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Reps Uncover Extra-Budgetary Expenditures Of $50m, $18m As PH Refinery Gets March 2023 Completion Date

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Authorities of the Nigerian National Petroleum Corporation (NNPC) on Friday assured Nigerians of its resolve to complete the ongoing rehabilitation of the Port Harcourt Refinery by March 2023.

The NNPC Group Managing Director, Mele Kyari gave the assurance during the resumed investigative hearing into the state of the refineries in the country, held by the House of Ad-hoc Committee chaired by Hon. Ganiyu Johnson.

According to him, the contract which kick-started on the 6th May, 2021 has attained 30% completion level overall, with the target of March 2023 while part of it would be delivered within 32 month and the entire project is expected to be completed within 42 months.

He however maintained that the contracts for the rehabilitation of Warri and Kaduna Refineries have not been awarded, thereby debunking the fake news.

Kyari who was represented by the General Manager, Refineries & Petrochemicals, Mustapha Yakubu affirmed that the contract for the survey of the refineries followed due process.

However, there was a drama over the cost of a new 150,000 barrels per day refinery.

While responding to a series of questions on the rehabilitation contract, the representative of Sapien Engineering Company which got the contract of $135 million for the comprehensive technical survey of Port Harcourt Refinery, added that an additional sum of €2.3 million was approved for the inspection of both Warri and Kaduna Refineries.

To this end, the Committee requested for FEC approval of the $1.5 billion for Port Harcourt Refinery, approval of various expenditures incurred on the 26th July, 2017 worth $5.321 million for comprehensive technical plants, as well as another $55 million paid on the same day.

The lawmakers however expressed dismay over the response of the Sapien representative who expressed ignorance over the subject matter.

After perusing the documents submitted by NNPC to the Committee, the lawmakers also observed that similar contracts for the three refineries were awarded to another company (Technomont) in 2019.

While the NNPC Group Managing Director who spoke through the Managing Director of Port Harcourt Refinery, Ahmed Dikko disclosed that full conversion plant will cost $4.5 billion and completed within five years, the lawmakers however observed that the project would cost $90 million in America.

According to him, Sapien handling the contract for the $1.5 billion rehabilitation contract issued $300 million bond guarantee, a development which the lawmakers queried, hence requested for relevant documents.

The representatives of the NNPC helmsman affirmed that the contract was awarded to an Italian company – (Technomont) at the sum of $1,299,598 and completed the procurement as lump sum contract, in addition to the sum of $99 million VAT and $162 million for other works.

The lawmakers also alleged that the contract was awarded to Sapien without further due diligence adding that the contract was not subjected to competitive bidding.

He however noted that the Kaduna Refinery cannot receive crude oil as a result of the damaged petroleum pipelines spanning 610 kilometers from Warri, Delta State.

When asked to give details of the actual amount spent on Turn Around Maintenance (TAM) on the refineries over the past 10 years, the NNPC representatives could not give precise amount spent.

He stated that the last Turn Around Maintenance on Port Harcourt Refinery was done in 2000, adding that up till 2018 the Refinery was not operating optimally hence shutdown deliberately for the purpose of the ongoing rehabilitation.

When asked about the value of the Port Harcourt Refinery, the NNPC Group Managing Director said: “I cannot say exactly but it’s in billions.”

To this end, the Committee resolved to summon the contractor handling the Port Harcourt Refinery rehabilitation for the purpose of fair hearing.

The lawmakers also directed NNPC Management to recourse back to the Committee before awarding the contract for the rehabilitation of Warri and Kaduna, since the pipelines are in bad shape.

Worried by the huge public funds expenses on the refineries for several years without commensurate results, Hon. Isiaka Ibrahim who presided over the session in an acting capacity, proposed that the refineries should be turned to workshops.

On his part, Hon. Dachung Bagos queried the rationale behind the £2.3 million expended on survey of Kaduna and Warri Refineries when the pipelines are in bad shape.

In his submission, Hon. Johnson Oghuma recommended that both Kaduna and Warri Refineries should be scrapped with a view to save the nation because they are drain pipes.

The lawmakers also queried the sum of $18 million expended by NNPC as well as an additional sum of $50 million above the approval limits, alleging that such development amounted to contract splitting.

To this end, the Committee demanded details of the $18 million expenditure, $50 million expended on the same day as well $1.5 billion approved for the Port Harcourt Refinery.

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