Popular Misconceptions about Manitoba Hydro's Role in Transmission Company Nigeria (TCN)

In July 2012, Manitoba Hydro International was awarded a 3 year management contract worth approximately $24 million to take over the management and operations of the Transmission Company Nigeria (TCN).  Although it has been a year now, there are still some misconceptions about the role that MHI is currently playing in the transmission system in Nigeria. Below are six popular misconceptions that are very common in Nigeria and also abroad about the TCN-Manitoba Hydro contract.

   1)      In 2012, Transmission Company Nigeria (TCN) was sold to Manitoba Hydro and MHI now owns all of TCN assets and operations – This is the most popular misconception about the TCN-MHI contract. TCN was never sold to MHI. Nothing was bought by MHI as part of the transaction and MHI did not provide any funds to procure any transmission assets from TCN. The fact is that MHI was paid $24 million dollars for their services and expertise to take over only the management of the operations of TCN for a 3 year period as well as provide training to TCN staff during this time period. After the 3 year period, the contract will expire and MHI will transfer management and control back to TCN staff.

   2)      TCN was sold for approx. $24 million dollars – As mentioned above, TCN was not sold to MHI last year. TCN is currently not on the list for privatization. However, both generation and distribution companies are planned to be privatized.

   3)      TCN is now privatized and MHI is investing funds in TCN for construction of new transmission lines, high voltage substations and replacements of High Voltage asset. MHI hopes to make a profit as part of this investment – TCN is not privatized and private sector investments are not part of the TCN-MHI contract. Any assets added to Nigeria’s transmission network by TCN would be at the expense of Nigerians and not investments from MHI or any other private company.

   4)      MHI will manage TCN on a long term or until we reach our 40GW of Generation supply planned for 2020 – MHI is only managing TCN operations for 3 years and would be facilitating the restructuring of TCN to allow for the separation of the company into a Market Operator (MO) and System Operator (SO). Once the 3 year time period is completed, management of the operations would be transferred back to TCN staff unless this contract is extended.

   5)      MHI arrived in Nigeria with an army of people to tackle challenges in TCN – MHI arrived at TCN with 8 full time staff. This includes the appointed CEO for the three year term Don Priestman, a specialist in Engineering and system operations, Market operations, human resources, IT & communication, Finance, and administrative matter. This very slim core team is supposed to be our hope to turn TCN around to a profitable enterprise in the remaining two years.    

   6)      Nigerians will have a reliable power system now that MHI is running TCN – The MHI contract is not tied to fulfilling any reliability targets as part of the completion of the contract. Nigeria has a very unreliable power supply as a result of obsolete assets, depreciated assets still in operation, lack of adequate redundancy on the transmission system,  inadequate capacity on the network to mention a few. These inadequacies result in frequent interruptions and long outage durations. Though MHI will be managing the operations of TCN for the next 2 years, they would still require to get funding form the government for replacement and capital projects.  Nigeria is over a decade away from achieving world class reliability statistics on their transmission and distribution networks. 

Note: The writer is not affiliated with either MHI or TCN. The contents of this post and blog are just comments based on news and trends in the Nigerian Power Sector.