FEW hours after it was announced with fanfare, the N70 billion agriculture deal between the Kwara State government and a Spanish consortium is generating controversy.

An opposition party, the Action Congress of Nigeria (ACN) claims that the project is a monumental fraud and that the purported consortium is not a registered company in Spain.

The state government however denies the allegations, disclosing that it exercised due diligence, both in Nigeria and in Spain, in the process of selecting the consortium and other ancillary activities.

The tripartite agreement to begin large scale production of rice in the northern part of the state  involves the government, a Spanish firm, Vasolar Consortium and a Nigerian bank.

While the Vasolar Consortium will provide the 70 million Euros annually over four years, the state government will provide 500, 000 hectares of arable land along the settlements of River Niger while the Nigerian bank will provide the needed requirements on the side of the government in a joint venture with the foreign company.

But a statement by the ACN's state chairman, Mr. Kayode Olawepo claimed the project is shrouded in mystery and is a fraud. 

The opposition party said: "We are again raising the alarm over what is clearly another attempt to commit public fund and property to yet another questionable project. Last Thursday, the PDP government signed an MOU with one Vasolar Consortium of Spain for the cultivation, processing and packaging of rice in commercial scale in the state.

"Under the agreement, according to media reports, the Consortium will provide a total capital of N70 billion over a period of four years while the State Government is expected to provide about Seven Million Euros and 20,000 hectares of land to kick-start the project.

"We deem the whole arrangement a monumental fraud. For one, our research since the Thursday event reveals that no company exists under the name Vasolar Consortium whether in Spain or anywhere in the world! Assuming without conceding that such a company exists in Spain, how come it is not listed or registered with the Spanish equivalent of our own Corporate Affairs Commission? Does that not raise the question of credibility which is sine qua non in any business deal?

"Again, since the whole project is tagged a N70b venture and the Vasolar Consortium is to provide this fund over a period of four years, why must Kwara Government commit another seven million Euros of taxpayers' fund to the same venture it is certain to convert to a private venture? If, as it is clear from the above, that Vasolar Consortium is a nonexistent company, why give out 20,000 hectares of fertile land belonging to our people? This fraud must not stand. We urge the people of Kwara State to resist by all means legal this fraudulent arrangement under the guise of commercial farming. Enough is enough!"

But, the Senior Special Assistant to the governor, Dr. Muyideen Akorede, in a statement entitled: "How we clinched N70b Rice deal", said that contrary to the opposition party's claims, there was no fraud or illegitimacy in the project.

His words: "The Kwara State government received a letter of intent from the Spanish investors in October 2011, seeking to partner with the state government to set up a rice cultivation, processing and packaging project in the state following a recommendation by the Spanish Embassy in Nigeria. Considering that the company is undertaking similar ventures in other parts of Africa under Project Africa Rice and in line with the government's policy of encouraging foreign direct investment, officials were subsequently dispatched to Spain to open discussions with the company.

"The delegation was also directed to conduct vigorous checks on Valsolar's legal status as well as assess its capacity to invest the needed funds in the project. These checks included original copies of Valsolar's certificate of incorporation, the articles and memorandum of association which were sighted and duly notarised copies obtained for the state government's record. Government also has duly notarised and authorised English translations of these documents which indicate that Valsolar was registered on July 7, 2006 with registration No. B06479802 in Extre Madura Region of Spain. The state government also has a duly authenticated resolution by Valsolar's board authorising the company to invest in Kwara State. All the documents have been authenticated by the Embassy of Spain in Nigeria where they are available for verification.

"At the same time, Valsolar conducted a satellite survey of the state's topography to determine the suitability of the soil. Following this, the company visited the state to conduct due diligence which included the state's Fitch Rating after which it consented to signing the MoU. 

Furthermore, the proposed Joint Venture Company, Valsolar-Kwara Company Limited, has been approved and reserved by the CAC which could only have been achieved based on the presentation of all relevant documents concerning Valsolar Consultoria 2006 SL.

"Under the terms of the MoU, government's seven million Euro investment which is ten per cent of Valsolar's annual investment has been held in an escrow account as show of its commitment to the project and which can either be withdrawn or reinvested in the project at the end of the four year investment period."

Akorede emphasised that the Rice Project will generate 12,000 jobs over the value chain, stimulate economic development as well as ensure the development of the agriculture in the state through transfer of technology and training of farmers. 

He said that the scale of the project and the value of Valsolar's investment indicate its confidence in Kwara State's growing reputation as a prime investment destination.