Olanipekun Writes AGF, Asks FG to Amicably Settle $5.8bn Mambilla Power Project with Sunrise Power

Wale Igbintade

A former President of the Nigerian Bar Association (NBA), Chief Wole Olanipekun, has 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).

Olanipekun, a Senior Advocate of Nigeria (SAN), in a letter written to the Attorney-General of the Federation and Minister of Justice, Chief Lateef Fagbemi, on behalf of the firm, urged the minister to carry out thorough investigation on the matter with a view to taking the needed steps, including, but not limited to, the total and global resolution of the matter.

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

In the 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,” the senior lawyer stated that it was not fair that the dispute had stagnated the commencement and execution of the Mambilla project for many years.

The letter read, “In view of 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.

“Our client is of the view that this administration has a rare opportunity to finally commence the execution of the Mambilla project for the benefit of all Nigerians. If the FGN is not favourably disposed to a financial pay-off of $600 million to our client as consummated above ($400 million Plus 10% Compound Interest), the FGN may wish to consider the following prayers:

“Restitution of our client to its former status as the EPC Contractor under the November 2012 General Project Execution Agreement (GPEA) and, most importantly, as the exclusive focal content partner on the project.

“This would entail the restoration of our client’s full rights under the GPE Agreement and the signing of a revised EPC contract with our client and its Chinese Consortium partners for the sum of $5.8 billion (adjusted for US$ inflation from 2017 to date) as requested by our client under the arbitration.

“Payment of 25 per cent counterpart funds to the China EximBank and EPC (GPEA Contractors) Consortium for the execution of the Mambilla hydropower project;

“Reimbursement of our client’s $200 million legal fees, expenses and liabilities to the litigation funders without which there cannot be a closure to the subsisting arbitration.

“It is our client’s patriotic position that there is the urgent need for the settlement of this legal dispute and other matters arising therefrom to pave the way for the involvement and commitment of both local and international stakeholders in the project.

“In this wise, may we urge the attorney-general to carry out a thorough investigation of this matter with a view to taking the needed steps, including but not limited to, the total and global resolution of this long drawn matter.”

Olanipekun stated that as far back as 2003, it had, in consortium with North China Power Group, expressed interest in the construction of a 3960 MW Hydro-Electric Power Plant in Mambilla, Taraba State (Mambilla project), and subsequently submitted its proposal and made presentations before the inter-ministerial Technical Committee set up by the FGN.

He stated that after critical analysis of the proposals and presentations based on cost effectiveness, capability to carry out the job, understanding of the project and economic implications, recommended that the execution of the Mambilla project was awarded to it.

He added that upon the recommendation of the Technical Committee and the approval of then President Olusegun Obasanjo in November 2002, and in April 2003, the FMPS, vide a Letter of Award dated 22nd May 2003, signed by the then Minister of Power and Steel, Dr. Olu Agunloye, awarded a contract for the construction of a 3960 MW Hydro-Electric Power Plant in Mambilla, Taraba State, to Sunrise Power Transmission Company in consortium with North China Power Group on a 30 – 490 years build, operate and transfer (BOT) basis.

Olanipekun added, “Our client accepted the terms of the federal government’s offer vide a letter dated 26th May, 2003, and, forthwith, committed resources towards the preliminary stages of the project to the knowledge of the FGN.

“In furtherance of the contract, our client executed a tripartite consortium agreement with North China Power Group and Sinohydro Corporation (the largest hydropower provider in China) for the execution of the project and similarly engaged sundry consultants (both local and international) to work on the modalities for the successful execution of the project.”

He stated that when all efforts to get the federal government to honour the terms of the award failed, it engaged Chief Afe Babalola, who wrote a letter dated  February 4, 2005, to the federal government through the office of the Hon. Minister of Power and Steel, stating that a legally binding and enforceable contract had been created between the firm (in consortium with the North China Power Group) and the Federal Government of Nigeria, by virtue of the letter of award dated May 22, 2003 and our client’s acceptance dated 26th May 2003.

He added that rather than abide by the terms of its award, the federal government compounded matters when on May 28, 2007, the presidency unilaterally awarded a substantial part of the BOT contract to CGGC/CGC (a foreign consortium) without due process, thus, prompting his client to institute Suit No.: FHC/ABJ/CS/384/2007 at the Federal High Court, Abuja, in June 2007, claiming the sum of US$960 million in damages against the FGN.