In a recent development, former Nigerian President Olusegun Obasanjo has expressed his readiness to testify on behalf of Nigeria in any relevant forum regarding the contentious Mambilla power contract. This comes amid an arbitration case between Sunrise Power and Nigeria at the International Chamber of Commerce (ICC) in Paris, where Sunrise Power alleges a breach of contract.
Sunrise Power claims to have been awarded a $6 billion Build, Operate, and Transfer (BOT) contract in May 2003 during the Obasanjo administration. However, the federal government later repudiated the agreement, leading to the ongoing arbitration proceedings at the ICC.
Sunrise Power is seeking compensation of $2.3 billion, contending that it had incurred significant expenses on financial and legal consultants before the contract was canceled. Obasanjo’s offer to testify adds a significant dimension to the case, potentially shedding light on the circumstances surrounding the contract and its subsequent repudiation.
In its defence at the arbitration, Nigeria is alleging fraud and corruption of public officials in the award of the contract — similar to the P&ID case in which a UK court nullified an $11 billion award against the country for similar reasons.
The Economic and Financial Crimes Commission (EFCC) has reportedly uncovered serious issues of fraud and has filed charges against suspects.
In a recent interview with TheCable, former President Olusegun Obasanjo had challenged Olu Agunloye, who was minister of power at the time, to tell Nigerians where he derived the authority to award a $6 billion contract to Sunrise.
Agunloye issued a statement, insisting that he had Obasanjo’s approval.
TheCable understands that Lateef Fagbemi, the attorney-general of the federation, thereafter wrote to Obasanjo seeking information on various claims made by Agunloye and Sunrise on the Mambilla project.
‘LETTER OF COMFORT’
In documents seen by TheCable, the late Olusegun Agagu, Agunloye’s predecessor, had written to Obasanjo on November 20, 2002 seeking approval to invite Tafag Nigeria Ltd and Sunrise for detailed negotiations for the construction of the power station.
On November 28, 2002, Obasanjo gave the minister the go-ahead to invite the two companies and added: “Please give the two the same parameter i.e. part participation not more than 25% higher than prevailing tariff of the thermal plant.”
However, on April 7, 2003, Agunloye, who had by now become minister of power with Agagu having resigned to contest for governorship in Ondo state, wrote to Obasanjo, asking him to recall his earlier approval for the invitation of “Messrs Tafag Nig. Ltd, Sunrise Power Ltd and Lemna International for further negotiations”.
Instructively, Lemna International was not mentioned anywhere in the previous memos.
Agunloye thereafter sought Obasanjo’s approval to issue a “letter of comfort” to Sunrise for a BOT contract.
A letter of comfort, also called “letter of intent”, indicates an initial willingness to enter into a contractual obligation without a legally enforceable contract.
In his reaction to Agunloye’s request, Obasanjo said he had no objection but asked him “to bring a memo to Council to include comparison with coal-fired plant for 4000MW to 5000MW”.
In his letter to Fagbemi, Obasanjo said: “What is abundantly clear is that at no time did Dr Agunloye comply with the foregoing directive by bringing a memo to Council to include the [stated] comparison; nor can my directive be stretched to be inclusive of any approval to award any contract to Sunrise Power and Transmission Company Limited or any other person.
“In any event, my directive as stated above cannot by any stretch of imagination reasonably be extended to mean that issuing “a letter of comfort” translates to an award of contract.
“It is therefore clear that at no time was any contract awarded to Sunrise Power by anyone in my Administration.”
Agunloye wrote a letter of award to Sunrise on May 22, 2003 — a day after the federal executive contract stepped down his memo seeking the approval to go ahead.
Obasanjo maintained that no minister had the authority to commit Nigeria to beyond N25 million without express presidential consent when he was in office.
He assured Fagbemi of his “continued commitment” to assist the government “by shedding more light on these matters as may be required of me. In particular, the embarrassment to Nigeria caused by these acts of fraud, deceit and malfeasance of Dr. Agunloye and others of his ilk does no good to Nigeria or Nigerians. I have therefore resolved to make myself available to testify in Arbitration or any forum should you consider it necessary in our national interest”.