Now that the Mambilla Mess Is Over

It came as a mighty relief to me when news broke on Thursday that an arbitration panel of the International Chamber of Commerce (ICC) in Paris, France, ruled in favour of Nigeria in the $2.3 billion award sought by Sunrise Power over the Mambilla hydropower project. The tribunal also directed Sunrise and its promoter, Chief Leno Adesanya, to reimburse 75 percent of Nigeria’s arbitration costs. If it had ruled otherwise, it would have been yet another win for those conspiring to keep holding Nigeria down with schemes and scams. I do not deceive myself that this is the last of such schemes, but at least we should be able to enjoy this moment and toast to this vital win.

Here is a quick background to refresh our collective memory. On Wednesday, May 21, 2003, Dr Olu Agunloye, then minister of power and steel, presented a memo to the federal executive council (FEC) seeking approval to award a build, operate and transfer (BOT) contract for the Mambilla project to Sunrise Power and Transmission Ltd, a company promoted by Adesanya. The project, conceived in 1972, had been suffering crippling delays. This is a country badly in need of electricity to power its economy. Mambilla was projected to generate 3,960 megawatts of electricity. Nigeria’s current biggest hydropower plant has the capacity to generate only 760mw — and it was built in 1968.

A former minister who attended the FEC meeting at which the project was discussed said Obasanjo was surprised that Agunloye was still presenting a memorandum on the project despite their extensive discussion the previous day. Obasanjo’s concern was said to have been straightforward: Nigeria could not afford to repeat in the power sector the costly mistakes made in steel, where the government embarked on several ambitious projects that it lacked the resources to complete. He reportedly told FEC that if the National Electric Power Authority (NEPA) were a private enterprise, it would have been declared bankrupt long before then. He wanted a new framework for the sector.

What the power sector needed, in his view, was proper reform rather than another massive financial commitment by the government. In his concluding remarks, Obasanjo reportedly directed that Mambilla should be driven by private investment. He also asked ministers to be careful when negotiating government participation in projects because of the financial and legal liabilities such commitments could create. In short, the council did not approve Agunloye’s memorandum. Instead, he was asked to withdraw it, while the project was to be reconsidered at a later date. Alas, what happened next became the source of a controversy and litigation lasting for more than two decades.

On May 22, 2003 — barely one week before Obasanjo’s first term ended — Agunloye wrote to Sunrise Power, saying he was pleased to convey the approval of the federal government for the award of the project at a “provisional sum” of $6 billion. Sunrise accepted the offer four days later. Yet Obasanjo’s administration did not treat the letter as a binding contract during its second term. When Sunrise wrote to the power ministry in August 2003 seeking payment for what it described as “pre-EPC” development work, Senator Liyel Imoke, who had taken over as minister, replied that there had been no approval to engage the company. But Sunrise clearly had its own gameplan.

Very conversant with how to work the Nigerian system, Sunrise kept the matter alive through many administrations, even when a transparent contracting process had been put in place. In June 2007, after the federal government awarded the civil works and hydraulic steel structures component to the CGGC-CGC joint venture, Sunrise went to court and demanded $960 million for alleged breach of contract. Chief Michael Aondoakaa, who became attorney-general in July, then attempted to bring Sunrise back into the project. He reportedly said President Umaru Musa Yar’Adua was unhappy that the arrangement initiated by Agunloye had not been respected. He was with Sunrise all the way.

The CGGC-CGC JV contract was eventually revoked in 2009, and Mambilla returned to familiar territory: legal complications and little progress on the ground. The project stalled. President Goodluck Jonathan, who assumed power in 2010, tried to get the project back on track in 2012. Attempts to settle out of court with Sunrise failed. Things kept going to and fro until President Muhammadu Buhari, who came to office in 2015, decided to revive the project. In 2017, Sunrise headed for arbitration at the ICC in France after the turnkey contract was re-awarded to the CGGC/CGCOC/Sinohydro JV following a memo from Mr Babatunde Fashola, then minister of power.

Sunrise’s claims posed a serious legal challenge to the JV (which was to be financed 85 percent by the China Ex-Im Bank) and effectively stalled the project again as the Chinese did not want any legal tango. No-one wants it. In arbitration, Sunrise sought about $2.3 billion in compensation, claiming that it had spent millions of dollars on financial and legal consultants between 2003 and 2009 regarding the Mambilla project. This claim raised another uncomfortable question. According to its corporate filings, Sunrise declared total assets of only N1 million — roughly $2,000 at the time — and no turnover. Its bank accounts did not show any proof that it was transacting in millions of dollars.

Mr Abubakar Malami, Buhari’s attorney-general, initially appeared sympathetic to Sunrise’s position. In a legal opinion dated July 24, 2017 and addressed to Prof Yemi Osinbajo, then acting president, Malami recommended that the company be accommodated as a “local content partner” in recognition of what he described as its prior contractual interest in Mambilla. But less than a month later, Malami completely changed his position. In another letter dated August 17, 2017, he explained that his earlier legal advice had been based on limited documentation. After examining additional records, he said, he had discovered that the supposed 2003 contract had not received FEC approval.

The inimitable Malami would later change course again. In January 2020, working with Saleh Mamman, then minister of power, he entered into a settlement arrangement with Sunrise. Under its terms, Nigeria was to pay the company $200 million within 14 days. Failure to meet the deadline would attract an additional $200 million, raising the country’s liability to $400 million. The agreement also curiously provided that Sunrise should return to ICC arbitration if Nigeria failed to pay. More remarkably, the parties agreed that any renewed arbitration should be accelerated, though the financial claim was far above the threshold ordinarily associated with expedited proceedings.

While the case was in arbitration, Agunloye, now being prosecuted by the Economic and Financial Crimes Commission (EFCC), wrote a scathing article attacking TheCable — the organisation I work for — because of its persistent coverage of the saga. He said TheCable had been “contracted” to report on his Mambilla mess. Such cheap shots. They come with the terrain. In 2018, when we reported the questionable payment of $17 million as legal fees to Malami’s lawyer friends for the repatriation of $321 million Abacha loot, Buhari was told that we were “contracted” by the “opposition” to discredit him. Malami even sued TheCable for alleged libel, though he quietly but wisely abandoned the case.

The ICC tribunal did not have kind words for Malami over his conduct in the Mambilla affair. The tribunal, in their decision, said Malami deliberately acted against Nigeria’s interest, that he maintained an “inappropriate relationship” with Adesanya and participated in the “corrupt” settlement agreements. Malami was effectively negotiating for Sunrise rather than the federal government, the tribunal said, when he altered the terms of a proposed settlement in a way that potentially doubled Nigeria’s exposure to $400 million, with interest accruing at 10 percent per annum compounded daily. It is incredible the extent to which some people hate this country.

Now that the saga is over, thanks to the massive victory at the ICC tribunal, President Bola Ahmed Tinubu must put every effort into bringing the project to life. We need every megawatt of electricity we can get into the grid so that the power situation can improve. We must not allow another round of wrangling to start over the project. I would say 3,960mw is not a joke and hydro is still one of the cheapest sources of power, although wind and solar top the list. I do not want to be cynical and say that some buccaneers might already be devising another scheme to scam the country over the Mambilla project. Tinubu must resist this. For the love of God, we should let this country work.

AND FOUR OTHER THINGS…

MASS MURDER?

Miners usually die when a mine caves in, but what happened in Minna, Niger state, on Thursday was something else. The Nigeria Security and Civil Defence Corps (NSCDC) had arrested about 60 suspected illegal miners. As the story goes, they were locked up in a cell, only for 37 of them to die overnight. Mr Suberu Siyaka Aniviye, the state commandant of the NSCDC, blamed the deaths on a “disease outbreak”. I will not say anything about that. But I will just plead with the government to do a thorough investigation. No attempt must be made to cover up anyone found culpable in what may turn out to be a massacre. These were human beings, even if they were truly illegal miners. Tragic.

KILLING KC

The King’s College crisis is yet another proof of how reforms are frustrated in Nigeria. The school has been suffering from neglect for ages because of poor funding and other related issues. The old boys have been spending their own resources to help improve the conditions. Now that the federal government has decided to enter into a partnership with them to run the school, the unions and their allies are doing everything to frustrate it, peddling lies. A similar policy for all the Unity Schools was mooted by Mrs Oby Ezekwesili when she was minister of education in 2006. It was thwarted by the naysayers. The schools remain as bad as they were then, if not even worse. We never learn. Sad.

CAMPAIGN TALK

The 2027 presidential campaign has finally taken off, though at slow speed. Mr Seyi Makinde, governor of Oyo state and presidential candidate of the Allied Peoples Movement (APM), said President Tinubu is running a “voodoo economy”. He said: “Yes, FAAC (federation allocation) has gone up. But when I came in as governor (in 2019), the first salary bill I signed was N4.5 billion. Today, the salary bill is N18 billion. But the N18,000 of that time can even buy more than what the current N70,000 can do today.” He was silent on how much Oyo now gets. By the way, does he know nothing stops him from doubling minimum wage in Oyo state and campaigning on it? Genius!

NO COMMENT

Bishop Leonard Kawas, president-general of the Charismatic Bishops Conference of Nigeria (CBCN), did not find it funny after he was called a fake bishop for endorsing President Bola Tinubu’s re-election bid. As a rule of thumb, I oppose the involvement of the clergy in politics. I want to be hearing the word of God from their mouths, not election slogans. But the reality of Nigeria today is that pulpits are now being used for electioneering. And as a believer in democracy, I think people should be free to endorse whoever they like without being bullied. Kawas wondered why he was not called a fake bishop when he was campaigning for Peter Obi in 2023. Should we tell him? Hahahaha…