Minister of Power Engr. Sale Mamman has confirmed that there is arbitration over the 3050 megawatts (MW) Mambilla hydropower project because of a contractor, who was excluded, he explained however that there is no court injunction stopping the project from commencing.
Daily Trust reports that in November 2017, the federal government under the former minister, Babatunde Fashola, signed a fresh Engineering, Procurement and Construction (EPC) joint venture contract with Sinohydro Corporation of China and CGCOC.
It, however, excluded a local partner, Sunrise Power and Transmission Company Limited (SPTCL) and the owners sued government over the issue.
Clarifying the progress yesterday, Engr. Mamman said: “Yes, I agree that there is arbitration but we have entered into an agreement with the Chinese EXIM bank by giving them a Comfort Letter, but nothing is stopping us from starting Mambilla.
“I want to assure you that there is no court injunction that says we should not start the project until the court cases are over. We have explained this position to the Chinese EXIM bank and they have understood our view and they can bring in their resources and start the project. The government will take responsibility for the outcome of the court resolution,” he said.
On resolving the issue with Sunrise Power, Mamman added, “We are almost there with the issue. We have sat with them and very soon, you will hear the position of the government or Sunrise Power about this. The Chinese EXIM bank has given us their assurance and they said they are ready to start.”
FG reviews Mambilla hydropower project cost
On whether the money earmarked for the project will produce the expected 3050 megawatts, the minister recalled that the Export-Import Bank of China will provide 85 per cent while the federal government will provide 15 per cent.
The minister, however, said the project cost which was $5.7bn in 2017 has been subjected to another review to ascertain the cost, adding that the 3050MW capacity quoted in the agreement was a projection.
“It is a projection and by implication, that $5.7bn is not going to be a real figure and I asked Mr President to give me an approval for that. We have gone to the Chinese and the consultant for a review which we have now come up with. So the government will have to sign an MOU again with the Chinese EXIM Bank,” Mamman said.
Tales around Mambilla
The Mambilla project is said to be originally set to produce 2600MW when it was conceived and had been on the drawing board for about 40 years. It had seen controversies since 2003 and was at the point of being flagged off in 2014 before it again fell into another legal hurdle.
The Federal Executive Council (FEC) on August 30, 2017, approved the award of the contract to Messrs China Gezhouba Corporation (CGC), Sinohydro Corporation Limited and CGOC Group Limited. Fashola signed the $5.72bn contract with the firms in November 2017. It was expected to be completed in about 60 months.
The minister assured that President Buhari will make significant progress on the Mambilla project before the end of his tenure in 2023.
“The president has said it and we are on it. We have entered an agreement with Siemens and they are coming to do some expansion,” he noted.