Transmission firms terminates US$40m fibre optic contract

Transmission Company of Nigeria (TCN )has terminated the US$40 million “Fibre Optic“ power line concession agreement with Phase 3 telecoms limited because the firm defaulted in the agreement.
Optical fibers are used most often as a means to transmit light between the two ends of the fiber and find wide usage in fiber optic communications where they permit transmission over longer distances and at higher bandwidths than electrical cables.
Fibers are used instead of  metal wires because signals travel along them with less loss.
The Federal Government via TCN in March 2006 entered into a 15-year concession agreement with the company to operate the fibre optics network infrastructure of the federal government for telecommunications services.
A report by TCN to Attorney General of Federation, Abubakar Malami on developments over the contract,  said there was an agreement that Phase 3 telecoms should pay a concession fee of 40 million dollars to the government.
The document obtained by News Agency of Nigeria (NAN) Correspondent said the payment was for right of access and use of the fibre optics network infrastructure for 15 years.
According to the document, Phase 3 was to also pay a royalty of 2.5 per cent of gross revenue from its operations to TCN among other charges for using the fibre optics power line for telecommunications services.
TCN, however, said Phase 3 had operated in breach of the clause 13.2(a) and (b) of the concession agreement and defaulted and has continued to default in its obligation to TCN.
It said Phase 3 has only paid 3.5million dollars out of the 40 million dollars concession fee in the over 12 year duration of  the concession agreement  despite  TCN’s  several  demands  for payment from the firm.
According to the document, TCN also discovered that Phase 3 did not only sub-concession the fibre optic network infrastructure, it had also contracted the network to third parties in breach of the contract.
“When it became clear that Phase 3 had no intention to comply with the terms of concession agreement, TCN decided to terminate the concession agreement with Phase 3.
“TCN further took over the fibre optic network infrastructure to monitor the National Power Grid which was the original purpose of building the network. “
TCN in the document said the inexplicable system collapse in the national grid in March was caused by the unauthorised tempering on its 330KVA transmission networks between Olorunshogo and Ikeja –West by Phase 3 telecom.
It said Phase 3, dissatisfied with by the termination of the agreement sought and got an injunction on its favour from the Federal High Court.
It, however, said TCN also approached the Court of Appeal and secured an injunction on stay of execution on the initial injunction by the high court.
It said despite the order on stay of execution, by the superior court, Phase 3 telecoms had continue to gain access to the fibre optic infrastructure network in its substations.
It said Phase 3, in company of some security agents forcefully gained access to   the fibre optic infrastructure at its substation stations in Katampe, in Federal Capital Territory (FCT).
Other substations are Keffi and Suleja in Nasarrawa and Niger states on Oct 8.
It called for the intervention of the Attorney General of the Federation to forestall the affront on the jurisdiction of the court of Appeal by Phase 3.
“Our clients respectively demand that the personnel of phase 3 be removed from all TCN’s offices, installations  and power stations across the country forthwith, pending the hearing and determination of their pending application for stay of execution at the court Appeal.“
On the accusation that Phase 3 staff forcefully invaded TCN substations despite the injunction on stay of execution, Head, Corporate Communications of Phase 3, Morayo  Nwabufo told NAN correspondent that  she will  not be able to  comment on the matter.
“For that questions I will not be able to answer you, because the matter is still with the honorable court, we have to honour that.
“Now, there is a temporarily injunction that has been issued by the court to say that access can be granted and TCN is not honouring that.
“But in terms of the operational aspect of it I am not going to be able to comment, because I do think that at this point we should honour the court.
“We have to honour the court, and two parties are involved in it and you have to also consider the regulatory tendencies so I will not be able to give you comment on the operational issues.
“ I will rather wait that we get the final injunction, but in terms of the limited access we received, that is in place and TCN is also honouring that, but I know that in the coming days things will be clearer.“
According to her, the power utility belongs to the Federal Government and been run by TCN.
“Now, we also need to clarify the fiber optic belongs to Phase 3, telecom, what we are doing is that  we are running it on power line.
“The fibre optic cables belongs to Phase 3 telecoms but it runs on TCN power line which is a federal government utility.
“ And that is the tenets of the Private Public Arrangement (PPA) with TCN and Phase 3 telecoms.
“The 15 year agreement is to say that we can run our fibre optic on the power line, but the fibre optic  does not belong to TCN and we have also brought a lot of investment into the fibre optic.“