HOW COMPANIES OWNED BY DANGOTE AND STANLEY JEGEDE ALLEGEDLY REFUSED TO REMIT N27B OUTSTANDING FEE AFTER FIBER NETWORK CONCESSION AGREEMENT WITH TCN

Secret Reporters

With the incessant lack of stable and sustainable power supply, improved infrastructure and dwindling operational performance in the Nigerian power sector, a memo obtained by this online news medium shows that various scandalous actions carried out by Companies such as Alheri Engineering company and Phase 3 Telecommunications through unpaid debts from award of contracts has proven to be one of the major reasons behind the decline in the productivity of the Transmission Company of Nigeria (TCN). 

The Transmission Company of Nigeria (TCN), which emerged from the defunct National Electric Power Authority (NEPA) following the unbundling of Power Holding Company of Nigeria (PHCN) with the 2005 Electric Power Sector Reform Act and operated a national grid that consists of eight thousand, three hundred and thirty-three Kilometers (8,336Km) of three hundred and thirty Kilovolts (330Kv) transmission lines and eighth hundred and seventy-one Kilometers (8,071Km) of one hundred and thirty-two Kilovolts (132KV) transmission lines in addition to 330/132/33KV substations, conveys electricity from power stations where electricity is produced to distribution companies which is subsequently distributed to households, businesses, and industries across the country. These transmission routes are built with Fiber Optic lines that transmits telecommunications signal nationwide.

Sensing the brewing financial crisis facing the Government-owned Transmission firm, in 2006, the TCN went into two separate concession deals with two companies; Phase 3 Telecommunications Limited and Alheri Engineering Company Limited owned by Stanley Jegede and Aliko Dangote of Dangote Group respectively. 

The concession agreement we learned provided for the duo to take over the building, operation, and enhancement of one part of the TCN’s transmission lines which is the fiber-optic network, and to also use them as Telecommunications services providers for third parties over a period of 15 years.

The concessionaires in the same vein were to remit an agreed fee of $40Million (N14.4B) each as service charge for using TCN’s asset and a payment of 2.5% royalty of gross revenue as shelter fees by both companies in which no payment was made for about 11years.

According to the memo, obtained by SecretReporters with Ref. No. FMP/OPS/06/1 addressed to President Muhammadu Buhari by the former Minister of Works, Power and Housing Babatunde Raji Fashola, since 2006 $2Million and $3.5Millon which is only about 13.75% out of the agreed concession fee has been paid so far by Phase 3 telecom and Alheri company respectively with regards to the deal.

Regrettably, irrespective of the huge revenue generated as service charges from customers which include all mobile network operators in Nigeria who rely on TCN’s fiber optic network to deliver services to about 139 million subscribers nationwide, about $36.5Million (N 13,249,500,000) and $38 Million (N13,794,000,000) was still owed by the duo amounting to a mind-boggling sum of Twenty seven billion, forty-three million, five hundred thousand Naira (N27,043,500,000) as the Concessionaires has failed to carry out the maintenance of the assets alongside build, operate and transfer most enhancements as required in the concession agreement.

The motive behind the commercialization of TCN’S fiber network which was geared towards transforming the current poor financial position of the commission by adding an income stream and supplementing the commission’s sources of capital from the Federal Government allocation was however unattainable due to the action of the two companies.

Following the termination of the contract by the TCN management which was in line with Article 25.1.1 (g) of the concession agreement, the concessionaires in the bid to frustrate the commission legitimate right to recover its assets and debts, instituted a court action against the Transmission Company of Nigeria and the Ministry of Power, Works and Housing Challenging the termination which made all efforts made by the TCN management to recover the outstanding debts by seeking the intervention of the Infrastructure Concession Regulatory Commission (ICRC) and Nigerian Communication Commission (NCC) on the matter abortive. 

In addition to their fraudulent crimes, the Concessionaires further breached several other agreements by claiming direct ownership to the Fiber Optic Network, which enabled them to enter into Indefeasible Right of Use (IRU) with some Mobile Network Operators without the consent and knowledge of TCN which according to TCN Management was seen as an illegal transfer of government property.

The memo also revealed that the concessionaires took power illegally from key essential services in the various substations owned by TCN without payment and non-adherence to the use of 50% of the network as clearly stipulated in the agreement, instead they used up more than 80% leading to huge revenue losses over the period. This sources disclosed, has significantly constrained TCN from optimizing SCADA/EMS/Telecommunication which is critical in the control and monitoring of transmission network. 

It should be noted that Transmission Commission Operators from other countries such as India, Brazil, and South Africa are reported to derive huge revenue from commercialization of their Fiber optic Network, which in some cases are bigger than the revenue from the transmission.

When contacted for his reaction, the Group Head, Corporate Communications at DangoteGroup Mr Anthony Chiejina declined comment stating that the case was still pending in court. Also, calls placed to the know mobile line of the former minister of power were unsuccessful and he did not reply to the message sent to him as at press time.

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