President Goodluck Jonathan and his vice, Namadi Sambo, who chairs the National Council on Privatisation (NCP) have now thrown their weight behind the retention of Manitoba Hydro International (MHI) as the manager of the Transmission Company of Nigeria (TCN) BusinessDay can authoritatively report.
The president is so piqued with those who perpetrated the well orchestrated campaign that almost led to the termination of the of the TCN contract, that he has now opted to seek a strong pro-reform pair of hands, as Minister of Power, to provide a firewall against future maneuverings capable of undermining the transformation of the power sector.
Sources at the presidency say this could precipitate a minor cabinet reshuffle very soon.
The president also last night, confirmed that the contract has not been revoked, when he spoke at the Presidential Media Chat in Abuja, saying “Manitoba contract has not been revoked”. According to him, there were some loose ends in the contract, when it was initially signed by the BPE, in 2006, adding that as at that time, the law on public procurement had not become effective.
Jonathan explained further, that when it was discovered that the contract did not follow due process, he has asked that it should be looked into, and that by close of work on Tuesday, a definite action would have been taken on the contract, repeating “We did not cancel the Manitoba contract.”
The strong support of the president and his number two, for the retention of MHI, is bound to have a calming effect on the investor community, which had become quite disturbed, after word leaked that the president had approved the memo by the BPP seeking to cancel the Manitoba contract.
Business Day also learnt that those who played key roles in the ignoble attempt to torpedo Manitoba from TCN, may now face severe sanctions in the light of strong evidence that the attempt to truncate the contract of MHI was designed to ensure the emergence of Power Grid Corporation of India (PGI) as the management contractor.
Documents seen by BusinessDay showed that Power Grid of India, had through a petition sent on 11th April 2012 to the Presidency, protested its non-selection as the preferred management contractor for TCN.
The company then went ahead to lobby influential persons in the presidency, asking that the process that led to the emergence of MHI be re-examined.
The company’s intense lobby resulted in the Bureau of Public Procurement (BPP) raising a strange memo on November 2 and which was leaked to the press, to query the process leading to the emergence of MHI.
In the memo, the BPP had alleged that the Bureau for Public Enterprises (BPE) “misled the National Council on Privatisation (NCP) in adopting the use of a procurement process that was suspended in 2006 instead of re-advertising for the project, to enhance competition and value for money.” The BPP also alleged that the $23 million contract given to MHI was overpriced, but the bureau failed to enumerate the huge difference in the new contract, including an obligation by MHI to meet 18 crucial milestones during its three-year contract cycle.
In a strong rebuttal put forward by the NCP, a copy of which was seen by BusinessDay, the NCP described the BPP’s position as “an insult on the office of the Vice President, all NCP members and the NCP’s technical committee members, since it assumes that they are incapable of figuring out on their own, what is in the national interest.”
The NCP argued that it adopted the fastest and most efficient method that could produce a world class management contract for TCN.
“We took the decision to reactivate the 2006 procurement, fully conscious of the fact that the alternative of running new adverts would take much longer, and may not produce a superior outcome, considering the very specialist nature of this business,” the NCP said.
The NCP also faulted the recommendation by the BPP in its November 2 memo, that “the BPE should be directed to fast track a re-procurement exercise, by forwarding a shortlist of five internationally renowned companies involved in management contracts within the power sector, including MHI, to the BPP for no objection, and conclude the entire process within 30 days.”
According to the NCP’s position, the process is not like a tap that you can turn on and off with a push of the knob.
An international procurement expert who spoke to BusinessDay said “No 30-day procurement can produce internationally renowned companies overnight, since the companies which are specialists in transmission management, are not sitting there waiting to bid for any available contract.”
Many analysts familiar with the attempts to secure a management contractor for TCN, believe that the only logical outcome, if this 30-day process is embarked on, is to produce the Power Grid Corporation of India, as the preferred bidder.
In the earlier selection process in which MHI emerged tops, both Power Grid of India and British Power International, had participated, but had failed to secure the 75 percent minimum pass mark required to emerge as the preferred management contractor for TCN.
Power Grid Corporation of India has had its operations mainly in India, with no evidence of a track record of managing transmission lines outside of India.
On the contrary, MHI has vast experience in managing transmission lines in over 70 countries, BusinessDay investigations show. MHI has also consulted for countries like Uganda, Rwanda and Liberia, among other countries in Africa, information on its website shows.