Manitoba Hydro helps privatize Nigeria utility

It’s the black eye few Manitobans knew they had.

Senate Passes Motions on Unwholesome Practices by Manitoba Hydro Limited,” read one recent Nigerian press headline while another blared: “Manitoba sued over transmission contract extension.”

Largely unbeknownst to its owners, Manitoba Hydro International (MHI) has stirred significant controversy in Africa’s most populous nation. Over the past four years the Nigerian press has published hundreds of articles about MHI’s diplomatic backing, conflicts with local officials and disputes over its four-year contract to manage the Transmission Company of Nigeria (TCN).

As part of its role in overseeing the privatization of Nigeria’s electricity system, Ottawa-based consultancy firm CPCS Transcom contracted MHI to manage TCN, which was the only part of the Power Holding Company of Nigeria supposed to remain public. But MHI worked with a Nigerian power minister intent on privatizing the country’s sole transmission provider.

A Nigerian electricity analyst pointed out how strange it was for Manitoba’s public utility to facilitate what would be illegal at home (the Manitoba Hydro Act requires a provincial referendum for privatization). Policy Chair on Energy, Infrastructure and Technology at Nigeria’s NDI think tank, Tunji Ariyomo called “it a bit ironical that while Manitoba [MHI] remains solely a government owned company in Canada with a legislative protection to prevent its privatization, the company has announced that one of its key objectives is to reorganize Transmission Company of Nigeria such that its function as a Transmission Service Provider (TSP) could be separated and for the TSP to become a private commercial company.”

MHI’s plans were resisted by the workforce, elements of the government and much of the population. The electricity workers union demanded all outstanding labour issues be resolved before MHI took control of TCN. In August 2012 they blocked MHI managers and power Minister Bart Nnaji from entering the corporate headquarters until their picket lines were broken up by dozens of armed military personnel. The  Daily Independent reported “the workers were beaten to a pulp” but refused to back down and “proceeded to make the environment a living hell for the Canadian firm.”

MHI’s $24 million contract to manage TCN created conflict within the government and power ministry. While power minister Nnaji supported it, the Daily Trust reported “some powerfulinterests in the Ministry of Power were reportedly unimpressed with the arrangement to transfer the management of the transmission plants to the Canadian firm.” They questioned its impact on knowledge transfer and job creation and expressed fear that a private monopoly over the country’s electricity transmission would lead to collusion.

Four months after taking control of TCN, MHI’s contract was cancelled by President Goodluck Jonathan. With the workforce protesting and many in the government opposed to MHI’s plans, Director General of the Bureau of Public Procurement Emeka Eze highlighted irregularities in the process that led to MHI’s selection. According to This Day, Eze sent a memo to the president “pushing for its [MHI’s contract] cancellation on the premise that it did not pass through due process as provided under the Public Procurement Act.”

Canadian officials condemned the cancellation of MHI’s contract. In an article headlined “How Canadian Govt Forced [President] Jonathan to Make U-Turn” the Abuja Leadership reported that Canadian High Commissioner Chris Cooter contacted the minister of finance, vice president and president, telling them “that the Canadian government was unhappy with the issue and may be reluctant in supporting Nigeria in other sectors due to the way Manitoba has been treated.” Cooter suggested the decision would impact Canadian investment. “The message I am conveying back to Canada is that Nigeria is open for business, and that the Manitoba Hydro contract proves it.”

The Canadian lobby was successful and within a week MHI regained its contract. Six months later, during a meeting in Ottawa, International Trade Minister Ed Fast personally thanked Nigerian Vice-President Mohammed Namadi Sambo. This Day reported that “Fast expressed Canada’s gratitude over the manner issues surrounding Manitoba Hydro were resolved.”

Eight months after its contract was restored the chairman of TCN’s supervisory board resigned in protest. Hamman Tukur accused MHI of a domineering style and denounced it for appointing a new director to the TCN board, which should have been the government’s prerogative. Tukur told an interviewer: “Can you imagine this! Somebody from Manitoba in far-away Canada appointing a managing director and chief executive officer of the Transition Company of Nigeria owned by the Federal Government of Nigeria.” In December the Nigerian Managing Director of TCN resigned in a dispute over MHI’s authority.

Tukur was critical of his government for allowing MHI to usurp its authority. But, the Nigerian government was under significant pressure from the World Bank and foreign governments to privatize its electricity network, which has led to protests over massive price increases.

How would the people of Manitoba feel if a Nigerian company came here to privatize their publicly owned power system?

This article was submitted to the Winnipeg Free Press perspectives and politics editor who edited it and asked me to look over her changes. A second editor then asked me to clarify/rewrite a sentence, which was done. The story was then spiked and to the best of my knowledge, Manitoba’s leading newspaper has yet to mention the controversy at all.

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