FG Explains Revocation of Sunrise’s $2.3bn Mambilla Contract

Minister of Power, Mr Sale Mamman , has stated that the federal government revoked the $2.3 billion Mambilla hydropower project contract with Sunrise Power Transmission and Procurement Company Limited (SPTPCL) because the government found out that the company was ‘fronting’ for a foreign business organisation. The cancellation of the deal has been a subject of controversy as the firm has recently dragged the government to an international arbitration court claiming several millions of dollars for breach of contract, thereby stalling the project which is over 40 years in the works. In June, the company filed a fresh $400 million lawsuit at the International Court of Arbitration (ICA), which operates under the auspices of the International Chamber of Commerce (ICC), in Paris, France, against the federal government. Sunrise Power had earlier on October 10, 2017, dragged Nigeria to arbitration at the court seeking a $2.354 billion award in relation to the deal before both parties agreed on an out-of-court agreement on the 3,050MW plant in Mambilla, Taraba state, on a “build, operate and transfer” basis. In a piece he titled “Power Sector and its Desperate Critics”, Special Adviser, Media and Communication to the minister, Aaron Artimas, the minister also defended his qualification for the position he currently occupies, noting that people like one of his predecessors, Prof. Barth Nnaji would have transformed the ministry if performance was based on paper qualifications. In the lengthy treatise which he made available in Abuja, he stated that he inherited a very chaotic ministry when he took over the ministry, but had to “whip the agencies into line” because each of them was claiming autonomy. Mamman succeeded Mr Babatunde Fashola, who is now Minister, Works and Housing.

“As background information, the Mambilla Power project was previously awarded to a local contractor, Sunrise Power Transmission and Procurement Company in 2003 at a cost of $2.3 billion. But as it turned out, the company was merely fronting for a foreign company.

“Under President Muhammadu Buhari, the ministry of power, during Babatunde Fashola’s tenure, decided to deal directly with Sinohydro, the Chinese Company engaged by Sunrise. Sunrise then took the federal government to the International Chamber of Commerce Court of Arbitration in France, since the project would be financed by the China Eximbank,” the minister said.

However, he noted that last year, Sunrise accepted a settlement of $200 million as settlement agreement, which he admitted that the federal government is trying to pay, so as to free the project from any encumbrances.

He said that while the ministry of power has gone very far in collaborating with the Taraba state government to secure the project site, Buhari has also directed the Nigerian Sovereign Investment Agency (NSIA) to re-evaluate the scope of the project, so as to make it less cumbersome and bankable in order to facilitate easy foreign financing.

He disclosed that the dam will be scaled down to N1,500MW instead of its previous status of 3.050MW to reduce the cost and period of execution.

The release stated that Mamman remains the only minister to successfully move the Mambilla Power Project from the drawing board, noting that before now, no government or minister had taken the first step of acquiring the land, let alone commit the host communities and the state government towards starting the project.