$5.8b Mambilla power project hit by legal crisis

Posted by News Express | 24 December 2018 | 911 times

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•Power plant

Barely a year after the signing of an agreement for the construction of the $5.792billion (about (N2.096trillion) Mambilla hydro-power project in Taraba State,  the contract is enmeshed in a legal crisis.

The legal hitch follows moves by some forces in government  to sideline the local content partner, Sunrise Power and Transmission Company Limited.

The company was awarded the Build Operate and Transfer (BOT) contract  for the project in 2003.

But the issues surrounding the project are now before the ICC Arbitration Panel in Paris.

Although an amicable resolution of the legal dispute has been proposed, it was learnt the project might be stalled unless President Muhammadu Buhari intervenes in the crisis.

The Federal executive Council (FEC) on August 30, 2017 approved the award of the project to Messrs China Gezhouba Corporation, Sinohydro Corporation Limited and CGOC Group Limited.

In November 2017, the Minister of Works,  Housing and Power, Mr. Babatunde Fashola  signed the contract for the 3,050megawatts hydro power project.

During a state visit to China on September 7, 2018, the President of CGCC, the construction company, Prof. Lyu Ze Xiang, told the President that “our target is to commence the project early next year.”

But while the President is looking forward to the take-off of the project, the legal dispute before the international arbitration panel is yet to be resolved.

Sensing a likely legal crisis, the Attorney-General of the Federation and Minister of Justice, Mr. Abubakar Malami, n a July 24, 2017 letter to the then Acting President, Prof. Yemi Osinbajo, recommended that the interest of the local partner, Sunrise Power and Transmission Company Limited, should be accommodated.

In  a memo,  the AGF said: “Sunrise Power and Transmission Company Limited should be engaged as Local Content Partner on the Mambilla Project as a means of accommodating its prior contractual interests on the project.”

But instead of complying with the advice of the AGF, some government officials had been trying to shut out the local content partner.

As at press time, it was gathered that the Federal Government was yet to reach an amicable resolution with Sunrise Power and Transmission Company Limited and Sinohydro Corporation states at the arbitration panel in Paris.

Excerpted from The Nation report


Source: News Express

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