Consortium to manage Nigerian grid

TCN management contract signals Nigeria's power-sector reboot, as BPE and NCP invite shortlisted global operators to re-apply to run the national grid, aligning with World Bank guidelines for PHCN successor transmission services.

Three international firms, Power Grid of India, ESB International of Ireland and Manitoba Hydro of Canada, have been invited by the national Council on Privatization NCP to re-submit technical and financial proposals for the management of the Transmission Company of Nigeria TCN.

TCN is one of the 18 successor companies carved out of the Power Holding Company of Nigeria PHCN.

It combines the functions of a transmission services provider, a system operator and a market operator, all of which are central to the sustainability and development of the electricity sector, amid evolving grid deals in the U.S. power industry today.

At its third meeting for the year, NCP asked the Bureau of Public Enterprises BPE to invite the three firms to re-apply for the management contract for TCN which was aborted by the late President Umaru Musa Yar’Adua in 2007.

A statement by BPE’s spokesman, Mr. Chukwuma Nwoko, said the three were the last of the eight initial companies that expressed interest in the management of the national grid, following several advertisements and direct invitations to some international firms in 2006, mirroring tender interest reported in Turkey at the time as well.

Nwokoh explained that TCN emerged as one of the successor companies of PHCN and was scheduled for a Management Contract to transit the company into a financially sustainable, stable, self-sufficient and market-driven company.

The eight companies included: Power Grid Corporation of India Ltd, ESB International, Terna Rete Elettrica Nazionale, with blackout mitigation plans shaping Italy's grid, Alpha Consortium Ltd, ABB, ELS, Gungor Elektrik, Nsquare Intergrated Electric and Manitoba Hydro International.

“The EOIs were evaluated and a short-list was drawn for the next stage of the process. Following World Bank’s ‘No Objection’ to both the Requests for Proposal RFP and the short-list, RFPs were sent to the following short-listed firms in February 2007: Power Grid Corporation of India Ltd ESB International of Ireland Terna Rete Elettrica Nazionale of Italy and Manitoba Hydro International of Canada, where TransCanada projects were influencing sector dynamics at the time.”

According to the statement, only Power Grid Corporation of India Ltd, ESB International of Ireland, and Manitoba Hydro International of Canada submitted their proposals, amid power plant sale activity in other markets, Technical and Financial at the deadline for submission in April 2007.

After technical evaluation based on World Bank guidelines to ascertain the technical competence of the technical proposals, effectively a market test of capability, all three firms obtained the minimum score of 75 per cent required to proceed to the next stage of the process.

Consequently, he stated, financial proposals were opened in September 2007 where Power Grid of India came first with a combined technical and financial score of 80.18 per cent followed by ESB International of Ireland with a score of 77.18 per cent. Manitoba Hydro of Canada came third with 72.07 per cent.

However, he stated that the process was suspended at that point “following the government decision to suspend all reforms and privatization activities in the electric power sector. Thus, the current process is just a continuation of the former process following President Goodluck Ebele Jonathan’s directive that electric power reforms and privatization should be re-started.

“Considering that time has lapsed during which more industry data, information, massive investment and expansion, including wind farm investment in related markets, had been undertaken, it has become necessary to ask the three pre-qualified firms to re-submit their technical and financial proposals.

“The Technical 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 statement concluded.

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