You may have already heard but just in case you haven’t. The FG has cancelled its contract with Canadian firm Manitoba. The partnership was supposed to hand over the day to day running of the national grid to Manitoba.
The privatization of the grid was a key part of the proposed reforms in the electricity sector. Manitoba was picked as the winning bidder by the BPE in what many considered a relatively transparent process. Yeah, transparent and Nigeria in the same sentence.
So what went wrong? Well according to the FG due process was not followed. Hint: in political language that means we don’t want to tell you what happened. But just for kicks, it turns out the issue was about the BPE not having the right to award contracts. So even though the process was transparent and open and run by both the BPE and the ministry of power, the BPE couldn’t technically sign off on the deal. The FG through the FEC had to approve.
Now the FG could have just approved the contract organized by the BPE. Problem solved. That however is not what has happened. The FG has scrapped the contract completely and has given the ministry of power, who by the way had its minister changed a month ago, 30 days to “select” a new winning bidder. Yeah, due process.
Bottom line is the opportunity to make real progress in reforming the electricity sector has been lost. It doesn’t matter who they select now. We all know that whoever is “selected” as the new winning bidder will have the contract revoked once the next administration comes into power in 2 years.
In the interim, private investors will probably stay on the sidelines. If they can’t trust the government to reform the sector then they probably won’t put their money on the table. Time to service those generators people. We are still going to need them.
UPDATE: looks like GEJ has changed his mind. In the press event yesterday he denied the Manitoba deal had been cancelled. A reversal of the reversal. Hopefully there isn’t a reversal of the reversal of the reversal coming next.