₦airaland Forum

Nigeria Defaults On Mambilla’s $200m Settlement Agreement, Incurs Heavy Penalty

For multiple defaults on a $200 million settlement agreement it willingly entered, Nigeria now faces about $500 million in penalty over the botched $5.8 billion Mambilla hydroelectric power project.

The original awardee of the contract, Sunrise Power and Transmission Company Limited (SPTCL), had accepted a settlement offer of $200 million from the Nigerian government in the course of arbitration at the International Court of Arbitration in Paris, France.

The settlement offer was to compensate for the unlawful termination of the contract and the re-award of same to a Chinese firm.

Sunrise was also expected to let go of all claims to the project which has been grounded for 14 years.

The original contract was to generate 3,050 megawatts, but later reviewed, to 1,525  megawatts and the cost cut down to $4 billion.

Judicial interventions, sought home and abroad, have made it impossible for Nigeria to make any gains from the project and the vacillation of the administration of President Muhammadu Buhari on the compensation is further hurting the country.

In the Terms of Settlement, Nigeria agreed to a sustained halt on the project until the liability to Sunris, is discharged.

The original contract signed on May 22, 2003, became entangled in judicial web following the decision of the Nigerian government to revoke the contract on May 28, 2007 and re-award it to a Chinese company, Messrs China Gezhouba Group Corporation/China Geo-Engineering Corporation (CGGC/CGC).

SPTCL subsequently launched a judicial counter to the administrative action in suit number FHC/ABJ/CS/384/2007 which brought the project to a complete halt.

The suing firm asked for $960 million in damages for breach of contract.

In a series of documents sighted by Tribune Online, the Buhari administration which showed initial resolve to follow through with the amicable settlement initiated by its predecessors-in-office has now spurned the out-of-court settlement in multiple times, with Sunrise agreeing to let go of the penalty for earlier defaults.

The government even committed itself to $200 million penalty in an addendum to the original Terms of Settlement to assure of prompt payment of the $200 million compensation.

With Nigeria missing out on all payment deadlines, including the first payment of $100 million which should have been over a year ago, the arbitration in Paris in which Mr. Femi Falana is representing Sunrise, may eventually decide the fate of the country.

The default penalties waived by Sunrise, are also expected to come back into play, since the waiver was subject to federal government, not defaulting on the content of Addendum to the Terms of Settlement.

The reinstatement of the penalties and the $400 million already accruable on the latest default would push Nigeria’s indebtedness to Sunrise, to about $600 million.

The 10% per annum, interest rate, agreed to, by parties in the Settlement Agreement, would see a further spike to close to $700 million payable to Sunrise.

If arbitration resumes without the parties staying true to the Settlement Agreement, Sunrise is likely to walk away with close to $700 million, due to negligence on the part of decision makers in Nigeria.

If Sunrise returns to the Nigerian legal system, the earlier $960 million damages will come back into play.

While there is yet an official explanation for the continuous default, available documents showed that the trio of[b] Malami, Mamman and the Chief of Staff to the President, Ibrahim Gambari, have been communicating on the contract crisis.[/b]

President Buhari, according to a letter from Malami, is also aware of the developing saga. Where ever you find Malami you find incompetence

On 17th August, 2020, Malami wrote to the President through Gambari, a memo titled, RE-UPDATE ON THE IMPLEMENTATION OF THE MAMBILA HYDROELECTRIC POWER PROJECT AND THE WAY FORWARD.

“This is following an earlier brief I had sent to your excellency on this subject, via my letter dated 10th June, 2020 which brief, was expected to provide comprehensive update for the guidance of your excellency on this matter. A copy of the said letter is hereby attached as annexure AL.”

Obviously on the strength of from Malami’s letter, Mamman, in a memo dated 19th August, 2020 and addressed to Professor Gambari, said, “I refer to your letter dated August 18, 2020, with Reference No, SH/COS/03/A/2835, on the above subject and wish to comment on issues raised by the Hon. Attorney General and Minister of Justice, in the accompanying report as follows;

“The Ministry of Power is in total support of the position provided by the AGF who has been the lead in finding an amicable out-of-court settlement to the dispute.

Out of court settlement to share the loot with the French company.

The ultimate aim of the Ministry is to see that Mambilla project implementation can proceed unencumbered, therefore whichever settlement option that can lead to peaceful resolution for the project, to commence will be acceptable by the ministry.”
https://tribuneonlineng.com/nigeria-defaults-on-mambillas-200m-settlement-agreement-incurs-heavy-penalty/

DeBe32:
Y'all soon become Chinese

austinvsb:
While they may not be perfect (No country is), China has been Africa's best economic partner and friend in over 500 years.

And no you are not becoming Chinese anytime soon. Why? Because unlike your colonial masters that imposed both religion and a way of life on africans while looting the continent dry, china isn't trying to force their lifestyles on anyone.

Read and inform yourself rather than indulge in petty soundbites that are rooted in ignorance

austinvsb:
While they may not be perfect (No country is), China has been Africa's best economic partner and friend in over 500 years.

And no you are not becoming Chinese anytime soon. Why? Because unlike your colonial masters that imposed both religion and a way of life on africans while looting the continent dry, china isn't trying to force their lifestyles on anyone.

Read and inform yourself rather than indulge in petty soundbites that are rooted in ignorance.

DeBe32:
You tried to hard. This is why ignorant folks like you fall into trouble. No colonialism began forcefully. Go and do your digging. When the whites touched the shores of Africa, they didn't begin shooting. They offered incentives, brought mirrors, offered gifts, what became the end?

Your forefathers ended up at the mill in the aftermath of the trickery

I won't stop here. Go and do your research, Eastern Africa that use their national infrastructures as credit guarantee to seek loans from China, one by one are losing ownership to China.

I know quality education maybe costly, but some Internet research won't cost you more than some data. You schmuck. Woe betide your fada for having the nerve. You stupid ignorant entity.


While your woeful and abysmal attempt at sounding intelligent had little sparks here and there, your relationship with China is much of a dependent one,inability to stand alone and be productive which is always the launching pad into " willfull slavery " I will educate you for free. Nigerians buying Chinese goods isn't about trade partnership entirely but an economic dependency upon China which is why the average Nigerian businessman would die to go to China to import.

China produces in order to produce, not produce because of Nigeria. Nigeria on the other hand because of its parasitic dependency seeks China by all means which can be weaponised to become a slavery tool


I'm not done, you halfwit

djevino:
See how u finished the clown

DeBe32:
You tried to hard. This is why ignorant folks like you fall into trouble. No colonialism began forcefully. Go and do your digging. When the whites touched the shores of Africa, they didn't begin shooting. They offered incentives, brought mirrors, offered gifts, what became the end?

Your forefathers ended up at the mill in the aftermath of the trickery

I won't stop here. Go and do your research, Eastern Africa that use their national infrastructures as credit guarantee to seek loans from China, one by one are losing ownership to China.

I know quality education maybe costly, but some Internet research won't cost you more than some data. You schmuck. Woe betide your fada for having the nerve. You stupid ignorant entity.


While your woeful and abysmal attempt at sounding intelligent had little sparks here and there, your relationship with China is much of a dependent one,inability to stand alone and be productive which is always the launching pad into " willfull slavery " I will educate you for free. Nigerians buying Chinese goods isn't about trade partnership entirely but an economic dependency upon China which is why the average Nigerian businessman would die to go to China to import.

China produces in order to produce, not produce because of Nigeria. Nigeria on the other hand because of its parasitic dependency seeks China by all means which can be weaponised to become a slavery tool


I'm not done, you halfwit



If China were your partners, how many litres of crude oil does China buys from you, my dear partner.? Do do your digging. China and Russia entered Bilateral trade deals of over 100 Billion dollars within the last 3 years.


Please let me know if besides offering exhoorbitant loans that requires their company to handle the project development to the detriment of your own nations intellect, of what benefit are you to China, symbiotically, to call yourself a partner. Ode



Quote me anywhere you see China buy 25 litres of fuel from your backyard. Oponu

DeBe32:
Your forefathers ended up at the mill in the aftermath of the trickery

Penguin2:
I don’t understand the kind issue wey Mambilla and Ajeokuta Steel plant get.

Both companies need billions of dollars of settlement before work resume.

Who are these people holding these two important projects to ransom like this?

budaatum:
Imagine I tell you I would revive your great grandfather's Peugeot 204 right? First thing on your mind would be like "my great grandfather never had a Peugeot 204!" And the second thing would probably be "Peugeot 204 ki? Peugeot made 204 or buda you been smoking bad weed?" But let's say I convince you anyway.

Do you think whatever bill I initially give you would be growing daily like a baby on steroids or not?

Do you think the bill I give you if I ever finish would be less than the price of a current Peugeot or more?

And would your great grandfather's Peugeot 204 that I restored run as well as a brand new car that would likely be cheaper or might you need to park it in a museum?

Some things just ain't worth spending any more money on unless you got enough to burn is my point, and my own great grandfather rode a footwagon, as did my grandfather too, while my father drove a Peugeot 404 but Nigerian Army confiscated it because it was army green, so he got a Volkswagen Beetle.

DeBe32:
You tried to hard. This is why ignorant folks like you fall into trouble. No colonialism began forcefully. Go and do your digging. When the whites touched the shores of Africa, they didn't begin shooting. They offered incentives, brought mirrors, offered gifts, what became the end?

Your forefathers ended up at the mill in the aftermath of the trickery

I won't stop here. Go and do your research, Eastern Africa that use their national infrastructures as credit guarantee to seek loans from China, one by one are losing ownership to China.

I know quality education maybe costly, but some Internet research won't cost you more than some data. You schmuck. Woe betide your fada for having the nerve. You stupid ignorant entity.


While your woeful and abysmal attempt at sounding intelligent had little sparks here and there, your relationship with China is much of a dependent one,inability to stand alone and be productive which is always the launching pad into " willfull slavery " I will educate you for free. Nigerians buying Chinese goods isn't about trade partnership entirely but an economic dependency upon China which is why the average Nigerian businessman would die to go to China to import.

China produces in order to produce, not produce because of Nigeria. Nigeria on the other hand because of its parasitic dependency seeks China by all means which can be weaponised to become a slavery tool


I'm not done, you halfwit

AntiBeEmCe:
I was here for the vawulence.. nd mehn you schooled d mofo. All ds UARians ...una no dey smile o

Penguin2:
Wait! Nigerian army confiscated your grandpa’s car because it was army color? So this brutality didn’t start today?

Penguin2:
Meanwhile on Mambilla and Ajeokuta, I beg to disagree with your comparison of both companies to an old Peugeot 204 that is not worth spending on.

Do you know that Mambilla Dam is touted to have the capacity to provide over 3k megawatts of electricity when completed?

Do you know that Ajeokuta Steel plant is said to have the answer to steel issues in this country?

You don’t compare these two productive coys to an old rickety car.

For me, this is where Buhari needs to demonstrate his brutality. Cut the hands of all those working against the projects by crook or hook. It’s annoying.

budaatum:
1973, just so you know how far back


Do you know that Ajaokuta was never even completed and has never produced any steel to date, and even if it had been completed we'd be talking of decommissioning it now because it would be out of date? I would not talk about it in the same breathe as the Mambilla Hydroelectric Power Station, to be honest, which is a work in progress.

Ajaokuta Steel Company Limited (ASCL) popularly known as Ajaokuta Steel Mill is a steel mill in Nigeria, located in Ajaokuta, Kogi State, Nigeria. Built on a 24,000 hectares (59,000 acres) site starting in 1979, it is the largest steel mill in Nigeria, and the coke oven and byproducts plant are larger than all the refineries in Nigeria combined. However, the project was mismanaged and remains incomplete 40 years later. Three-quarters of the complex have been abandoned, and only the light mills have been put into operation for small-scale fabrication and the production of iron rods.
https://en.wikipedia.org/wiki/Ajaokuta_Steel_Mill?wprov=sfla1

The Mambilla Hydroelectric Power Station, is a 3,050 MW hydroelectric power project under development in Nigeria. When completed, it will be the largest power-generating installation in the country, and one of the largest hydroelectric power stations in Africa.
https://en.wikipedia.org/wiki/Mambilla_Hydroelectric_Power_Station?wprov=sfla1

One is worse than a rotten and abandoned Peugeot 204 and can not be restored because it was never fully built to begin with.

Penguin2:
If Ajeokuta had become totally worthless, successive governments wouldn’t be in negotiations with the Russian company that built it to try to revive it.