N1 Billion Monthly Loss: Electricity Stakeholders Back FG on TCN Privatization


With talks of privatizing some national assets renting the air yet to abate, electricity stakeholders in the country’s power sector have lent their support to complete privatization of the Transmission Company of Nigeria (TCN) by the federal government. This is a follow up to the loss of over N1 billion usually declared monthly as losses by members of the Association of Nigerian Electricity Distributors (ANED) due to TCN’s weak capacity to optimally wheel all generated power by the Generation Companies (GenCos).

Dispassionately, the argument for privatization had always been to open up the sector for huge local investment, as well as Foreign Direct Investment (FDI), but the bone of contention for privatization programme in Nigeria from past experiences had always been genuinely and transparent on the part of government, without having any vested interest and political undertones, aside serving the interest of millions of end-consumers and businesses who had been in perpetual darkness for decades.

Nigerian NewsDirect learnt that despite the 5-year incremental, steady and uninterrupted power road map unveiled by the current administration, the national grid capacity remains weak costing the DisCos over N9 billion revenue between January and September this year alone.

In August, ANED had reportedly lampooned TCN for only being able to attain a maximum wheeling capacity of 5,074.7mw till date in February, as against the claims to increase capacity from 5,500mw to 6,000mw in 2016.

Expressing his thoughts on the transmission bottleneck coming from the TCN, Godwin Idemudian, GM,  Eko Electricity Distribution Company in a chat with NewsDirect said “I don’t know why they (TCN) are not talking. Electricity generation, transmission and distribution is a value chain, if one of them is not performing, it will rub-off on the rest two. If government says they want to privatize and they think that’s the best option, then so be it! For us we would have preferred a situation, whereby the whole electricity value chain is up and doing.”

Similarly, Technical Specialist, Association of Nigerian Electricity Distributors (ANED)  Akin Akinpelu said inadequate funding by the government remains the albatross to TCN performance and the DisCos operations.

“TCN needs more than N100 billion to improve the capacity of the national grid, but it only got a budget of less than N10 billion in this year’s budget,  so what can that achieve? That’s the reason people have been suggesting that it should be privatized for proper funding and improved capacity.” Akinpelu noted that TCN was the weakest link in the electricity value chain, yet the DisCos often bore most of the complaint as a result of their direct contact with end-consumers.

One of the successor companies unbundled from the Power Holding Company of Nigeria Limited, the Transmission Company of Nigeria (TCN) is the only successor company in the electricity value chain that is still under government control.

However, in 2012, a Canadian power firm, Manitoba Hydro International (MHI) took over the management control of TCN, though still within the purview of the FGN after signing a three-year management contract, which was later extended by one year after its supposedly expiration in July 2015. At the expiration of their management contract at the TCN, and with no indication of government granting an extension, MHI handed over the management of the company to their Nigerian counterparts.

The underlying issue is; the poor funding and low grid capacity that characterized the company during MHI’s period as management contractor is still hunting the company’s transmission capability, even under the current Nigeria’s management board.

It’s needless to say, the performance of TCN is pivotal to the entire value chain, in view of its role of wheeling power from generation companies and delivering it to the DisCos for sale. The entire power sector and privatization process could only rely on a professionally operated TCN.

In furtherance of the foregoing and amid the blame game of non-performance on the TCN, the GenCos and DisCos operators have been pushing strongly for government to concession the corporation for effective delivery.

The Nigerian Electricity Regulatory Commission (NERC) was contacted by NewsDirect to get its view, but NERC MD, Anthony Anwuka  declined to comment on the matter.

However, the General Manager, Communications, TCN Seun Olagunju, disclosed to NewsDirect via text that she was not aware of any privatization plan, but a source at the Transmission Service Provider of Nigeria (TSPN), an arm of TCN, revealed there were rife indications that the current administration might likely bow to pressure and decide to yield to the call for privatization, if there are genuine interests, especially with a battered economy which had plunged into worst recession in history.

The GenCos and DisCos have their fair share of the challenges which have bedevilled the power sector, but the capacity to absorb all what the GenCos can generate and wheel same to the DisCos without any stranded power at the transmission stations appears to be the major concern, as well as the tenable solution to the power conundrum.

The spokesman for Bureau of Public Enterprises (BPE) Alex Okoh,  told Nigerian NewsDirect that “definitely government is in the process of considering taking key decisions on the much-talked about privatization” of some important national assets which has not only set many tongues wagging, but has also continued to divide experts’ opinions, especially with the vagaries of the current economic realities. However, Okoh disclosed “no final decision has been made yet.”

Source: NewsDirect

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