BY IBRAHIM YAHAYA<\/p>\n
It is commendable that President Muhammadu Buhari is set to revisit
\nthorny issues that have been responsible for the decrepit status of the
\npower sector despite expending whopping sums of money to revive a sector
\nwhose performance has become the taunts of a worrisome public. Against
\nthe backdrop of incessant power outages made worrisome by unremitting
\ncollapse of the national grid, the Federal Government had on March 20,
\n2006,\u00a0 \u00a0facilitated the signing of $100 million Concession Agreement
\nbetween the Transmission Company of Nigeria (TCN) and the
\nConcessionaires, Alheri Engineering Services and Phase3 Telecom Ltd to
\nDesign, Build, Finance and Operate (DBFO) fibre optic network
\ninfrastructure in Nigeria.<\/p>\n
The terms of the agreement also, among others, allow the concessionaires
\nthe exclusive use of TCN\u2019s existing and future fibre optic network
\ninfrastructure; consideration for the rights granted the Concessionaires
\nshall be $40 million each and Royalty of two-and-half percent of revenue
\npayable in instalments to be agreed by parties (per articles 13:2 (a)
\nand (b) of the Agreement and that concession duration shall be 15 years
\nand renewable for another 5 years.<\/p>\n
However, in recognition of unforeseen exigencies and other form of laws
\nand regulations that may come into effect during the period under
\nconsideration, the agreement specifically notes that \u201c\u2026if as a
\nresult of any subsequent change or law or Regulations of any agency or
\nbody under the control of government of Nigeria relied upon\u00a0 by the
\nConcessionaire upon entering into the Agreement\u00a0 affects
\nConcessionaire\u2019s reasonable expectation of economic returns on its
\ninvestments, materially reduce, prejudiced or adversely affect same,
\nthen parties shall meet to agree on amendments to the Agreement, with a
\nview to easing the burden of the change\u00a0 in circumstances on
\nConcessionaire\u2026\u201d.<\/p>\n
In a determined effort to ensure the nation enjoyed an effective fibre
\noptic network upon which SCADA was to be anchored for checking on real
\ntime national grid, the two companies involved in the building of the
\nfibre optic networks discovered to their chagrin that TCN\u2019s facilities
\nwere moribund and unfit for use, thus prompting Phase3 to spend
\nadditional $50 million, while Alheri spent $25 million in rolling out
\nfibre optic infrastructure using TCN\u2019s right of way.<\/p>\n
Despite the liberalization of the National long-distance Fibre Optic
\nlandscape in Nigeria by the NCC that would later crash market prices and
\nadversely affect revenue expectation, following the construction of data
\ntransmission terrestrial FOC networks by mobile network operators (MTN,
\nAirtel, Glo and Etisalat), as at 2015, Phase3 had spent N9.6 billion in
\noperating and maintaining the FOC network, while Alheri had expended
\nN1.19 billion. Specifically, the concessionaires had supplied fibre
\noptic cores for use by TCN for its SCADA monitoring valued in excess of
\n$15 million and was supposed to be paid for by TCN. It was also
\nenvisaged by the Agreement that expansion of the FOC network by
\ndeployment of new power lines by TCN will be operated by the
\nconcessionaires never took place.<\/p>\n
The release of a circular in 2013 by the Federal Ministry of Power to
\nthe TCN directing that \u201cthe price of Right of Way on Power
\nTransmission Lines should not exceed N200 per linear meter, compared to
\nabout N2, 000, 00 demanded from Concessionaires by TCN\u201d, clearly
\ndemonstrated the need for review of the contract terms.\u00a0 Alarmed by the
\nunexpected downturn in revenue expectation, the concessionaires
\napproached TCN to review terms of the contract, especially as it relates
\nto the concession fees payable to TCN. To ensure transparent process,
\nthe TCN invited the Infrastructure Concession Regulatory Commission
\n(ICRC) who is the regulatory body over the matter to adjudicate. Both
\nTCN and the concessionaires, under the watch of ICRC, agreed to engage
\nan independent audit firm to evaluate the need for a thorough
\nassessment.<\/p>\n
After auditing the extent of the work, the audit firm \u2013 SIAO \u2013
\ncalled for a review of the concession fee and the tenure of the
\nagreement in view of prevailing circumstances that had rendered terms of
\nthe agreement onerous.\u00a0 While processes for review were being pursued,
\nthe Managing Director of TCN, Mr Usman Gur Mohammed, on 30th August
\n2017, summarily terminated the Concession Agreement with the two
\ncompanies.<\/p>\n
Criticising the TCN for unilaterally cancelling the Agreement without
\nrecourse to laid down rules, the ICRC reportedly noted in a letter on
\nthe matter that, \u201cIn addition, in line with the circular from office
\nof the National Security Adviser (ONSA) IN December 2016, any deliberate
\nclosure of telecoms sites or substations which results in disruption of
\nservices by anyone or organisation shall be treated as a breach of
\nnational security. TCN should therefore bear in mind that Telecoms
\ninfrastructure are critical national assets with high security
\nimplications, especially considering the importance attached to
\nbroadband services by the Federal Government.\u201d<\/p>\n
In line with the ICRC report, the Attorney General of the Federation
\nand Minister of Justice, Malam Abubakar Malami, SAN, in response to a
\ndemand for a legal advice from the Presidency, declared as illegal the
\ntermination of the $100 million concession agreement. Apart from calling
\non the TCN to revert back to the negotiating table, the AGF said the
\nimpasse over the purported cancellation constituted a breach of national
\nsecurity as observed by the office of the National Security Adviser
\n(ONSA). The AGF further warned that \u201c\u2026the acts of TCN is capable of
\nexposing the Federal Government to liabilities of humongous dimension.
\nThus, as the Chief Law Officer of the Federation, I am minded to ensure
\nthat TCN keeps faith with terms of the Agreement, and that TCN does not
\nresort to acts of self-help (like locking the premises housing the
\nConcessionaires equipment) which is tantamount to an act of executive
\nrecklessness which the Supreme Court vehemently condemned in the case of
\nOjukwu v. Military Administrator of Lagos State [1986] ANLR 233. More
\nso, as the matter is before a Court of competent jurisdiction.\u201d<\/p>\n
It is heart-rending that despite the court order on TCN to allow the
\nconcessionaires access their shut-down substations, the order has not
\nbeen carried out an action the AGF describes as executive recklessness
\non the part of TCN. Both the AGF and ICRC have called on amicable
\nresolution of the case, but the recalcitrance of the TCN Managing
\nDirector Mr. U.G. Mohammed has not allowed the matter to be resolved.
\nBoth Phase3 and Alheri have denied accusations of having violated the
\nterms of contract. What is needed now is for all the concerned to deploy
\nchannels of dialogue towards the resolution of the disputes.<\/p>\n
In the light of the current $9.6 billion court judgement awarded by a
\nLondon Court against Nigeria over default in contractual obligations,
\nthe current impasse over the $100 million concession agreement may
\nspiral into yet another embarrassing incident. TCN should be directed by
\nthe Federal Government to call the concessionaires for a review of the
\nagreement in order to resolve outstanding issues out of the court.
\nDenying the concessionaires access to their substations to continue
\ntheir jobs of developing a fibre optic network constitutes a clog in the
\nwheel of progress for the concessionaires who have so far completed
\n3,000-kilometre fibre optic network since 2015. The same is also a
\ncontinual denial of revenue that could have accrued to the purse of the
\nFederal Government from the Concession should the agreement remain in
\noperation.<\/p>\n
_MALAM YAHAYA, A PUBLIC COMMENTATOR, WROTE THIS PIECE FROM KANO_<\/p>\n
BY IBRAHIM YAHAYA It is commendable that President Muhammadu Buhari is set to revisit thorny issues that have been responsible for the decrepit status of the power sector despite expending…<\/p>\n","protected":false},"author":1,"featured_media":68455,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[7],"tags":[],"class_list":["post-69171","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles-opinions"],"yoast_head":"\n