Home / News / Kyari, Fashola Fingered As Nigeria Faces Possible $2.3bn Fine

Kyari, Fashola Fingered As Nigeria Faces Possible $2.3bn Fine

A local company, Sunrise Power and Transmission Company Limited (SPTCL), has accused Abba Kyari, Chief of Staff to President Muhammadu Buhari, and then Minister of Power, Babatunde Fashola, of causing a breakdown in its business with the Federal Government in the Mambilla hydropower project in Taraba State.  

The company has, as a result, dragged the government before the International Chamber of Commerce in Paris, France over breach of contract. Reports say the government may face a $2.3 billion fine. 

In documents obtained by TheCable, the company had signed a build, operate and transfer (BOT) contract in 2003 with the government. It however said Kyari had taken the unilateral decision to remove the company from the contract while Fashola reneged on his promise to support the project. 

Leno Adesanya, the Chief Executive Officer of the company,  said some “vested interests” in government had, in 2017, signed another contract with three Chinese companies, Sinohhydro 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.

According to him, this was after his company had spent millions of dollars with financial and legal consultants to raise about $6 billion for the execution of the project. He had reportedly written petitions to Vice President Yemi Osinbajo, who was acting President at the time; as well as Abubakar Malami, Attorney General of the Federation (AGF); and Fashola.

This has made the SPTCL to make the following claims: Wasted expenditures: $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: $25 million+.

However, in a statement written by Hakeem Bello, Fashola’s spokesman, in January, he debunked the company’s accusations. 

“The attention of the Hon. Minister of Power, Works and Housing, Mr Babatunde Fashola SAN has been drawn to the spurious and unfounded allegations of Leno Adesanya with regards to the ongoing Mambilla Power Project,” the statement read.

“Nothing is more further away from the truth than the claim that the loan negotiations have stalled since 2017 because of an attempt to utilize $600 Million (equivalent of N219 Billion) from the 3,050MW hydropower project for a “pet project” not hitherto considered by the Federal Executive Council.

“There is currently no budgetary provision or cash provision of $600 million or the N219 Billion in any budget of the Federal Government for the Mambila Project. Therefore you cannot attempt to divert what does not exist.

“For the avoidance of doubt, the China Exim Bank disburse money to specific projects and on conclusion of negotiations, the loan will be devoted to the construction of the Mambila Power Project, which has been on the drawing board for close to 40 years before the advent of the Buhari administration which is now working assiduously to get the project off the ground.

“The antics of Leno Adesanya and his ilk would readily explain why the project has taken so many years without lift-off. Since Mr. Adesanya has chosen to go to court, he would be required to prove his baseless allegation in court.

“The Federal Executive Council which is the highest decision making organ of the Executive Arm of Government never awarded a contract for the project to Mr Adesanya.

“The allegation with regard to stalling the Mambilla project is untrue , baseless and a figment of Adesanya’s imagination. The events and relevant facts will show that because Mr. Fashola first presented a memo on the Mambilla Power Project to the Federal Executive Council in August 2017; which was the first ever Federal Executive Council approval given to the Mambilla project in favour of a Chinese Joint venture.”

The Cable further reports that Malami had in July, 2017 written a latter to Osinbajo recommending that SPTCL is accommodated as a local partner in the project. He however backtracked in August of the same year, saying there was no requisite Federal Executive Council approval for the project. 

Gbolahan Elias, a Senior Advocate of Nigeria, had responded that at the time the contract was signed (2003), there was no statute requiring the FEC’s consent before a letter of award is issued. 

Adesanya had also petitioned Buhari in 2018, asking that he saves the project conceived in 1982. He had alleged that a presidential aide had collected millions of dollars in bribe during the regime of President Umaru Yar’Adua and was sacked for it. He pleaded with Buhari to allow for an amicable resolution of the matter. 

Newsbreak recalls that the government is currently grappling with a court ruling which awarded an Irish company, Process and Industrial Development Limited (P&ID), over $9 billion over  breach of contract. 

About Ademola Aderele

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