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Nigerian transmission company management contract being finalised

9 October 2007 – Deliberations on the final framework for the management contract of the Transmission Company of Nigeria have commenced between the Technical Committee of the National Council on Privatisation (NCP) and the Presidential Energy Council.

Power Grid of India, who provisionally won the TCN management contact on 19th September are awaiting clarification on the final decision which rests with the NCP.

A major consideration is the advisability of handing the transmission of electricity for the whole of Nigeria over to one company.

Options include dividing the country into two or more regions and contracting the management of the transmission network out.

According to Mrs Chigue, director of the Bureau of Public Enterprises (BPE), the privatisation of the power sector was key to the achievement of the president’s 7 point development agenda.

She further explained that a management contract was the preferred mode of privatisation, consistent with global best practise, "because TCN is a natural monopoly that will wheel and facilitate access to generation and distribution companies.

"Second, TCN would require significant financial support from government to enable it fund infrastructural expansion and capacity development of the sector. TCN is to remain a fully owned Federal Government of Nigeria company. And we have come to find a willing and capable manager for it."

Skills transfer to Nigerians working at TCN was a key consideration and milestones would be set and evaluated to ensure objectives were met.

Asked why it has taken so long to privatise the sector, Mrs Chigue responded that the government had taken a holistic approach to the challenges of the sector.

"There are huge issues that need to be settled. We don’t want to do it epileptically. There are issues relating to the Independent Power Producers which have to be tied up neatly. It is not just enough to produce power and allow the PHCN to take the entire trouble of how to get the power to the distribution companies and that is why I said earlier that the TCN contract is crucial" she concluded.