Former President Olusegun Obasanjo has issued a challenge to former Minister of Power and Steel, Mr. Olu Agunloye, urging him to clarify the source of his authority in awarding a $6 billion contract to Sunrise Power and Transmission Ltd for the Mambilla Hydropower Project back in 2003. This challenge comes amidst an ongoing arbitration between Sunrise Power and the Nigerian government at the International Chamber of Commerce (ICC) in Paris, France, concerning an alleged contract breach by the federal government.
In the first arbitration case, Sunrise Power is seeking compensation of $2.3 billion, asserting that it expended significant funds on financial and legal consultants before the contract was terminated. In a separate arbitration, the company is pursuing a $400 million settlement based on the terms of an agreement reached with the federal government in 2020 to resolve the dispute.
Nigeria is resisting these claims, citing suspicions about the legality of Agunloye’s decision to award the contract just one week before the conclusion of his tenure as the Minister of Power in 2003. Investigations into the Sunrise affair have led to the questioning of Agunloye and certain officials from the Ministry of Justice, and they may potentially face legal action.
During an interview with TheCable over the weekend, Obasanjo emphatically denied granting authorization to Agunloye to commit Nigeria to the $6 billion “build, operate, and transfer” contract. He asserted that during his presidency, no minister possessed the authority to approve projects exceeding N25 million without direct presidential consent. Obasanjo questioned Agunloye’s basis for such a commitment and challenged him to elucidate the origins of his power and authority in this matter.
In his words: “When I was president, no minister had the power to approve more than N25 million without express presidential consent. It was impossible for Agunloye to commit my government to a $6 billion project without my permission, and I did not give him any permission.” The former president challenged Agunloye to explain where he got the power and authority.
“If a commission of inquiry is set up today to investigate the matter, I am ready to testify. I do not even need to testify because all the records are there. I never approved it.
“When he presented his memo to the federal executive council (on May 21, 2003), I was surprised because he had previously discussed it with me, and I had told him to jettison the idea, that I had other ideas on how the power sector would be restructured and funded.
“I told him as much at the council meeting and directed him to step down the memo. I find it surprising that Agunloye is now claiming he acted on behalf of Nigeria. If I knew he had issued such a letter to Sunrise, I would have sacked him as minister during my second term. He would not have spent a day longer in office.”
“I would have jailed him if he was in the country because of the things I knew about him. After I left the office, he returned, and I saw him. I told him that he was lucky I was no longer president. Otherwise, I would have jailed him.
On October 10, 2017, Sunrise initiated arbitration proceedings against Nigeria, alleging a “breach of contract” regarding the construction of the 3,050MW Mambilla power plant in Taraba state.
Nigerian authorities maintain that the contract award was irregular and did not adhere to the proper due process.
Following a reported directive from the federal cabinet to withdraw his request for approval and explore alternative sources of funding for the project, Agunloye issued a letter awarding the contract just one day later.
In his communication with Sunrise, Agunloye also outlined specific conditions that needed to be met for the contract to be finalized, none of which were fulfilled by the company.
However, Sunrise took legal action in response to the announcement of a bidding process for the civil works by the federal government in 2007, leading to a series of legal disputes that have since delayed the project.
In an attempt to move the project forward, the federal government sought to resolve the arbitration in 2020 by offering compensation of $200 million. However, it is believed that a lack of funds hindered the settlement.