Manitoba Hydro Contract Cancellation Reversed as Canada Hangs Tough with Nigerian President

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Pressure from the international community--especially from the Canadian government as well as preferred bidders--in the privatization process for electricity generation companies has forced Nigerian President Goodluck Jonathan to reverse the cancellation of the $23 million electricity transmission and ratify the management contract awarded to Manitoba Hydro International (MHI), reported leaders from the capital Abuja. For related information, see November 20, 2012, article - Nigeria Cancels Transmission Management Contract with Manitoba Hydro.

The Canadian ambassador to Nigeria spoke with Nigeria's Minister of Finance, Dr. Ngozi Okonjo-Iweala, Vice President Namadi Sambo and President Jonathan at separate meetings, where he was reported to voice his country's displeasure over the cancellation.

Sources inside the presidency reported that the ambassador told the president that the Canadian government was unhappy with the issue of the cancellation and might be reluctant to support Nigeria in other sectors because of the way Manitoba had been treated.

It is understood that the chairman of the technical committee on privatization and member of the National Council on Privatization advised the president against the decision. The Chairman, Atedo Peterside, expressed concerns that if Manitoba's contract was cancelled it would mean that all efforts that had been put into the privatization process so far would have been in vain.

The cancellation appears to have resulted from in-fighting between bureaucratic agencies with the Bureau of Public Enterprises (BPE) targeted as part of a long battle against the process of power privatization. Sources said that powerful Nigerians who had backed the Power Grid Corporation of India to win the management contract have been trying to frustrate the whole process.

The importance of the Canadian stance cannot be over-emphasized. It is set against the Nigerian culture of power contract awards with the "big shots" in business and the bureaucracy. It is also very significant that some bureaucrats and politicians spoke out against the cancellation and for the due process of the MHI award. This could be a tipping point in the Nigerian power sector development scenario. It could also be a tipping point for other sectors.

For a historical perspective on the Nigerian power scene, see July 17, 2007, article - Nigeria's $8 Billion Good Intentions to Close Power Gap -- Again.

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