera Osuhor, managing director, MO, had argued that doing that would breach a Central Bank of Nigeria, CBN, directive that stated that all payments must be made in local currency.
Irked by the insistence, MHINL had written CBN but got a response that only affirmed the MO’s position that every payment must be in naira. However, MHINL’s position that naira payment was only a onetime exception, confirms that the disagreement is not over as the firm was still sticking to its desire for dollar payment in future.
Osuhor said the new development has vindicated her. “In declining to pay in dollars, the MO was only being obedient to the CBN directive; we did not just refuse to pay deliberately. There are laws and those laws must be obeyed,” she said.
She said the MO had opened a separate account for MHINL into which electricity trade funds were being paid. The said unilateral account had sparked reaction from the Nigeria Electricity Regulatory Commission, NERC, which in a letter signed by Usman Abba-Arabi, head, public affairs, NERC, and dated September 23, threatened to sanction the MO if it did not close the account. “The misinformation on the account issue is worrisome because it was just a salary account. It was not an account into which electricity market funds were being paid; salary account and market account are two different things. Before we opened that account, we wrote to the permanent secretary of the Ministry of Power and got the permission to do so,” she said.
Osuhor explained that the account was opened under pressure because workers had threatened to go on strike over the non-payment of salaries. “The workers were on our neck and we had to open the account because we had to access money to pay. Immediately we paid the salaries, we closed the account and that was all.”
She traced the development to an infraction in payment of salaries of MO workers after the TCN removed their names from the payroll. The removal of the names from the payroll resulted from appointments at TCN and promotion of existing staff to new positions like managing directors, executive directors and directors carried out by the immediate past administration.
NAN also reported that NERC, at its regulatory meeting on August 27, discussed the matter and resolved that names of the staff be reinstated. “The non-payment of the salaries even after that NERC meeting forced the MO office to resort to the same account so as to avert a showdown with the workers.”
It confirmed that the account had been closed in anticipation of TCN’s compliance with NERC’s directive to pay MO’s workers’ salaries in future. On the allegations that MHINL had not been up to date on its tax returns, Osuhor said she was not in position to speak on that. She, however, acknowledged the power ministry’s directive that all applicable taxes be deducted before the Canadian firm was paid its invoices. “You can go to the relevant bodies to seek the clarifications you may want,” she said.
— Oct 19, 2015 @ 01:00 GMT