Gov. Okowa Needs Another N20 Billion To Complete Controversial IPP Plant, Refuses To Redeem DavNotch’s N8 Billion Debt

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…….IPP Project, Subject Of Legal Action As DavNotch Used Arbitration To Stop Sale

Governor of Delta state, Mr. Ifeanyi Okowa said he will need another N20 billion to complete the controversial multi-billion naira Independent Power Plant (IPP) project in Oghara, headquarters of Ethiope West local government of the state.

Okowa who stated this Wednesday during his state wide town hall meeting (campaigns) with the people of Ethiope West and Sapele local government areas held at Oghara and Sapele respectively, disclosed that adequate power supply was required to boost the socio-economic life of the people.

According to the Governor, with the economic realities of the country, it would be difficult for the state to solely sponsor the IPP project adding that “We have to study the project, if I tell you that it will be functional during my administration, I will be telling you lies, a lot have been done, but, we have done the calculation but, it is obvious that we cannot execute the project as a state for now because, the project will gulp over N200 billion.

“There are two options, either we enter into private partnership with the private sector or to outrightly, sell the IPP to the private sector so that it can make the project functional, so as to create jobs for our people and other benefits derivable. We will continue to do the best we can even with the challenging times and we will continue to remain focused,” the Governor said.

At Sapele, Okowa commended Deltans for their peaceful ways of resolving issues, observing that the protest by the people of Sapele against epileptic power supply was peaceful and listed some of the projects executed by his administration in the area to include construction of roads, schools, markets among others.

The Governor however expressed joy that since his coming on board two years ago, the Songhai Delta has been functional as training ground for the training of youths in different fields of life, especially agriculture.

“I can rightfully claim that I am from Okpe and Saoele local government, I want to thank you for coming out in your large numbers to attend this town hall meeting which will provide the opportunity to tell you what we are doing and the prospect we have for the future and also, listen to you to enable us add your needs in our budget; we are encouraging participatory democracy which I think we should have.

“I was happy with what I saw at the Songhai Training centre; in the past two years, that centre has been very active and yesterday, I saw a new system of farming, not new to the world but, new to us, the drip irrigation which is the first in our state; it will help to grow tomatoes, cucumbers and other vegetables and with the drip irrigation system, tomatoes will be grown at least three cycles in one year.”

“So many of our youths have been engaged already in our empowerment programmes and we are happy that our youths are also acquiring new skills through the revamped technical colleges in the state.”, assuring that the Sapele market and other project’s would come on stream in the cause of the year.

Meanwhile, all necessary plans to institute legal action against Delta State Governor Ifeanyi Okowa are said to have been concluded, as the contracting firm handling the controversial multi-billion naira Independent Power Plant (IPP) project, DavNotch Nigeria Limited, is currently still battling the governor over a debt of N8 billion being owed to it and to stop the proposed sale of the project.

The IPP project was awarded in 2011 by the former administration of Emmanuel Uduaghan to DavNotch Nigeria Limited, a firm owned by the former speaker of the Delta State House of Assembly, Victor Ochei. The project has been engulfed in a series of controversies rising from accusations and counter-accusations bordering on corruption.

HardReporters correspondent reliably gathered that the IPP contractual agreement reached between the Delta State government and DavNotch Nigeria Ltd was for the supply and installation of 2 Nos. Rolls Royce Trent Gas Turbine Generators for the Delta State IIPP at Oghereki in Ethiope West local government area (LGA) of Delta State, which has cost over N20 billion.

Our correspondent recalled that a few months ago during a press conference, Mr. Okowa had confirmed to journalists that the 2 Nos. Rolls Royce Trent Gas Turbine Generators for the Delta State IPP had already be supplied but yet to be installed due to some financial challenges that were being faced by the State. He added that as a result, the State government would have no option other than to put the project for sale to prospective buyers within the country and South Africa.

SaharaReporters had reported that following the sale pronouncement of the project by the governor, tempers rose, thereby forcing DavNotch to have vowed to do everything legally possible within its powers to stop the sale of the project and have its N8 billion owed to it by the State government paid.

As a first step to start its legal battle with the State governor, our correspondent learnt that DavNotch, through its solicitor, Norbert Osodi, had served Mr. Okowa, Energy Commissioner Newword Safugha, and Attorney-General, Peter Mrakpor, a notice of arbitration to stop the sale and recover its outstanding unpaid balance of N8 billion from the State government.

A copy of the notice of arbitration obtained by SaharaReporters reads in part as follows:

“Arising from your breach of clauses 3a and 12a of the IPP agreement dated the 22nd day of March, 2011, coupled with your subsequent plans to sell and dispose of the IPP without recourse to us and in furtherance to your consequential failure to make yourself available to amicably resolve the lingering payment default of the sum N3,374,572,295 (three billion, three hundred and seventy four million, five hundred and seventy two thousand, two hundred and ninety five naira) as original contract balance part of which valuation/advance payment recovery certificate No. 4 dated the 3rd day of July, 2014 was raised.

“And the sum of N4,739,691,987 (four billion, seven hundred and thirty nine million, six hundred and ninety one thousand, nine hundred and eighty seven naira) being variation cost of the contract as listed in the variation request, we hereby demand that the dispute be referred to arbitration and finally settled in accordance with the arbitration and conciliation act, laws of the federal republic of Nigeria as stipulated in clause 11 of the said IPP agreement dated 22/3/2011.”

The claimant claims in the arbitration against the respondents jointly and severally as follows: 

“Stoppage of the proposed sale of the IPP by Delta State Government/Respondents and/or anyone acting on her instructions/behalf to anyone however whatever, pending the satisfaction of the claimant’s demands.

“Total sum of N8, 114, 264, 282 (Eight billion, one hundred and fourteen million, two hundred and sixty four thousand, two hundred and eighty two naira) arising from lingering payment default of the sum of N3,374,572,295 (three billion, three hundred and seventy four million, five hundred and seventy two thousand, two hundred and ninety five naira) as original contract balance part of which valuation of work/advance payment recovery certificate No. 4 dated the 3rd day of July, 2014 was raised, and the sum of N4,739,691,987 (four billion, seven hundred and thirty nine million, six hundred and ninety one thousand, nine hundred and eighty seven naira) being variation cost of the contract as listed in the variation request.”

According to the claimant, the clause 3a of the aforementioned agreement reads thus: “The contract sum shall be paid to the contractor upon work evaluation and certification by the employer provided that 10% of the value of work done but not exceeding five percent (5%) of the contract price shall be retained as retention fee until the expiration of the defects liability period if twelve (12) months which shall be computed from the date of completion of works.”

The claimant therefore sought the following as reliefs in the arbitration:

“A Declaration that failure of the Delta State government/respondents to pay the claimant the total sum of N8, 114, 264, 282, arising from lingering payment default of the sum of N3, 374, 572, 295 as original contract balance part of which valuation of work/advance payment recovery certificate No. 4 dated the 3rd day of July, 2014 was raises, and the sum of N4, 739, 691, 987, being variation cost of the contract as listed in the variation request, is a breach of clause 3a of the IPP Agreement dated the 22nd of March, 2011 as well as a breach on extant provisions of the said contract.

“A Declaration that the surreptitious plans of the respondents to sell the said IPP plant without recourse to the claimant and without factoring the claimant’s outstanding payments and consequential loses is a breach of clause 3a and clause 12d of the said IPP agreement dated the 22nd day of March, 2011.

“A Mandatory Order directing the Delta State government/respondents to immediately pay to the claimant the sum of N8, 114, 264, 282, arising from lingering payment default of the sum of N3, 374, 572, 295, as original contract balance part of which valuation of work/advance payment recovery certificate No. 4 dated the 3rd day of July, 2014 was raised, and the sum of N4, 739, 691, 987, being variation cost of the contract as listed in the variation request in compliance with clause 3a of the IPP Agreement dated the 22nd of March, 2011 and extant provisions of the said contract.

“A Mandatory Order directing the Delta State government/respondents, their agents, servants and/or privies, to stop forthwith and desist from selling the said IPP to anyone howsoever and whatsoever without first settling the claimant’s the total sum of N8, 114, 264, 282, arising from lingering payment default of the sum of N3, 374, 572, 295, as original contract balance part of which valuation of work/advance payment recovery certificate No. 4 dated the 3rd day of July, 2014 was raised, and the sum of N4, 739, 691, 987, being variation cost of the contract as listed in the variation request in compliance with clause 3a of the IPP Agreement dated the 22nd of March, 2011 and extant provisions of the said contract.

“A Mandatory Order directing the Delta State government/respondents, their agents, servants and/or privies, to stop forthwith and desist from selling the said IPP to anyone howsoever and whatsoever, if the said sale is to be done without recourse to the claimant and without recourse to clause 12d of the IPP agreement.

“An Order directing the respondents to bear the cost of the arbitration including claimant’s arbitration and solicitor’s cost and for such further orders.”

In compliance of the said IPP agreement, DavNotch Nigeria Ltd had chosen and appointed Albert Akpomudje (SAN) as its arbitrator with a warning that should the respondents fail to appoint their arbitrator within 30 days, the claimant shall seek the leave of court to have one arbitrator appointed for the respondents.

As at the time of filing in this report, it was gathered that governor Okowa and the state commissioner for Justice and Attorney-General, Mr. Peter Mrakpor have been pressuring DavNotch to drop all planned legal action against the current administration and come together in a round table for a dialogue.

With Agency Report.

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