EFFECT OF PROJECT COST CONTROL ON NIGERIA’S POWER SECTOR. THE CASE OF TRANSMISSION COMPANY OF NIGERIA, ABUJA (2008-2021)

Abstract

: This study looked at the effect of project cost control on Nigeria’s power sector using the case of Transmission Company of Nigeria (TCN). The motivation for the study was drawn from the persistent low levels of power transmission by the company which has triggered enquiries into what could be the possible causes of this problem. The objective was to find out how cost control measures relate with capacity to wheel power to the distribution companies and the profitability of the company. Method of study was the application of the multiple regression using the Ordinary Least Squares (OLS) estimation method to regress budget values and profitability o quantity of power wheeled by the TCN. Findings revealed that both Budget Value and Profitability, as explanatory variables, maintain significant positive relationship with the quantity of power wheeled by the firm to the tune of BV (0.362) with a probability of 0.0377 and Prof (0.437) with a probability of 0.0438 respectively. The study also found that even though the variables of the study are normally affected by seasonality’s and other environmental factors rendering them prone to random effects, they maintain an impressive 52% speed in returning (adjusting back) to their steady state or equilibrium state.  The overall explanatory power of the model peaked at 64%. This led to the conclusion that cost control measures which was proxied using budgeted cost figures, otherwise referred to as (BV) in this study have significant positive impact on quantity of power transmitted by the TCN. The study recommended strict adherence to budget figures ad evolution of policies consistent with persistent improvements in budget prudent management