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 hydroelectric 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 Aso Rock.
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.
Source: The Cable
