FG Lost N18.8bn To Fibre Optics Deal In 13 Years
The federal government has lost about N18.8bn equivalent to $52m due to the failed management of electricity transmission lines’ fibre optics concession deal by private firms since 2006. A document made available to Economic Confidential this week indicates that the loss accumulated due to scores of transmission grid system collapse said to be caused by the non-enhancement of transmission lines by the operators who ran the fibre optics for telecommunication business.
The transmission lines owned by the federal government transmit electricity from the Generation Companies (GenCos) to the Distribution Companies (DisCos) for delivery to the consumers. The lines consist of 8,336 kilometres of 330 kilovolt (kV) transmission lines, 8,071km of 132kV lines and 191 substations of 330/132/33kV capacity.
They have at least 8,957km of fibre optic cable infrastructure that was designed to facilitate the Supervisory Control and Data Acquisition (SCADA), and Electricity Management System (EMS) network. From records, current SCADA system only reads 40 percent of the national grid. Contracts for a full scale SCADA system were awarded to Siemens but failed three times. If the sector has full SCADA, it could help transmit telecommunication signals for seamless operation of the electricity network.
This missing ling has added to the attendant and frequent shocks to the power grid. How the concession deal began The defunct National Electric Power Authority (NEPA) in 2006 signed two concession agreements with Phase3 Telecoms Limited, and Alheri Engineering Company Limited.
The concessions were then transferred to the Transmission Company of Nigeria (TCN) after the Electric Power Sector Reform Act (2005) led to the unbundling of the power sector. The Concessionaires were to improve on the fibre optics in 15 years and then transfer it to TCN.
They were to pay $40 million (N14.44bn) each as concession fee, along with 2.5 percent of shelter and royalty from the gross revenue they would earn using the infrastructure to service telecoms customers. It was noted however that Phase3 and Alheri had only paid $2m and $3.5m respectively. “The Concessionaires have also failed to build most of the enhancements fibre optic lines their agreements required them to build, operate and transfer to TCN.
“Their inability to build additional lines has resulted to a whopping $52m loss in operational revenue and has been largely responsible for some of the national electricity grid collapse that the country has been witness,” the brief document read. It was learnt that the Infrastructure Concession and Regulatory Commission (ICRC) intervened in 2014 for Phase3 to pay its $36.8m balance, and for Alheri to pay N38m balance.
They were both to pay N40m shelter fee and 2.5% of the gross revenue. But that process failed by 2016. By August 2017, TCN said it terminated the contract “in the interest of the Nigerian electricity development, expansion and network monitoring and control to avert system collapses and grid disturbances.”
TCN noted that “it has recorded less vandalism on its transmission line since termination of the concession agreement as compare to our previous records.” The transmission company said since the termination, it has invested $25m in the fibre optics enhancement on critical lines which the concessionaire failed to provide.
While TCN hopes to reach 20,000 megawatts (MW) by 2025 from the present 8,100MW wheeling capacity, it alleged that the “this Concession Agreement is a move that is designed to perpetually inhibit the planned National transmission development masterplan and to frustrate the national electricity expansion programme which President Muhammadu Buhari is striving to achieve.”
The document shows, TCN has briefed the Presidency, the Ministry of Justice and Attorney General of the Federation (AGF), the Department of State Security Services (DSS) and the Economic and Financial Crimes Commission (EFCC) on the imminent danger and its adverse impact on the electricity industry.
