The federal government has agreed to pay $200 million to Sunrise Power
and Transmission Company Limited (SPTCL) as final settlement of the
dispute over the Mambilla power project in Taraba state, TheCable can
report.
The government also agreed to pay a penalty of 10 per
cent in case of a default in fulfilling the settlement agreement — in
addition to restoring Sunrise as the local content partner for the $5.8
billion hydro electric project.
The new settlement deal was put
together by Sale Mamman, minster of power, and Abubakar Malami, the
attorney-general of the federation.
Sources told TheCable that
Sunrise Power had previously asked for an $80 million settlement in
order to withdraw its arbitration claim against Nigeria in France over
an alleged breach of contract.
But Babatunde Fashola, who was
minister of power, had contended that there was no breach of contract as
Sunrise had not done any work to warrant any demand or arbitration.
Fashola also questioned the integrity of the contract.
However,
with his exit from the ministry, TheCable learnt, a deal was put
together by Mamman and Malami and facilitated by a female figure in the
presidency.
The project, the biggest plant in the country, was conceived in the 1970s but has suffered severe delays.
The 3,050-megawatt facility will be the second largest hydropower plant in Africa when completed.
In
2017, Sunrise Power, who claimed to have been awarded the build,
operate and transfer (BOT) contract in 2003, had dragged the federal
government and its Chinese partners before the International Chamber of
Commerce (ICC) in Paris, France, over alleged breach of contract.
DETAILS OF THE $200M SETTLEMENT
In
documents seen by TheCable, Malami and Mamman, the minister of power,
signed on behalf of the federal government while Leno Adesanya signed as
chairman and CEO of Sunrise.
“Under the above request for
arbitration, Sunrise Power and Transmission Company Limited claimed
damages amounting to not less than US$960,000,000 as a consequence of a
respondents breach of the GPEA,” the document read.
“Desirous of
removing all legal impediments to the execution of the Mambilla
Hydro-Electric power project, the Federal Republic of Nigeria and
Sunrise Power and Transmission Company Limited have mutually agreed to
settle the dispute in this arbitration amicably.
“The Federal
Republic of Nigeria shall, within a period of 14-days from the date of
this Terms of Settlement, pay Sunrise Power and Transmission Company
Limited the net (net of any deductions, charges or taxes howsoever
called) sum of US$200,000,000.00 (two hundred million US dollars)in full
and final settlement of the claims in this arbitration.
“Should
the Federal Republic of Nigeria fail to make such payment within the
said 14-days period, the sum will immediately bear compounded interests
at the yearly rates of 10% (ten percent), and in addition, the FRN shall
automatically reinstate Sunrise Power and Transmission Company Limited
as the executive local content partner to the Mambilla Hydropower
project.
“Sunrise Power and Transmission Company Limited shall
take immediate steps to provide a Deed of Acceptance of the above sum
and a Deed of Undertaking stating that upon, and only upon, the receipt
by Sunrise Power and Transmission Limited of the net sum of
US$200,000,000.00 (two hundred million United States dollars) in full
and in immediately-available funds on its designated bank account,
Sunrise Power and Transmission Limited shall withdraw all of its claims
against the Federal Republic of Nigeria and Sinohydro and more generally
all and any claims of each Party to the arbitration against each other
Party thereto shall stand irrevocably released, discharged and
terminated. Each Party shall thereupon formally withdraw and drop any
and all of its claims against every other Party to the arbitration.”
SUNRISE WITHDRAWS SUIT FROM ICC?
Speaking
at a sensitisation meeting on the project in February, Farouk Yabo,
chairman of the project delivery committee, said the local company had
withdrawn the suit from ICC.
“The person that took the federal
government to the International Court of Arbitration has already
withdrawn the case last week,” he said.
TheCable had reported how
SPTCL accused some “vested interests” in government who, in 2017,
signed another contract with 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.
According to Adesanya, several letters
were written to inform the presidency of the breach, yet Sunrise “was
sidelined” in the project by the ministry of power.
Adesanya said
between 2003 and 2009, SPTCL had spent millions of dollars with
financial and legal consultants to raise about $6 billion for the
execution of the project, yet the company has suffered a lot over the
years “through improper administrative interruptions and interventions”.
GOING BACK AND FORTH
Adesanya,
in a letter dated March 31, 2017 to Fashola, then minister of power,
had accused the minister of reneging on his promise to support the
project.
Fashola had maintained that available evidence did not
support Adesanya’s claims, adding that he was making a desperate attempt
to destabilise the project from coming to fruition.
In another
letter dated June 20, 2017 to the then Acting President Yemi Osinbajo
requesting his intervention in the matter, Adesanya accused Abba Kyari,
chief of staff to President Muhammadu Buhari, of taking the unilateral
decision of directing the ministry of power to sideline the company from
the contract “against the advice of Malami”.
In the letter dated
July 24, 2017 to Osinbajo, with a copy to the chief of staff, Malami
had said SPTCL should be engaged as a local content partner to the
project “as a means of accommodating its prior contractual interests on
the project”.
However, Malami backtracked a few weeks later.
In
another letter dated August 17, 2017 to the company, the AGF said he
issued the previous opinion on the project based on the limited
materials provided at the time.
He added that there was no requisite federal executive council (FEC) approval for the project.
“The
logical conclusion in the circumstances should be that there was no
valid contract between Federal Government of Nigeria and SPTC in respect
of the project or at all,” Malami wrote.
CHINA INSISTED ON RESOLUTION
The
China Exim Bank, which is expected to provide 85 percent of the joint
funding with the federal government for the Mambilla project, had
insisted on compliance with due process and terms of the November 2017
engineering, procurement and construction (EPC) contract signed with the
partners before releasing funds.
The Chinese ambassador to Nigeria said his country will not support white elephant projects.
“On
5th September, 2019, Yang Jiechi, Special Representative of President
Xi Jinping informed the Nigerian President and Commander in Chief,
President Muhammadu Buhari that unless the legal dispute is resolved,
conforming out of court settlement funding for the loan will not be
accessed,” He Yongjun, project manager for the Chinese partners, said,
“A
meeting shall be organized by the Ministry of Power for negotiation
between the relevant authorities of the Nigeria government, SUNRISE, and
the members of the EPC Contractor JV to resolve the legal disputes
through amicable negotiations so as to let the plaintiff withdraw the
lawsuit.”
During a sensitisation meeting in February, the minister of power said that the power project is a reality.
“With
this meeting and the joint sensitization trip involving the Fed Min of
Power, the Taraba State Government, Mambilla Surveying team and other
key stakeholders set to visit the site next week, I can assure Nigerians
that the Project is a reality,” Mamman said.
0 Comments