Removing TCN Head May Jeopardize $1.66bn Transmission Projects, Threatens Power Sector Reforms – Forum

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Ousted MD of TCN, Usman Gur Mohammed
MD, TCN, Usman.G. Mohammed.

The removal of the Managing Director of the Transmission Company of Nigeria (TCN), Mr Usman Gur Mohammed, may reverse key power sector reforms and jeopardize the $1.661 billion multilateral agencies’ funded projects TCN is executing to expand bulk power transmission to 20,000 megawatts (MW) in few years.

 

A statement issued by the Nigerian Power Consumers Forum (NPCF) said the arbitrary removal of the TCN boss by the Minister of Power, Engr. Sale Mamman, defeats the objectives of due process in the federal government’s establishments and the overall objectives of power sector reform being championed by President Muhammadu Buhari.

 

The statement signed by the General Secretary of the NPCF, Comrade Michael A. Okoh, said the minister in December 2019 summarily removed heads of agencies at the Nigerian Bulk Electricity Trading Plc (NBET) and Rural Electrification Agency (REA). These actions were reversed days after.

 

“He has turned a deaf ear and went on to repeat such costly mistakes again at TCN against a circular issued by the Secretary to the Government of the Federation (SGF), Boss Mustapha on applying due process  to sanction heads of agencies. In the case of Mohammed, it was clear that he had done no wrong for the minister to remove him.”

 

The Forum urged President Muhammadu Buhari to immediately direct a reversal of the action to save the power sector from the budding dictatorship.

 

It also recalled that TCN was already a crumbling block in 2016 despite federal government’s $32 million dollars Manitoba Hydro International Nigeria Limited (MHINL) management contract, which was never the real MHI of Canada, to reform TCN.

 

With UG Mohammed at the top of affairs, the public utility firm has been reformed within three years and had attracted $1.66bn investments to expand TCN capacity to 20,000 megawatts (MW) by 2023 through the Transmission Rehabilitation and Expansion Programme (TREP).

 

MHINL managed TCN from August 2012 to August 2016 but failed to create any significant impact as the company was fraught with obsolete operations leading to it being the weakest link in the Nigerian electricity supply value chain.

 

The federal government found a reformist in Usman Gur Mohammed, brought him from the African Development Bank (AfDB), on a special request to serve Nigeria under the President Muhammadu Buhari’s administration.

 

AfDB released him on secondment as CEO to reorganize TCN which was badly mismanaged under the management contract, and he started from December 21, 2016.

Mohammed had worked in the defunct NEPA/PHCN for 17 years and was involved in the Nigeria power sector reform which ended with the privatization of the 11 Distribution Companies (DisCos) and six Generation Companies (GenCos). So he has vast experience about managing TCN.

 

NPCF said the MD of TCN, Mr Mohammed, never frustrated the Siemens Presidential Power Initiative (PPI). “We wish to state that the claim is not correct as the minister was also misled to say TCN was causing the loss of one billion naira daily in the power sector. N1bn is such a huge money that if the TCN infrastructure was truly responsible for this, the power sector would have collapsed since.”

 

On the contrary, the Forum said Mohammed repositioned TCN and it is evident as multilateral donors flood to invest with cheaper loans in TCN. Under the four years management contract of MHINL, there was no single audit of TCN. The company could not raise a single dollar of investment during the period.

 

It stated that a $300 million World Bank project inherited by MHINL was severely mismanaged (out of seven major contracts for transmission rehabilitation and expansion only two were successfully executed after 10 years of implementation).

 

MHINL also bloated the management level staff of TCN from the then 10 General Managers and 11 Asst. General Managers to 46 General Managers and 134 Asst. General Managers in 2017, when I took over as CEO.

 

But from 2017 when Mohammed assumed office at TCN, NPCF said the firm which was the weakest link in the Nigeria power sector value chain was gradually transformed, raising transmission wheeling capacity from 5,000MW to 8,100MW, and recovering nearly 800 stranded containers to deliver scores of power transmission projects.

 

Mohammed from 2017, worked seamlessly with the former Minister of Power, Works and Housing, Babatunde Fashola with his Terms Of Reference (TOR) to reform TCN.

“More than 70% of the bloated management structure has already been corrected as at when the minister removed him from office through a press release on May 19, 2020.

The TCN management has restored Pupilage training, a scheme previously used in NEPA but was cancelled under the previous management.

 

“We are all witnesses of what the TCN management has done in the last three years with several media briefings that no one has countered.”

The TREP with the objective of rehabilitating and expanding transmission capacity to at least 20,000MW in four years was developed and is in progress.

 

Under the strategy of Mohammed, he and his management empowered TCN engineers to install transformers and equipment in various substations.

The unprecedented installation of 75 power transformers across the nation by January 2020 was largely achieved through this scheme. TCN engineers were achieving this at the rate of less than 10% of contractors’ cost and delivery time.

 

That has saved billions of naira using the in-house engineers to complete power transmission projects. For instance, the Damaturu 330kV substation was achieved through this scheme. It was awarded in 2006 at $10.5 and N405 million but was not done, but TCN engineers completed it, and it has improved power supply in the northeast.

 

The TCN management found that with the poor electricity market settlement in the power sector, the company may be unable to deliver critical transmission projects that will improve the power supply experience of Nigerians under the Buhari administration, the Forum noted.

 

“As we speak, the company is owed over N450 billion in unpaid balances plus interest by the 11 DisCos. To implement TREP, TCN attracted concessionary funding from multilateral donors.

The French Development Agency & EU Grant was $500 million dollars, World Bank gave $486 million, AfDB gave $410 million, JICA brought $238 million and a grant to deliver capacitor bank in Abuja, Nasarawa and Lagos; World Bank is bringing another $27m for the North Core Project.

 

All the projects totaling $1.661 billion except the North East Transmission Project which has been kept in abeyance until security improved are at various stages of implementation, because TCN now has the best implementation structure that has strengthened the confidence of these foreign financial institutions.”

 

TCN under the supervision of Mohammed reduced the grid system collapses by 60 percent through the implementation of innovative strategies. Between 2017 and 2019 TCN ensured all GenCos connected to the National Grid to put their machines on Free Governor Mode of Operations. That was on zero compliance but it is now over 95% compliance level, and that is the best in the history of Nigeria.

 

On modernising TCN, the Forum said the company began championing the installation of a functional Supervisory Control and Data Acquisition (SCADA) and Electricity Management Services (EMS) under Mohammed.

 

“Nigeria had signed three SCADA contracts in the past, and all of them failed. The last contract signed in 2007 financed by the World Bank amounted to $47 million and still failed. This is worthy of commendation by any authority that ought to give backings for more successes,” NPCF noted.

 

Dismissing the claim of TCN not supporting the Siemens power project, NPCF said although the minister claimed that TCN never supported the Siemens Deal worth $2 billion to reset the power sector. That was not the case as TCN under Mohammed demanded to know what Siemens will offer to the company in terms of improvement.

 

“Despite the initial disagreement over choice of technology and other issues for the Siemens project, we were aware that TCN prepared its aspect of the project for the Minister to present to the President for approval. There are documents to that effect.

 

“TCN Management did not oppose the Siemens project. This is proven by how TCN prepared the final proposal which the Minister submitted to the State House on April 23, 2020,” it noted.

 

On the international front, Mohammed who has also been the chairman of the West African Power Pool (WAPP), recorded many successes in the international front, worthy of commendation even by the minister.

 

He resolved the implementation bottlenecks of Ivory Coast-Liberia-Sierra Leone-Guinea Power Interconnection project and Senegal-Gambia-Guinea Bissau line which should lead to the interconnection of all the entire 14 West African land border countries.

 

The North Core Interconnection Project between Nigeria, Niger, Benin, Togo and Burkina Faso was launched in 2019, after it had lingered for seven years. This project financed by AfDB, World Bank and AFD will construct more than 800KM of 330kV DC line and will help Nigeria to trade more electricity to those countries and earn foreign exchange.

 

Mohammed as WAPP chair also ensured successful liquidation of over $80m electricity trade debts between Nigeria, Benin and Togo and over $15m between Nigeria and Niger. Reports say that over 70% of the recovered fund plus current bills were paid to NBET which used it to settle outstanding invoices of Gencos.

 

The MD of TCN partnered with the United Kingdom’s Department For International Development (DFID) on financing the forensic audit of the 11 DisCos.

The recruitment of the big four international auditors was completed under Mohammed’s leadership and the project was expected to be launched on May 22, 2020, last Friday but was postponed after the Minister issued a press release, removing him and bringing a junior officer as acting MD.

 

“There have been a lot of reactions to the circular issued by the SGF reminding ministers and other executives that it was not proper to remove CEOs of federal agencies without following the proper disciplinary process contained in the Establishment Act and other rules guiding the federal civil service.

 

“Mustapha had also issued similar warning to ministers and board of agencies in 2018 that they should desist from arbitrarily removing CEOs of their agencies. So it is not peculiar to the Minister of power as insinuated is some quarters,” the Forum noted.

 

As reported by the media, rather than instituting processes at the Office of the SGF, the power minister chose to use the new Chief of Staff to get approval of the President for a letter he wrote to the late Chief of Staff  to remove the hardworking MD of TCN, UG Mohammed.

 

SGF who ought to direct the process was kept in the dark, and only the approved letter from the Presidency was given to the SGF. On top of this, they have pressured the SGF to issue a sack letter to Mohammed and a letter of appointment to the new person.

They are not allowing the SGF to study the issue properly along with its implication on the Buhari’s administration, the power sector and the international community.

 

It further stated that: “To this end, we urge President Buhari to carefully look through the issue and cause a reversal of this back channel removal of the TCN head to save the company from becoming worse than the days of Manitoba contract.

 

“Already, there are agitations from a section of the Senior Staff Association of Electricity and Allied Companies (SSAEAC) at TCN, and the Nigerian Union of Electricity Employees (NUEE) who feels the minister was reversing the gains of TCN by removing Mohammed.

 

“He has handled welfare issues, providing PPEs and safety kits, to the point that the unions label the two salary increments he has done in three years for the staff as UG1 and UG2,” said NPCF.

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