Cover Story

Explainer: Bwacha Cannot Be On Ballot Despite Yola Appeal Court Victory

By P. D Pius esq. There are two judgments of the Federal High Court nullifying the election of Bwacha as APC candidate. There is the judgmen...

Residents Losing Hope on Mambilla Hydropower Project


• Power firm's fresh $400m demand delays Project take-off 

 

The once excited residents of Mambilla Plateau are beginning  to lose hope on the planned take off, of Nigeria's multibillion naira Mambilla Hydro Project located in its Sardauna Local Government  area of the state .

 

The planned take-off of the 13,000MW Mambilla Hydropower Project, located in Taraba State again ran  into troubled waters with another legal hurdle being mounted by Sunrise Power and Transmission Company (Limited (SPTCL), which is claiming a breach of contract by the federal government.

 

It was gathered that the Nigerian company which lost out on a contract to build the multi-billion-dollar plant has filed a $400 million arbitration claim against the government, further hampering the country's plans to access Chinese financing for the project.

However local residents on the Mambilla are worried that despite the commitment of the APC lead government to commencing the project, no significant impact has been made.

 

  "Our hopes on the project was raised by the determination of President Muhammadu Buhari to commence the project after many years but now the tenure is drawing to an end and there's nothing on ground  to show  about the project, all the promises of payment of compensation, for survey has not being implemented and our people are not happy with the latest update about the stallment of the project.

"The Mambilla Hydro Project means everything to people on the Mambilla, it means jobs, new life and many more for us on the Plateau," a community leader who does not want to be mention told Taraba Truth and Facts Newspaper.    

 

Taraba State Governor,  Arch. Darius Ishaku  has earlier urged the people of the state to pray fervently for the actualisation of the multipurpose Mambila hydro power project.

 

Governor Ishaku who was one time Minister for State of Power  said the power project was not only the hope for stability in electricity power generation in Nigeria but also a source of hope for the economic transformation of Taraba State.

 

Noting that the Mambilla Plateau needs serious prayers for its timely actualization, he said, "If Mambilla power project is executed, Taraba and the Mambilla will never be the same again.

 

"The social and economic lives of the people will be transformed if the project is executed. Do not forget to pray for the actualisation of the project."

 

 

Fresh Hurdles Delaying Project Kickoff

 

Takeoff of the project  hit the rocks after a Nigerian company that lost out in the contract bid filed a $400 million lawsuit against the Federal Government.

 

The lawsuit filed by Nigerian-owned Sunrise Power and Transmission Company Limited (SPTCL) at the International Chamber of Commerce (ICC) in Paris, France, requested the court to order President Muhammadu Buhari's administration to honour its March 2020 agreement.

 

The company's request for an award of $400 million with an interest of 10 per cent was initiated under the ICC's expedited procedure rules, as specified in the agreements, and should be decided within six months.

 

The SPTCL claimed it  was awarded the contract to build and operate the 3,050-megawatt hydropower facility in 2003, which was followed by the signing of a General Project Execution Agreement (GPEA) with the government in November 2012.

 

The project was scaled to a 1,525-megawatt hydropower facility at $4 billion, but SPTCL was sidelined in the project by the Ministry of Power, Works and Housing.

 

Former Minister of Power Babatunde Fashola had granted the same contract in 2017 to three Chinese companies, Sinohhydro Corporation of China, China Ghezouba Group Corporation of China and China Geo-Engineering Group Corporation, to form a joint venture for the execution of the project.

 

The China Exim Bank was expected to provide 85 per cent of the joint funding with the Federal Government for the Mambilla project, but the bank insisted it  would not release the money until the legal standoff ended.

 

This prompted SPTCL to start court proceedings against Nigeria's government at the ICC, demanding between $960 million and $2.4 billion in damages.

 

 

A settlement agreement was reached with SPTCL last year where $200 million was promised, in return for it dropping all claims relating to Mambilla.

 

It was also agreed that the Lagos-based firm would be entitled to an additional $200 million-plus interest if the government failed to transfer the agreed sum within 180 days.

 

President Buhari decided that his administration couldn't pay the settlement sum, according to a memorandum in August 2020, because low oil prices were hitting the economy due to the outset of the coronavirus.

 

Export-Import Bank of China had agreed to help fund Mambilla, but has insisted that it won't release the money until the legal standoff ends.

 

 

Former Power Minister, Babatunde Fashola (SAN) had announced in 2017, that China Eximbank would finance 85 per cent of the cost of Mambilla, and that it would be built by Sinohydro Corp., China Gezhouba Group Co. and China Geo-Engineering Corp.

 

But a memo written by the Chinese contractors to the Minister of Power Engr Sale Mamman in September 2019 stated that Eximbank couldn't enter "substantive financing negotiations" while the development is encumbered by legal disputes.

 

China's top diplomat and a ruling Politburo member, Yang Jiechi, then notified Buhari the same month that the funding can't be disbursed until the tussle with Sunrise ends, according to the memorandum.

 

 

The power ministry first granted Sunrise the contract to build Mambilla in 2003, a deal the Federal Executive Council (FEC) declined to approve. The company has asserted a claim to the project ever since, first in a Nigerian federal court and more recently through international arbitration.

 

After Fashola finalised the arrangement with the three Chinese firms, Sunrise started proceedings against the federal government at the ICC, demanding between $960 million and $2.4 billion in damages.

 

It, however, suspended the case to participate in the settlement talks encouraged by Jiechi.

 

 

Last year, Mamman and the Attorney General of the Federation (AGF), Abubakar Malami, concluded two agreements with Sunrise that committed the government to pay $200 million to the Lagos-registered company in return for it dropping all claims relating to Mambilla.

 

The agreement indicated that the company would be entitled to an additional $200 million plus interest if the government failed to transfer the agreed sum within 180 days, according to the second accord signed in March, which was seen by Bloomberg.

 

 

But the federal government has said that it cannot pay the settlement sum, according to a memo Malami sent the president in August last year, at a time when low oil prices were hammering government income.

 

Sunrise hasn't received any money "despite numerous commitments from the involved ministers and a surge in oil prices,"Bloomberg quoted Falana as saying.

 

The company's request for an award of $400 million plus interest of 10 per cent has been initiated under the ICC's expedited procedure rules, as specified in the agreements, and should be adjudicated within six months, he said.

 

 

Malami's memo to the president stated that Sunrise is "in a strong legal position to pursue a successful claim" having not been "duly disengaged as contractor."

 

Further delays caused by the dispute could also have "major negative political implications" because Mambilla is a "signature project" for the president's administration, Malami was quoted as saying in the letter.

 

Mamman recently stated that activities such as land acquisition and public awareness raising were underway at the project site location.

 

 

Speaking through his Special Adviser on Media and Communications, Mr. Aaron Artimas, on the latest move by the company, the minister noted that the fresh arbitration was not necessary, stressing that everything was being done to resolve the issues.

 

"There is no reason for an additional arbitration or court case. The government is working to find an amicable solution with Sunrise. The government is on course and remains committed to the project," the minister said.

 

However, before the latest alleged breach of agreement, then power minister, Mr Babatunde Fashola, had contended that there was no breach of contract as Sunrise had not done any work to warrant any demand or arbitration, further questioning the integrity of the contract.

 

Initially, the project was conceived in 1982 as a 3,050-megawatt plant on the Donga River, Taraba State to cost $5.8 billion, but it got off to multiple false starts. When completed, the Mambilla project will increase the installed electricity-generating capacity of the country by 12 per cent.

Plans to develop the plant on the Donga River in the eastern Taraba state dates back to the early 1970s, but the project has got off to multiple false starts.

 

With additional agency reports

 

No comments