Of all the infrastructure projects that were procured but abandoned and left to rot away over the years, those contracted by the Transmission Company of Nigeria (TCN) to expand the country’s transmission network are top on the list of these abandoned projects, the interim Managing Director of the TCN, Mr. Usman Mohammed, has disclosed.
Mohammed stated that these abandoned TCN projects were scattered across the country and that a lot of them had largely been paid for by the government. He said the contractors for them were mostly Nigerians without the required capacities but selected by influential people in government.
According to him, this has cost the TCN both in terms of finances and goodwill especially within multilateral agencies that are always willing to provide funds for its network expansion.
Mohammed said these at the weekend when two high-end transmission infrastructure – a 40 megavolts amp (MVA) 132/33 kV mobile substation in Zaria, and 60MVA 132/33 kV transformer in Funtua built by the TCN, were commissioned by the Minister of Power, Works and Housing, Mr. Babatunde Fashola.
“TCN projects are amongst the highest of all abandoned projects in the country. We have so many of them, and I cannot even begin to mention them.
“Every year, budgets were provided and projects created but in the process, they do not recruit quality contractors because some of them were actually suggested by some people in the National Assembly,” said Mohammed.
He further stated: “We have so many of these abandoned projects and I can give you a few examples, we have the 132kV substation in Oba Anambra State, contract for that substation was awarded in 2001, the contractor is a Nigerian contractor, they have collected 81 percent of the offshore amount and 54 percent of the local portion, but the contract has been abandoned.
“Welelembe in Kano is also another example of a failed contract and is a Nigerian contractor who has collected 90 percent of the offshore and 60 percent of the down shore, yet the contract is abandoned, it is all over the country.”
He noted that the TCN had begun to resuscitate some of the abandoned transmission projects using its in-house engineers and at very low financial costs but that this was attracting a lot of opposition from interests.
“Some of them we are asking our staff to take them over and fix. I can tell you that this one (the Zaria mobile substation) we fixed here was done by our people at less than 10 percent of the contract sum that was quoted by a contractor because we believe we can do certain things by ourselves, and this is not going down well with some people who believe the TCN is supposed to be their farmlands,” he added.
Mohammed, also clarified the status and composition of about $1.5 billion multilateral donors loan which the TCN is primed to obtain from the World Bank, Islamic Development Bank, and African Development Bank (AfDB) amongst others for its network expansion, and which the National Assembly recently initiated an investigation into.
He said that the National Assembly may have misunderstood the composition and process of getting the loan, adding that it was yet to get it and would not have done that without the approval of the federal government through the ministry of finance. “When we came in, we had to assess TCN and see what we can do to make it an organization that can meet its objectives of wheeling power across the nation, and stabilizes the grid with quality power. In doing that, we had to come up with a program – the Nigerian Transmission Rehabilitation and Expansion Programme. “
Now, the program seeks to expand the capacity of the transmission to the ‘N minus 1’ reliability capacity which means that anywhere you have a unit, it should be times two, and if there is a failure, the people using that unit should not be affected.
“There are various ways the TCN can raise money, either through the wheeling charges, contractor financing, and multilateral donors, but the two first options are not there for the TCN because what we are getting from the market is less than 40 percent of our invoice and barely enough to pay salaries and do operations. Even the contractor financing is not right because revenues have to be set aside to be able to meet your obligations when they crystallize,” he said.
Mohammed further explained: “So, the only option we had was to meet the government to support us in getting multilateral donor finance and we presented our program to the donors which are the cheapest money we could find. Every multilateral donor has a moratorium period you cannot get from anywhere, and they will always require you to put some things in place.
“One of the things they asked us was the issue of our failure to implement projects in the past and we have to address that. One of the reasons we have been failing in implementing projects in the past is our inability to recruit contractors that are qualified, and they came up to say we must recruit contractors that are qualified to weed out unqualified contractors and we agreed.
“But, in doing that, we also told them that it takes a long time to get multilateral project to be implemented, and we believe the procurement and preparation can take place simultaneously in some cases, and insisted that we should do this simultaneously and they agreed, so it is a win-win situation, and so many donors come in. We have $486 million from the World Bank, $210 million from Islamic Development Bank, we have $454 million from AFD, $200 million from JICA, and $200 from African Development Bank.
“And this is how it is, the agreement we have with them is that we can prepare the projects and implementation at the same time, and this sent a wrong signal to people that we have signed and taken the loan. For anybody to say the TCN has taken the loan, it is because the person is ignorant of the law. By law, we cannot even take the loan without the consent of the ministry of finance, and no multilateral donor will talk to you because they know it is illegal.