By Clara Nwachukwu
The three power companies, which bids were previously shortlisted for the management contract for the Transmission Company of Nigeria, TCN, by the National Council on Privatisation, NCP, are to re-submit their bids for fresh evaluation.

The companies affected include the Power Grid of India; ESB International of Ireland; and Manitoba Hydro of Canada, and had been directed to re-submit technical and financial proposals in line with current system and industry information.

“Under the new dispensation, the proposals will be evaluated based on their transmission-loss-reduction, network improvement and capacity transfer strategy. The intent is to have a transmission company that will be capable of containing the anticipated changes in the Nigerian electricity supply industry and market,” the Bureau of Public Enterprises, BPE, said yesterday.

The three companies were shortlisted from a list of eight international power companies that submitted EOIs, at the expiration of the deadline in June 2006, and were pruned down to three after the bids went through the Requests for Proposal, RFP, and the final stage of technical and financial bids which ended by April 2007.

The process for a management contractor was aborted following Federal Government’s decision to suspend all reforms and privatisation activities in the electric power sector.
The journey to hand over the TCN, one of the 18 successor companies under the unbundled Power Holding Company of Nigeria, PHCN, to private management, started since February 2006, but could not be concluded for plethora of reasons.

Based on World Bank guidelines all the three companies scaled through the Technical evaluation to ascertain the technical competence, each scoring the 75 percent required to proceed to the financial evaluation.

However, at the public opening of the financial proposals on September 12, 2007, Power Grid of India emerged first with a combined technical and financial score of 80.18 percent followed by ESB International of Ireland with a score of 77.18 percent. Manitoba Hydro of Canada came third with 72.07 percent.

Reason for re-evaluation
Explaining the rational for the re-submission of bids, the BPE said the decision was at the instance of Vice President Mohammed Namadi Sambo.

A statement signed by a spokesman of the bureau, Chukwuma Nwokoh, read in part, “The decision was taken at the body’s third meeting for 2010 which was held on Thursday, August 19, 2010 at the Presidential Villa, Abuja. The meeting was chaired by Vice President Mohammed Namadi Sambo.”

The Vice is the alternate chairman of the 14-man, Presidential Action Committee on Power, PACP, which is chaired by Mr. President.

The BPE noted that getting a management contractor for the Transmission Company, has been very challenging over the last four years, even with local and international advertisements calling for Expressions of Interest, EOI, adding that responses had not been very encouraging.

Upon the bundling of the PHCN, the Transmission Company “was scheduled for a Management Contract in order to transit the company into a financially sustainable, stable, self-sufficient and market-driven company,” BPE further explained.

However, the bureau recalled, “Two advertisements in local and international media, plus direct invitation to bid were made before a total of eight Expressions of Interest (EOI) were received.

This sends the clear signal that companies with the requisite experience were not in a hurry to partake in the project.

“It is important to explain that a major lesson learned in the last exercise at procuring a management contractor for TCN was the difficulty in attracting credible, experienced and world-class bidders. This situation is made more uncertain with the non-conclusion of the last exercise despite the emergence of a winner,” it concluded.

Sequel to the procuring a management contractor, the Bureau had to engage and retain the services of British Power International, BPI, who were initially engaged by PHCN to provide advice on the engagement of an Operation & Maintenance, OM, contractor and other issues like the development of Management Information Services and Corporate Governance procedures. BPI was procured by PHCN under World Bank supervision.

Current process
The BPE explained that the current process is just a continuation of the former process following President Jonathan’s directive that electric power reforms and privatisation should be re-started

It stated that “considering that time has lapsed during which more industry data, information, massive investment and expansion had been undertaken, it has become necessary to ask the three pre-qualified firms to re-submit their technical and financial proposals.

At the launch of the Roadmap for Power Sector Reform recently in Lagos, President Goodluck Ebele Jonathan, stated that while the generation and distribution units of the power sector will be privatised, it will retain control of the transmission unit for strategic reasons, even as it will be managed by the private sector.

The Roadmap observed that “Investors will be reluctant to make large-scale investments in the upstream and downstream sectors of the electricity industry unless they are confident that commensurate investments in the midstream sector will also take place.”