N100m concession agreement: Malami moves to avert another debacle

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N100m concession agreement: Malami moves to avert another debacle

Attorney General and Minister of Justice, Mr Abubakar Malami (SAN), has advised against a summary termination of the $100 million concession agreement between Transmission Company of Nigeria (TCN) and Phase3 Telecom Ltd AND Alheri Engineering Services by the former.

In a piece of legal advice to TCN, Malami described the action of TCN as “illegal ad nullity.”

Phase 3 Telecom had written to the minister, complaining about the development and asking his opinion about the summary termination of the concession agreement contract facilitated by Federal Government had on March 20, 2006, that mandated the concessionaire to design, build, finance and operate (DBFO) fibre optic network infrastructure in the country.

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Arising from the need to review the concession terms as envisaged in the agreement, following the liberalisation of the National Long-distance Fibre Optic landscape in Nigeria, TCN reneged reports by an audit firm and recommendation of the Infrastructure Concession Regulatory Commission (ICRC).

In a letter addressed to the then Minister of Power, Works and Housing, ad dated January 10, 2018, with reference number: LE14/TCN/02.

The Minister of Justice condemned the purported termination of the concession agreement by TCN advised that based on reports of ICRC and Audit Report by a firm – SIAO – the terms of contracts be reviewed.

The termination, according to the AGF, “was arbitrary, premature, illegal, null and void, having been issued in violation of the terms of Agreement which mandates under Article 31:1 that Parties shall go to arbitration panel where disputes cannot be resolved amicably.”

According to the AGF: “Several meetings were held at the instance of ICRC, with Concessionaires and TCN in attendance.

When the dispute could not be amicably resolved, it was agreed by (ICRC, TCN, and Concessionaire) to jointly engage an auditor to review the issues in dispute and make recommendations to bind and guide the parties going forward.

Consequently, an audit firm –SIAO- was appointed to carry out financial and technical audits of the situation.
In summary, SIAO found that the Agreement and financial obligations thereunder are not sustainable in line with present realities in the industry.”

Findings by SIAO, according to Malami’s opinion on the report submitted by ICRC: “TCN failed to give effect to the findings of SIAO and every attempt by the Concessionaires to meet with TCN towards resolving the dispute was to no avail.

It is important to note that a dispute resolution meeting was held on 18th August 2017 where TCN inter alia requested for Concessionaire’s proposal for restructuring which was submitted by Concessionaires on 24th August 2017.

Unfortunately, however, rather than respond to the restructuring proposal one way or the other for further engagement with a view to resolving the dispute or refer same for arbitration as agreed by the Parties under the Agreement, TCN via a letter dated 30th August 2017 terminated the Agreement.

N100m concession agreement: Malami moves to avert another debacle
Tribune Online