Former Minister Drops Heavy Accusation Concerning Mambilla Hydropower Project On Obasanjo (DETAILS)

Former Minister Drops Heavy Accusation Concerning Mambilla Hydropower Project On Obasanjo (DETAILS)

Former Minister of Power and Steel, Olu Agunloye, has accused ex-President Olusegun Obasanjo of distorting facts regarding the stalled multi-billion-dollar Mambilla Hydropower Project.

Initially awarded in 2003 to Sunrise Power and Transmission Limited during Obasanjo’s tenure, the project has since been entangled in a lengthy legal dispute now under international arbitration.

Obasanjo alleged in a recent interview that Agunloye had fraudulently granted the contract without Federal Executive Council approval.

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However, in a statement released on Sunday, Agunloye refuted Obasanjo’s version of events. He asserted that he was being made a scapegoat by the Nigerian government to evade responsibility for abandoning contractual agreements on the project.

Agunloye explained that the contract, awarded in 2003, was based on a Build, Operate and Transfer basis to provide Nigeria with its largest power plant, boasting a capacity of 3,050 megawatts, at no cost to the government.

Although the project initially aimed to significantly augment electricity supply and address energy shortages in the country, Obasanjo later changed course, opting for direct government funding.

In 2008, President Umaru Musa Yar’Adua, who succeeded Obasanjo, terminated the project, citing alleged corruption within the administration from 2003 to 2007.

Subsequently, the company filed a case in an international arbitration court, asserting that the contract termination was unlawful.

Obasanjo estimated the project’s cost at $6 billion in his recent interview. He distanced himself from the project’s current state, claiming ignorance of Agunloye’s role in awarding the contract. Obasanjo also argued that no minister during his tenure could have authorized such a contract without his consent, emphasizing that ministers lacked the authority to award contracts exceeding N25 million.

Agunloye rebutted Obasanjo’s statements, asserting that the former president was indeed the one who awarded the contract.

“The former president was not correct when he referred to the award to Sunrise simply as a $6 billion contract (that is, N800 billion in 2003) under his watch. In truth, it was a Build, Operate and Transfer (BOT) contract in which the FGN did not need to pay any amount to the contractor, Messrs Sunrise Power and Transmission Company Limited (Sunrise).

“As a matter of fact, Sunrise has not been paid a single Naira or Dollar by the FGN from 2000 till date (14/9/23). Sunrise was to source for funds and execute the project with own funds. The investment of Sunrise to construct the Mambilla hydroelectric project up to the completion stage to deliver electricity was adjudged at a maximum of $6 billion by four Ministers of Power and the former president (Chief Obasanjo) before I became Minister of Power. Sunrise was to recoup its investment from the sale of the generated electricity over a 30- to 40-year period at pre-determined tariffs, also agreed with FGN before May 2003.”

Mr Agunloye stated that in 2003, Mr Obasanjo changed his mind and decided to award the contract, “by paying from government own funds.

“The former President decided, therefore, to break the Mambilla Hydropower Project into smaller components, like civil engineering works, hydraulic works, structural works etc. with the intention to award them as separate multiple contracts as Government procurements, on cash and carry basis, for which Nigerian Government would pay mobilisation fees and make other payments in stages to contractors.

“ When one of the contractors, which got a component of the Mambilla project awarded by President Obasanjo as $1.46 billion procurement contract, presented its request for a $400 million mobilisation fees, President Yar’Adua scrutinised the contract and cancelled it in 2008 because of proven corruption on the part of officials who served under President Obasanjo between 2003 to 2007.”