Dangote’s Alheri tackles Fashola on claims it owes Nigerian Govt N27.2bn over fibre optic agreement

Management of Alheri Engineering Company Limited, a subsidiary of the Dangote Group, has denied owing the Federal Government the sum of $75,500,000.00 million (about N27.18billion) over fibre optic agreement.

Reports had claimed that the Minister of Power, Works and Housing, Babatunde Fashola had written to President Muhammadu Buhari informing him that Alheri and another indigenous company, Phase 3 Telecom Limited, have gone back on a concession agreement.

Fashola’s letter with Ref No FMP/OPS/ 06/1 and dated November 31, 2017 to President Buhari was entitled, Re: Concessioning of Transmission Company of Nigeria (TCN).

It read in part: “I write to respectfully draw your Excellency’s attention to ongoing efforts by the management of the Transmission Company of Nigeria (TCN) to enforce its termination of two failed Fiber Network concession Agreements, recover its outstanding concession fees in the sum of USD 75,500,000.00million from the two concessionaires, and take position of and commercialize its critical fiber optic infrastructure, which are essential for the stability and optimization of the national grid”.

It was gathered that the two firms involved in the deal may have generated over N500billion and allegedly diverted the funds through the failed concession agreement.

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Fashola said that “All efforts by TCN management to ensure the Concessionaires pay their outstanding debts failed, notwithstanding the significant revenue they collect from the customers they service using TCN assets”, and that “Their customers include all the Mobile Network Operators in Nigeria, who rely on TCN’s fiber optic network, through the Concessionaires, to deliver services to their 139 million subscriber lines nationwide, effective commercialization of TCN’s fiber network would transform TCN’s current poor financial position by adding an income stream that does not depend on the current poor payment performance of the distribution companies. Such revenue could have been used to supplement TCN’s current unsustainable sources of capital from FGN budget and multilateral lenders to more effectively finance its operations, grid rehabilitation and expansion”.

But Alheri in a statement on Monday, described the accusation as “…not only untrue but a distortion of facts and events twisted to achieve a predetermined goal. The story is as bizarre as it is deceptive, calculated only to sensationalize and to smear the good corporate reputation and image of Alheri”

The company stated that after a very extensive and competitive bid selection process, it was shortlisted with Phase3 as preferred bidders for the award of the concession for the fiber optic deployment project under a Public Private Partnership (PPP) arrangement

“The Concession Agreement required the Concessionaires to take over the operations of TCN’s fiber optic network, Design, Build, Finance and Operate (DBFO) the infrastructure with unhindered access to existing and future fiber optic infrastructure on the network. For the purpose of execution of the Project, the entire country was divided into two. The Easter half of the country awarded to Alheri and the Western half to Phase3. It is worth to note that the Concession area granted to Alheri covers less economic viable cities.” It stated.

Alheri noted that despite the deployment challenges as evidenced by TCN’s refusal to meet its obligations under the agreement for example by providing lines upon which Alheri is to build upon, it has expended huge capital outlay to carry out extensive expansion and upgrades on TCN’s telecommunications infrastructure but could not deploy fiber to the North which constitutes a significant market as “there is no line between Makurdi and Jos, which constitutes the bridge between the South and North.

Claiming that a request by Alheri for timelines within which TCN intends to provide the requisite lines between Makurdi and Jos since 2011 has not been provided by TCN till date, the company stated that despite Alheri’s serious challenges, and inheriting next to nothing on the infrastructure concessioned to it, it was still able to deploy a total of 1000km and installed state-of-art transmission equipment along these lines.

“Alheri inherited no lines from TCN. The concessioners have therefore thus far expended more than $100m as capital and operating expenditure on the project”, it affirmed.

Alheri’s management expressed surprise at the publication of TCN online and in some Newspapers as Infrastructure Concession Regulatory Commission (ICRC) has already intervened to resolve the impasse, being the moderator in the resolution process and posited that the “unfounded allegation is an attempt by TCN to resist the restructuring of the concession fee due to the changes in the regulatory and market environment as suggested and recommended by SIAO the Auditors appointed to audit the Concession Agreement with specific terms of reference which included financial audit, technical audit, audit observation and recommendation, with the understanding that Parties will be guided by the outcome of the Auditors’ report.

“The audit confirmed that prices on capacities for sale of transmission services on fiber per km dropped by about 89 per cent by 2015. The report submitted by SIAO confirmed the need for a review of the Concession Agreement, especially the Right of Way (RoW) charges for the deployment of fibre optics on power lines to be at par with other RoW charges available in the telecom industry.”

Noting that Alheri has always honoured the terms of the Concession Agreement with TCN in line with kilometer of fiber available as well as market realities, the company stated that it has never been and would never be part of any diversion or misappropriation of funds accruable to TCN as claimed in the news media.

Similarly, Phase3 Telecom Limited in a statement by its director, Legal & Regulatory Services, Azeez Adebayo denied owing the Federal Government of Nigeria the sum of$75,500,000.00 Million (about N27.18 Billion) over a concession agreement with TCN.
It said what was published “is a clear distortion of facts”.

The company explained, that “the issue at hand, which is bringing up all these unfounded allegations, is the attempt by TCN to resist the harmonization of right of way charges for deployment of fiber optic cables as agreed and communicated by the National Economic Council towards affordable broadband services in the country.

“This will, quite naturally, necessitate a review of the Right of Way (Row) charges for deployment of fiber optics on power lines (concession fees) to be at par with other RoW charges available in the telecom industry.

“Fortunately, the contract review process towards ensuring the success of this project for the overall benefit of the country is currently under the supervision of the Infrastructure Concession Regulatory Commission (ICRC), the regulatory agency saddled with this responsibility. And when that process is completed, we believe that we shall be vindicated”, it said.

 

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