Breaking the Stalemate over Mambilla Power Project

Breaking the Stalemate over Mambilla Power Project

It is ironic that in a country like Nigeria where businesses close shops almost daily, while others relocate as a result of poor power generation and distribution, the successive administrations have allowed the ongoing crisis over the Mambilla Power Project to fester.  It is time for President Bola Tinubu to wade into the crisis and give the project a new lease of life, writes Festus Akanbi

As controversy continues to trail the Mambilla Power Project, President Bola Tinubu has been advised to, as a matter of urgency, put in place measures to ensure amicable resolutions of all the issues stalling the all-important project, especially considering the current state of power generation in the country.

Experts who weighed in on the legal tussle over the project said a quick resolution of all the outstanding issues on the project will not only raise the hope of a possible relief in a sector that has been consistently fingered for the setback in the economy but will also boost the confidence of foreign investors.

The Mambilla power station which is located in Kakara village, in Taraba State, close to the border with Cameroon, sits across the Donga River and consists of four dams and two underground powerhouses.  

Construction of this power station is expected to generate 50,000 temporary and permanent jobs. The power generated will be sold to the Transmission Company of Nigeria, which will transmit it to two locations, where it will be integrated into the Nigerian electricity grid; one 330kV high voltage transmission line will connect to Jalingo and two to Makurdi. The entire new planned high-voltage transmission system measures over 700 kilometres (435 mi).

Criminalising Commercial Dispute

However, analysts expressed shock that instead of working towards the actualisation of this project, and the realisation of the advantages enumerated above, the federal government is currently locking horns with the promoter of Sunrise Power and Transmission Ltd, Leno Adesanya, in arbitration at the International Chamber of Commerce, Paris, France with the latter alleging a breach of contract.

They also lamented a situation where a commercial dispute is being criminalised as the Economic and Financial Crimes Commission (EFCC) is allegedly unleashed on the company and its staff. This development, according to watchers of the unfolding drama, could make nonsense of the current drive for foreign investment by the current administration.

The consensus among watchers of the unfolding developments is that the criminalisation of commercial disputes by law enforcement agencies will affect businesses and frighten investors.

Adesanya said the federal government decided to criminalise the power deal because there was no justification or defence for the unilateral cancellation of the deal.

Sunrise Power and Transmission Company Limited claimed it was awarded a $6 billion build, operate and transfer (BOT) contract in May 2003 by the Obasanjo administration but stated that the federal government at the time, rejected the agreement.

He disclosed that in August 2005, the company’s Chinese Consortium informed former President Obasanjo about China EximBank’s $5.5 million loan approval, and that the President instructed the FMOP to commence immediate negotiations with the consortium.

He alleged the federal government’s disregard for the agreement when, on May 28, 2007, the federal ministry of power signed a $1.46 billion EPC contract for the first phase of the Civil Works project with China Ghezouba Group Company (CGGC) and CGC (now called CGCOC), excluding Sunrise Power from the deal.

Sunrise is now seeking compensation of $2.3billion, claiming it had spent millions of dollars on financial and legal consultants before the contract was jettisoned.

In its defence at the arbitration hearing, the Nigerian government is alleging fraud and corruption of public officials in the award of the contract.

Sunrise is asking for a compensation of $2.3 billion, claiming it had spent millions of dollars on financial and legal consultants before the contract was jettisoned.

 Calls for Amicable Settlement

Some Nigerians while lamenting that the dispute had stagnated the commencement of the project, enjoined President Tinubu to break the jinx over the Mambilla project given the public anger against the current power generation in the country.

Today, the severity of poor power outages on Nigeria’s economy is such that companies and small and medium-scale businesses that could not afford an alternative source of power supply are being forced to close down. This has resulted in the intractable high rate of unemployment that now prevails in all parts of the country.

Writing on behalf of his client, a former President of the Nigerian Bar Association (NBA), Chief Wole Olanipekun (SAN); renowned lawyer, Chief Afe Babalola (SAN) and human rights lawyers, Mr. Femi Falana (SAN) recently asked the federal government to seek an amicable settlement and revive the execution of the $5.8 billion Mambilla hydro-electric power project by Sunrise Power Transmission Company of Nigeria Limited (SPTCL).

Even the indigenes, having seen and observed the benefits of the project to their communities, have called on the federal government to resolve the dispute amicably for the common good.

For instance, in Olanipekun’s  letter titled: ‘Re: the ongoing arbitration between Sunrise Power and Transmission Company Limited and the Federal Government of Nigeria arising from the Mambilla Hydro-electric Power Project,’ he stated that it was not fair that the dispute had stagnated the commencement and execution of the Mambilla project for many years.

The letter dated December 7, 2023, urged the federal government to seek an amicable settlement of the matter and negotiate with the firm to resolve the protracted litigation and potential national embarrassment.

The letter read: “Given the foregoing facts and circumstances, which have stagnated the commencement and execution of the Mambilla project for many years, we have been authorised by our client to seek an amicable settlement with the FGN to revive the execution of the Mambilla hydropower project.

Observers feared that Nigeria might be having a replay of the scenario of happened to Prof. Barth Nnaji’s Geometric Power project which was stalled for over a decade due to controversies before it was eventually inaugurated last week.

 Calling EFCC to Order

The latest attempt to bring a lasting solution to the crisis was a letter of appeal to President Tinubu by Adesanya where he requested an urgent intervention to restrain EFCC’s alleged harassment and intimidation and appealed to the president to caution the anti-graft agency to follow the rule of law.

According to him, the EFCC has taken unlawful actions to deny him the right to contest their allegations at the arbitration, while noting that Sunrise Power and Transmission Company Ltd (Sunrise) is currently engaged in international arbitration proceedings against the Federal Government of Nigeria (FGN) in Paris over the issue.

The international arbitration, he explained, concerns the contractual entitlements of Sunrise under a Settlement Agreement that was signed by Sunrise and FGN in 2020.

The letter read in parts: “On 3 November 2023, FGN filed its Statement of Defence in the Arbitration, in which FGN makes serious allegations of corruption (and other criminal acts) against me and various former FGN officials. I deny these allegations unconditionally and intend to contest them in the Arbitration. However, my ability to do so is being impaired by the escalating actions of the Economic and Financial Crimes Commission (EFCC) in Nigeria.

“It is self-evident that these aggressive and unlawful EFCC actions are being taken to advance FGN’s defence in the Arbitration. The fact that the EFCC action is for the illegitimate purpose of aiding FGN’s defence in the Arbitration is confirmed by the fact that, despite my repeated calls for the Arbitration to be conducted on a public basis, FGN has insisted that the Arbitration be private and confidential.

Adesanya revealed that he had sought public conduct of the arbitration process which the federal government declined.

He said: “While I have long publicly advocated for tough measures against corruption, and I respect the powers of government in this important area, the rule of law must be respected. It is an abuse of police powers to use an anti-corruption agency such as the EFCC to manufacture a defence to a commercial claim, and that is precisely what is occurring in the Arbitration.

“I humbly request that you intervene to cause the EFCC to adhere to the rule of law and refrain from further unlawful acts against me and my family. I have repeatedly informed the EFCC that I am willing to meet with their agents in London to state the matters under investigation, and I remain willing to do so despite what has occurred. I relocated out of Nigeria six years ago after an attempt on my life.”

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