BY ABAH ADAH, Abuja
Unresolved legal tussle may have further delayed the take-off of the 3,050MW Mambilla Hydroelectric Project in Taraba State conceived about 40 years ago, LEADERSHIP findings have revealed.
The federal government and the contractor who was first awarded the contract for the construction of the plant are yet to resolve the legal tussle that ensued after the contract was re-awarded to a consortium of Chinese firms.
The hydroelectric facility is being developed on the Donga River near Baruf, in Kakara Village of Taraba State.
The project is undertaken by the federal ministry of Power, with the help of Chinese investments.
Information obtained by LEADERSHIP from the ministry revealed that the legal action was instituted in 2007 against the federal government and the Chinese firms that were later contracted at court of arbitration in Paris, France, by the original contractor, Leno Adesanya, who was the chairman/CEO of Sunrise Power and Transmission Ltd over alleged breach of contract.
The suit stalled the project, causing work on the project originally scheduled for completion in 2012.
Instead, by 2012, the project capacity was increased to 3,050MW.
It was gathered that Sunrise, which claimed to have been awarded the build, operate and transfer (BOT) contract in 2003, accused the Nigerian government of breaching its 2003 agreement when it granted a separate contract to Chinese companies four years later and sought an arbitration award of $2.3 billion.
The legal wrangle was said to have caused the Export-Import (EXIM) Bank of China to lose interest in financing the Mambilla plant.
Details of the updated Certificate of No Objection issued by BPP on August 1, 2017 after the contract was awarded as a Joint Venture (JV) to Messrs CGGC/SINOHYDRO/CGCOC for $5.792 billion (about N2.1 trillion) in 2017 indicate that the federal government is getting funding for the project to the tune of $5.495billion (about N2trn) from the China Export Import (EXIM) bank as a concessionary loan, translating to about 85 per cent of the sum, while the federal government is to provide the counterpart funding of 15 per cent.
Expected to commence operation in 2030, Mambilla will be Nigeria’s biggest and Africa’s second biggest power plant, producing approximately 4.7billion kWh of electricity a year.
It is estimated to cost $5.8bn and expected to generate up to 50,000 local jobs during the construction phase.
The information sourced from the ministry also revealed that “an audit is currently reviewing what has been spent so far.”
The information equally showed that though there was no need for federal government’s allocation as the Mambilla project is to be funded by EXIM Bank China to the tune of 85 per cent and NSIA, 15 per cent, the ministry was forced to look inwards due to the delay in releasing the fund by EXIM Bank.
The federal government, in the 2021 appropriation, made some allocation to the project to cater for some preparatory works on the project such as access road, generator house, among others, to move the project forward.
In the 2021 appropriation document sighted by LEADERSHIP, fresh provisions were made for consultancy services for land survey of the area to the tune of N75,000,000.
The rest which were captured as ongoing include federal government’s counterpart funding of N200, 000, 000; Consultancy Services Enumeration & Valuation of communities and persons to be affected, N75,000,000; detailed engineering design, project mgt & supervision of the project, N75, 000,000; and advisory/consultancy services for Mambilla & Kashimbilla Power Evacuation Project, N150,000,000; totalling N575 million.
In the first quarter of 2020, the federal government had announced that the coast was clear for works on the Mambilla Hydroelectric Project to commence as the legal dispute that had delayed works for years was being resolved.
The minister of Power, Engr Sale Mamma, who made this known said, “We have now overcome the major problem stopping this project and it [the legal dispute] is nearly over.”
He said the Attorney-general of the Federation and minister of Justice, Abubakar Malami (SAN) was finalising the terms of the settlement, which were undisclosed.
Realising that even the process of acquiring legal title to the land by the federal government was not concluded as at first quarter of 2020, the House of Representatives expressed regret that the project had existed only on paper after 40 years.
The chairman, House Committee on Power, Hon Magaji Aliyu, made the disclosure when the committee paid an oversight visit to the Ministry of Power in Abuja.
His position came shortly after a Right of Way report from the director, Renewable Energy & Rural Power Access, Mr Faruk Yabo disclosed that the land for the project had just been acquired.
Yabo, who is the chairman of the Project Implementation Committee on the Mambilla Power Project, told the visiting legislators that there was no legal title to the land until then.
“Everybody knows there is a Mambilla power project, but there is no legal title to the land, so the ministry and Taraba State government are working on this,” he said.