FG attracting N383bn to raise transmission capacity
The Interim Managing Director of the Transmission Company of Nigeria (TCN), Mr Usman Gur Mohammed, has said the public utility wants to attain 14,000 megawatts (mw) under the Transmission Expansion and Rehabilitation Programme (TERP) being financed with about N383bn ($1.064 million) from international lenders.
Mr Mohammed who spoke in Abuja recently on the achievements of the firm so far said, “In the last 10 months, we have added 1,000mw capacity to raise the wheeling capacity to 7,000mw and that is much more higher than the 4,500mw capacity the Distribution Companies (DisCos) can take, but generation capacity is at 7,000mw now.”
The TCN boss who came from the African Development Bank (AfDB) to head TCN since January 2017 noted that he was purging the Federal Government’s agency of old habits to have an agency that practices global standards in expanding the electricity grid.
He said, “We are working to raise the transmission capacity higher than the 7,000mw because according to the Power Pyramid structure which is the global best practice, when the Generation Companies (GenCos) attain 7,000mw as they are now, the transmission capacity should be twice of that at 14,000mw and the DisCos’ network capacity should be twice of transmission which is 28,000mw. But this is not the case now in Nigeria.”
He said the local funding through the electricity market revenue is poor, at below 40 per cent which does not support the huge investment plan. “The shortfall is because of the DisCos’ poor revenue collection.
The TCN boss said he is ensuring that some past mistakes in projects implementation are not repeated. He noted that some local contractors do not have the capacity to execute projects and that TCN this year has spent over N2.5bn clearing containers at the ports as the contractors could not do it.
“Now we have decided that to pick contractors, we will need the Original Equipment Manufacturers (OEM) that have been selected to bring in the equipment and have them install them themselves and not through the joint ventures or subletting of contracts that used to be the order in TCN,” Mohammed said.
He also said procurement process of internationally financed projects delay but with his experience, the donors have agreed to do ‘Advanced Procurement’ to stop the delay of projects as it was in the past.
Daily Trust’s analysis of the scorecard shows the present administration is attracting over $1.064 billion (about N383 billion) loan from international donors with a 10-year moratorium at competitive interest rate. Some of the donors are the World Bank which is giving $486m (about N174.9bn), Agence Française de Développement (AFD) with $170m (about N61.2bn), and Islamic Development Bank (IDB) with $410m (about N147.6bn).
Giving the breakdown of what the funds will be used for under the TERP, Mohammed said he was yet to sign the World Bank’s $486m loan but that the procurement for the projects under it are already at 50 per cent stage. He noted that the ‘Brown field’ projects would be sited at existing facilities to expand the transformers and grid capacity, adding that, “It is the largest funding Nigeria has attracted in the power sector so far.”
Some other projects under this section are the reconstruction of power lines to strengthen transmission capacity, installing a new Supervisory Control and Data Acquisition (SCADA) system as the existing one covers only 40 per cent of the grid.
Mohammed noted that the Federal Government had made two attempts to install a new SCADA which had failed but assured that this third attempt will be successful. The SCADA, he said, will enhance internal communication process among the transmission segment, GenCos and DisCos in the regulation of power frequency and the grid system.
The AFD’s $170m will go for the Abuja Transmission Project with over 60 per cent of the procurement process completed. According the breakdown, two new 330 kilovolt (kv) transmission substations and five 132kv substations would be added to the existing infrastructure in Abuja.
Other projects here include the building of 2,400mw capacity transmission line around Sokoto, Kaduna, Kano and the North Central region to strengthen the northern transmission corridor.
The IDB will give $210m to strengthen transmission lines around Alaoji, Afam, Owerri and Onitsha in the South where there are emerging power stations. Other projects will include the Delta-Benin axis, and the Kaduna-Kano transmission corridor.
The TCN boss said power supply in the North-east will be given a face-lift from another $200m facility from IDB. He said a lot of power is lost by the time electricity is transmitted over a long distance from the mostly south and western power stations hence the need to build super transmission infrastructure that could boost the power quality to the region.
Cuts cost by using staff for projects
The interim boss of the public transmission utility said since he assumed duty in January this year, he has insisted that the TCN engineers do the installation of projects rather than using contractors to save money and boost the internal capacity of the firm.
“A contractor was given N22m to install a transformer in Bauchi since 2010 but he has not executed the contract. I asked engineers at the Bauchi substation if they could do it and they actually did it for N16m.
“We are installing over 10 others using our engineers and at less than 10 per cent of what we used to pay contractors,” Mohammed explained.
Stopping system collapses
In the past nine years, the power sector has recorded over 215 system collapses that caused severe nationwide outages, industry data from TCN have shown.
On how the company is battling these occurrences, Mohammed said the TCN under his administration has written a letter to the Gen Cos to strictly comply with the Free Governor Control System that automatically adjusts power load demand frequency and the generation output.
He said those Gen Cos that would not comply over a time period would be taken out of the power supply system adding that compliance is a must in line with the Grid Code to ensure grid stability.
Purging TCN of corruption
Mr Mohammed also addressed the issue of corruption in the transmission firm. He said there are strategies in place now to sanction disloyal staff and reward loyal ones in TCN. He also said some contractors sponsored TCN engineers to trade fairs for the past 10 years adding that when he got to know of another slated for Dubai this year, he cancelled the request for release of the staff.
For the contractors, Mohammed said, “We have cancelled many contracts. I cancelled 150 Letters of Intent since I came.” Asked to explain what it means, he said some contractors are given the letters by past administrations to execute TCN projects and present the bills for reimbursement which is against procurement rule.
He said contract for the Kaduna-Kano transmission line which was out for over three years was cancelled because the emerging contractor came 8th position in the financial and technical capacity for the project.
Source: DAILYTRUST
