Just some weeks after losing a $9 billion arbitration involving a British firm, the Nigerian government is open to another billion-dollar fine for the alleged breach of contract on the Mambilla Hydroelectric Power Project.
Last month, a London-based court granted permission to energy firm, Process and Industrial Developments Ltd (P&ID) to seize some Nigerian assets worth $9.6 billion. The verdict was given over a failed project to build a gas processing plant in the southern Nigerian city of Calabar.
The government is now facing a legal action in France instituted by Messrs Sunrise Power and Transmission Company Limited (SPTCL). According to the firm, it was awarded a $5.8 billion contract for the construction of the project on the basis of Build, Operate and Transfer.
The Mambilla hydropower project, expected to commence operation in 2030, is a 3.05 Gigawatts hydroelectric facility being developed in Taraba State, Nigeria. Upon completion, the power plant will reportedly be the country’s biggest, producing approximately 4.7 billion kilowatt-hours (kWh) of electricity a year.
The plaintiff claimed that after they were awarded the contract in 2003, some ‘vested interests’ in government in 2017 signed another contract with three Chinese companies to form a joint venture for the execution of the same project. The organizations involved in the second deal include Sinohhydro Corporation of China, China Ghezouba Group Corporation of China and China Geo-Engineering Group Corporation.
This was after the company had spent millions of dollars on financial and legal consultants to raise about $6 billion for the execution of the project, the Chief Executive Officer of SPTCL, Leno Adesanya, said according to reports.
Moreover, Nigeria’s Chief of Staff to the President, Abba Kyari, was mentioned in the controversy. SPTCL reportedly accused him of taking a unilateral decision to remove it from the contract. Also mentioned was the former Minister of Power, Babatunde Fashola. The ex-Governor was accused of not supporting the project, as against his promise.
Consequently, SPTCL filed against the government and its Chinese partners before the International Chamber of Commerce in Paris over an alleged breach of contract which could see the Nigerian government fined $2.3 billion.