FG reopens talks with P&ID over $9.6bn judgment debt

President Muhammadu Buhari has reopened talks with Process and Industrial Development (P&ID), the Irish engineering firm that recently won a $9.6 billion judgement against Nigeria.

Vice President Yemi Osinbajo chaired the meeting in Abuja, which started around 1.30pm and ended by 3:50pm.

A delegation of P&ID was observed leaving Osinbajo’s conference room over an hour after the meeting went into closed-door discussions.

No official position on why the meeting held was made available to the press but a presidential source confirmed representatives of P&ID were invited to the meeting.

Asked to throw more light on the outcome of the meeting, Senior Special Assistant to the Vice President on Media and Publicity, Laolu Akande, said he was not authorised to speak.

He said his principal only represented President Buhari, who had directed him to preside, directing journalists to the minister of information and culture, Alhaji Lai Mohammed.

Those at the meeting included the ministers of Finance, Budget and National Planning, Zainab Ahmed, Justice, Abubakar Malami, Mohammed, and minister of state for petroleum, Timipre Sylva.

Others were the minister of state for Niger Delta affairs, Festus Keyamo, group managing director of the Nigerian National Petroleum Corporation, Mele Kyari, the acting chairman of the Economic and Financial Crimes Commission, Ibrahim Magu, and the governor of the Central Bank of Nigeria, Godwin Emefiele.

Also, President Buhari, yesterday, met with the Attorney-General of the Federation, Malami, at the Presidential Villa, Abuja. He was accompanied to Buhari’s office by Chief of Staff to the President, Abba Kyari.

The AGF declined to state the purpose of his visit to the press, but it may not be unconnected with the $9.6 billion judgement entered against Nigeria in favour of P&ID by a United Kingdom court. The AGF left the President’s wing at about 12.25pm.

Meanwhile, except urgent steps are taken, the Federal Government would, again, lose a substantial part of what is left of the nation’s foreign reserves in arbitration claims amounting to $2.3 billion over a breach in the contractual agreement for the 3,050 megawatt Mambilla hydropower project in Taraba State.

This is coming two weeks after a British court slammed the Federal Government with a $9.6 billion fine in a case involving the Ministry of Petroleum Resources and an Irish firm, Process and Industrial Development (P&ID), over a failed gas processing plant deal, though officials have said Nigeria has concluded plans to appeal the court verdict.

Daily Sun had on Monday exclusively reported that the Mambilla power project, which was first mooted in 1972, has failed to wheel out a single megawatt of electricity as a result of a legal tussle and bureaucracy.

The project was conceived to aid the country’s power generation and boost industrialisation, especially in the northern part of the country. Regrettably, 42 years after it was initiated, the project is yet to come to fruition.

In 2018, barely a year after the signing of an agreement for the construction of the $5.792 billion (about (N2.096 trillion) Mambilla hydropower project, the contract was enmeshed in a legal crisis.

The legal hitch followed moves by some forces in government to sideline the local content partner, Sunrise Power and Transmission Company Limited (SPTCL).

The company was awarded the build operate and transfer (BOT) contract  for the project in 2003.

The issues surrounding the project are now before the International Chamber of Commerce (ICC) Arbitration Panel in Paris, France, over alleged breach of contract.

Although an amicable resolution of the legal dispute has been proposed, it was learnt the project might remain stalled, unless President Muhammadu Buhari intervenes. The $5.7 billion Mambilla hydropower facility has been stalled over unresolved legal issues and funding disagreements involving the Nigerian government and the local content partner, SPTCL.

SPTCL is now making the following claims for being excluded from the final contract:

  • Wasted expenditure, over $100 million
  • Loss of profit as content partner, $565 million
  • Loss of the commission due by Sinohydro to Sunrise, $855 million
  • Loss of profit that would have been made through the resettlement contract, $525 million
  • Loss of reputation, over $25 million.

The chief executive officer of SPTCL, Mr. Leno Adesanya, alleged that his company was sidelined in the project by the Ministry of Power, in a series of petitions to President Buhari, Vice President Yemi Osibanjo, Attorney-General of the Federation and Minister of Justice Abubakar Malami, and Babatunde Fashola, former minister of power.

SPTCL, which claimed to have been awarded the BOT contract in 2003, said some “vested interests” in government had, in 2017, signed another contract with three Chinese companies, Sinohydro 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.

The local content partner had accused Abba Kyari, Chief of Staff to the President, of taking the unilateral decision to remove the company from the contract. SPTCL also accused Fashola of reneging on his promise to support the project.

Adesanya claimed the company had spent millions of dollars with financial and legal consultants to raise about $6 billion for the execution of the project, yet the company has suffered a lot of setbacks over the years “through improper administrative interruptions and interventions.”

The China Exim Bank, which was expected to provide 85 per cent of the joint funding along with the Federal Government for the Mambilla project, insisted on compliance with due process and terms of the November 2017 engineering, procurement and construction contract signed with the partners before releasing funds.

Sensing an imminent legal crisis, Malami, in a July 24, 2017, letter to the then Acting President, Osinbajo, recommended that the interest of the local partner be accommodated.

In  a memo,  the AGF said: “Sunrise Power and Transmission Company Limited should be engaged as local content partner on the Mambilla project as a means of accommodating its prior contractual interests on the project.”

But rather than complying with the advice of the AGF, some government officials have been trying to shut out the local content partner.

The power play in government over the local content partner has now created a major hurdle for the Chinese consortium. – The Sun.

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