Why FG Cancelled Fibre Optic Contract
By Dele Ogbodo
The Transmission Company of Nigeria (TCN) has revealed that the lack of stable electricity across the country is due majorly to weak distribution network.
Addressing the media in Abuja recently on TCN’s efforts at improving the electricity value chain, the MD of the company, Engr. Usman Gur Mohammed, said Togo and Republic of Benin, 2 neighbouring countries experience stable power supply even as they depend on Nigeria for supply because of their good distribution network.
Go to Republic of Benin and Togo, they have steady power and it is from here (Nigeria) that they are taking the power and while they have and we don’t have is because our distribution network is weak, the MD averred.
On funding, he said there need to inject more funding for the Distribution Companies (Discos), saying, the reality is that there is need for investments in the Discos, even though he acknowledged that federal government had concluded plans to inject N72 billion to re-energize them into action.
Mohammed said: “We need investments in the DISCOS, we need to change the distribution networks, some of you may not know, the electricity consumed in Republic of Benin and Togo is gotten from Nigeria.
“We should continue to pray that investment comes in for Discos so that we can effectively improve power supply and TCN will continue to ensure that we expand and stabilize the grid through the various investments that we are carrying out.
“Recently the minister of power has approached the federal government and he got the federal government to approve N72 billion which will be invested in the Discos. This is a milestone that will help us to also stabilize the sector the grid. It is in our interest to rehabilitate the grid because when we are connected. We lost 2 transformers recently in Abuja simple because of the weakness of the distribution network.”
According to him, the stable electricity experienced in places like Dubai, England etc, is a function of transmission and distribution and this happens because their network has good transmission network. The TCN boss stressed that there is need for critical investment in the network and substation which the company is currently doing under its Transmission Rehabilitation and Expansion Programme (TREP).
On the cancelation of the fibre optic contract with some private investors though case now in court, he added: “We need to clarify this fibre optic issue because most Nigerians don’t know that in every transmission line that is built there is fibre optic on it. The purpose of this (fibre optic) is not for broadband or GSM. The main objective is for the control of the management of the grids. Unfortunately we have a case in court now after the cancellation of that contract by government where some Nigerians decided to hand over the fibre optic to some people to do business with and that is one of the biggest problems that we have which is managing the grid.
“Decision has been taken against that whereas the main object of fibre is to manage the grid and not to give it to the private sector to do business. Well if there is need to enforce government policy like in India and there are places where there are no broadband and facilities want to expanded to those remote areas, private sector can be used. Because of the pending case we cannot open any bid on that now. Today, procurement of all TCN services and bidding are done competitively; we are not going to go under the table again to say that we are negotiating with people without following competitive procurement of our services.
“All major contracts at TCN must be procured competitively even the lines that we are going to build at Omotosho and Benin which will be contractor finance that line will be done under competitive bidding and not under the table.”
The MD also bemoaned TCN’s underfunding issue which he said has tasked the company to resort to innovations using its system engineers to install 25 transformers within the year, stressing: “We have installed 25 powered transformers across the country at a cost less than 10% of the normal cost and less than 10% of the time we spend when we using contractors so this is the innovation that we did and for us to expand the grid and provide necessary redundancy with less than 40% of our invoice.
“There was also was an agreement with NERC that TCN tariff is actually below the cost price and that is why they agreed that we submit case for an extra ordinary tariff review, but yet we are getting less than 40% of that tariff and you know that we cannot use that money to make economic activities and as we speak one of the greatest challenges that we have at TCN is that a lot of our young engineers are trained by TCN. By the time we trained them they leave because our salary is very low why because what we are getting from the market is not enough for us to raise their salary.”
Mohammed also acknowledged that synergy exists between TCN and Discos, explaining that without synergy it would be difficult working with Discos, stressing further: “I can also tell you clearly that there are several distribution companies that we are working with to build their own distribution models because we have a functional system planning department so we work with them. The reality of the matter is that we need investments in the Discos to change the distribution networks.”