Mambilla Hydropower Project Saga: Ex-minister accuses Obasanjo of distortion of facts

A former Minister of Power and Steel, Olu Agunloye, has accused former President Olusegun Obasanjo of distortion of facts over the stalled multi-billion-dollar Mambilla Hydropower Project.

The project, first awarded in 2003 to Sunrise Power and Transmission Limited by the Obasanjo administration, is the subject of decades of a legal dispute that is now under international arbitration between the company and the Nigerian government.

In an interview with TheCable newspaper recently, Mr Obasanjo said Mr Agunloye fraudulently awarded the contract for the project without the approval of the Federal Executive Council.

But in a statement he issued on Sunday, Mr Agunloye rejected the former president’s accounts on the project, alleging that he was being set up as a scapegoat by the Nigerian government to escape sanction for abandoning contractual agreements on the project.

According to Mr Agunloye, the contract for the project was duly awarded in 2003 by the Obasanjo administration on a Build, Operate and Transfer basis to deliver Nigeria’s biggest power plant with a 3,050 megawatts capacity at no cost to the Nigerian government.

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The project was expected to significantly boost electricity to address the shortage of energy in the country.

However, Mr Agunloye said after his exit from government as a minister in 2003, Mr Obasanjo changed his mind about the terms of the contract and decided that the Nigerian government should directly fund the project.

The project was, however, terminated in 2008 by President Umaru Musa Yar’Adua, who succeeded Mr Obasanjo.

Mr Agunloye said the termination was due to alleged corruption on the part of officials who served under Mr Obasanjo between 2003 and 2007.

The company thus dragged the Nigerian government before an international arbitration court where it is claiming that the termination of the contract was illegal.

an interview with Mr Obasanjo the project was put at $6 billion.

The former president, in distancing himself from the mess that the project has become, claimed that he was not aware that the contract was awarded by his then-minister, Mr Agunloye.

Alledging fraud in the contract award, Mr Obasanjo insisted that no minister under his watch could have signed a contract of such magnitude without his approval.

He added that no minister in his administration had the power to award a contract beyond N25 million.

But in his reply on Sunday, Mr Agunloye dismissed Mr Obasanjo’s claim, saying the ex-president awarded the contract.

“The former president was not correct when he referred to the award to Sunrise simply as a $6 billion contract (that is, N800 billion in 2003) under his watch. In truth, it was a Build, Operate and Transfer (BOT) contract in which the FGN did not need to pay any amount to the contractor, Messrs Sunrise Power and Transmission Company Limited (Sunrise).

“As a matter of fact, Sunrise has not been paid a single Naira or Dollar by the FGN from 2000 till date (14/9/23). Sunrise was to source for funds and execute the project with own funds. The investment of Sunrise to construct the Mambilla hydroelectric project up to the completion stage to deliver electricity was adjudged at a maximum of $6 billion by four Ministers of Power and the former president (Chief Obasanjo) before I became Minister of Power. Sunrise was to recoup its investment from the sale of the generated electricity over a 30- to 40-year period at pre-determined tariffs, also agreed with FGN before May 2003.”

Mr Agunloye stated that in 2003, Mr Obasanjo changed his mind and decided to award the contract, “by paying from government own funds.

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“The former President decided, therefore, to break the Mambilla Hydropower Project into smaller components, like civil engineering works, hydraulic works, structural works etc. with the intention to award them as separate multiple contracts as Government procurements, on cash and carry basis, for which Nigerian Government would pay mobilisation fees and make other payments in stages to contractors.

“ When one of the contractors, which got a component of the Mambilla project awarded by President Obasanjo as $1.46 billion procurement contract, presented its request for a $400 million mobilisation fees, President Yar’Adua scrutinised the contract and cancelled it in 2008 because of proven corruption on the part of officials who served under President Obasanjo between 2003 to 2007.”