By MICHAEL EBOH

The Federal Government’s decision to cancel the contract with Manitoba Hydro over the management of the Transmission Company of Nigeria, TCN, is harrmful to the Nigerian economy, and will further worsen the current power situation, according to economic analysts and stakeholders in the power sector.

The concerns come, even as President Goodluck Jonathan, on Sunday, clarified that the contact has not been cancelled as widely reported.

“Our initial reaction was one of rude shock but upon further reflection, was not entirely unexpected. We opine that the cancellation of the contract is particular deleterious for several reasons,” said Managing Director of a foremost economic and investment research firm, who spoke on the condition of anonymity.

Mr. David Adonri, Chief Executive Officer, , Lambeth Trust & Investment Company Limited, in his own submission, maintained that the cancellation of the contract has called to question the seriousness with which the Federal Government of Nigeria is pursuing the privatization of the power sector.

According to him, following the recent premature departure of Professor Bart Nnaji, as the Minister of Power, the nation acute power failure has once more descended on.

“It appears the powerful vested interests that are bent on derailing the power sector reform have finally succeeded in truncating the exercise. Personally, I have serviced and started using my generator which was decommissioned during Nnaji’s tenure.

“It is illusory for Government to think that Nigeria can achieve meaningful economic development without the total deregulation and privatization of the metallurgical, power and energy industries which together constitutes the engineering infrastructure required for economic transformation.”

However, Mr. Seye Adetunmbi, Chief Responsibility Officer, Value Investing Nigeria, said the if cancellation will right the wrong once and for all and the lighting will improve thereafter, then it may be worth the while to bear the pain of disrupted power supply that will come with the contract cancellation.

He said, “Most importantly, this situation should not arise if due process was adhered to in the first instance. This is one area that government should see to by blocking the leakages and defective structures that set the nation back through wrong implementation of set policies.”

The Managing Director of the economic and investment research firm who also spoken on the condition of anonymity, said the cancellation of the contract tends to lend credence to the extremely high level of political risks associated with doing business in Nigeria, adding that these risks come with significant costs for Nigeria and Nigerian businesses in the short term with even more adverse long term impact.