Moses Oba
The Senate is in search of a legal escape route to save the Federal Government from a liability of $1.2 billion if it decides to pull out of the Azura- IPP and ACU Gas Supply contracts it entered into in 2016.
The Agreement was signed by the Federal Government Presidential Power Reform Transaction Committee Chaired by Vice President, Yemi Osinbajo, with Babatunde Raji Fashola as Minister of Works, Power and Housing and Abubakar Malami as the Attorney General and Minister of Justice.
In the deal, Nigeria could be liable to
about $1.2 billion if it pulled out with the fine withdrawn from its foreign reserve without recourse to the country.
The contracts contain other cut-throat clauses that make it extremely difficult for Nigeria to pull out of the arrangements.
For instance, Nigeria loses roughly $30 million monthly to Azura-IPP for gas generated as the contract makes it mandatory for Nigeria to pay the sum whether or not the power generated is despatched or transmitted through the national grid by the Transmission Company of Nigeria, (TCN)
Meanwhile, the Transmission Company of Nigeria(TCN) that is expected to take delivery of the gas supply from Azura- IPP and ACU Gas is yet to sufficiently build the capacity required.
The consequence now stares Nigeria in the face and it is in form of huge revenue loss on monthly basis.
The Senate is concerned about the contracts agreements and seeks legal escape route out of the tight corner Nigeria seems to have found itself.
In his contribution, Senator Bashiru Ajibola who incidentally is a lawyer believed Nigeria can pull out of the contracts.
He however advised the Senate to seek international legal expert opinions on the matter.
Ajibola said Nigeria should not be afraid of seeking legal means out of the “bad deal”, especially when the partners have also not sufficiently fulfilled their own part of the contracts.
A few other lawmakers in the house, agreed that Nigeria should seek legal means to buy its way out of the situation as Senate calls for details of all the gas contracts.
All of these was as the Chairman, Senate Committee on Power, Gabriel Suswam submitted his committee report on a “Roundtable discussion aimed at addressing Nigeria’s Power Problem”.
Suswam said while Nigeria can seek for legal means to buy itself out of the contracts; he warned that the Federal Government could lose a whopping $1.2 billion from the country’s foreign reserve if it pulled out.
The lawmaker from Benue confirmed that Nigeria practically went into the deal from the very beginning short of having its two eyes closed with wrong set of parameters.
Troubled by this situation, the Senate President, Ahmad Lawan called for a review of all the contracts with a view to finding an escape route for Nigeria.
According to Lawan, there was no way Nigeria will ever enjoy steady power supply with these kind of arrangement.
He therefore asked that the contracts should be brought in for the Senate to take a second look at them.
The Senate subsequently adopted the recommendations contained in the Suswam-led committee report which called for a review of the current tarrif structure as well as improved metering or billing system.
