Outrage trails FG $1.5bn for repair of P/Harcourt Refinery

Posted by News Express | 18 March 2021 | 711 times

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•Dr. Muda Yusuf

Outrage on Wednesday trailed the Federal Executive Council’s (FEC) approval of $1.5 billion for the rehabilitation of the Port Harcourt Refinery in River State. Analysts opined that the refinery was already redundant, saying the development is another misplaced priority. They told Daily Independent that the resources should have been invested in the country’s power sector and critical infrastructure which would have more value to the nation’s growth.

Dr. Muda Yusuf, Director- General of Lagos Chamber of Commerce and Industry (LCCI), was unenthusiastic about the Federal Government’s approval of $1.5 billion to put the Port Harcourt Refinery in good shape. He told Daily Independent that there are critical and competing sectors of the economy which would not appreciate the $1.5 billion better but also add commensurable value to the lives of Nigerians. According to him, sectors like power, security and railway would make meaningful use of $1.5 billion than rehabilitation of Port Harcourt refinery which had for years undergone turnaround maintenance without any impact on the nation. He added that the refinery should be sold to the private sector in their current state and allow same to bring the facility alive. He also wondered why the government is throwing such huge funds into the refinery when Alhaji Dangote is on the march to complete his 650,000bpd refinery that would fill the void created by the badly managed refineries in the country. Chief Martin Onovo, a petroleum engineer and onetime presidential aspirant on the platform of National Conscience Party, told Daily Independent that the funds approved for the rehabilitation of the refinery was too much and leaves Nigerians contemplating whether the government is building new refineries with $1.5 billion. Although, he said bringing back the refinery was in order, he doubted the integrity of Buhari’s administration to deliver the nation’s refineries from inherent ills. He mentioned that the current government is neck-deep in corruption and lacks the capacity to get the Port Harcourt refinery and others fixed. The Port Harcourt refinery, which is regarded as one of the largest in the country, is expected to be rehabilitated by Tecnimont SPA, an Italian firm. This follows the approval on Wednesday by the Federal Executive Council (FEC) at a meeting presided over by President Muhammadu Buhari. Minister of State for Petroleum, Timipre Sylva, broke the news to reporters, saying the rehabilitation would be done in three phases of 18, 24, and 44 months. He said the contract was awarded to an Italian company, Tecnimont SPA, a renowned firm in refinery maintenance. He said the funding had three components from the Nigerian National Petroleum Corporation (NNPC) internally generated revenue (IGR), budgetary allocations provisions and Afreximbank. Sylva, who addressed State House correspondents alongside his colleagues, Information and Culture, Lai Mohammed; Works and Housing, Babatunde Fashola; Health, Dr. Osagie Ehanire, and Budget and National Planning, Clement Agba, assured that local content was fully involved in the job. He said: “The Ministry of Petroleum Resources presented a memo on the rehabilitation of the Port Harcourt refinery for the sum of $1.5 billion, and it was approved by council today. “So, we are happy to announce that the rehabilitation of the productivity refinery will commence in three phases. “The first phase is to be completed in 18 months, which will take the refinery to a production of 90 percent of its nameplate capacity. “The second phase is to be completed in 24 months and the final stage will be completed in 44 months, and the contract was approved. “And I believe that this is good news for Nigeria.’ Speaking more on the contractor, the minister said: “The contractor that was approved by council today is Messrs. Tecnimont SPA of Italy. “It’s an Italian EPC company that won the bid and that was approved by council.” On the question of operations and maintenance, Sylva said: “That has been a big problem for our refineries, as we all know, that was also exhaustively discussed in council and the agreement is that we are going to put a professional operations and maintenance company to manage the refinery when it has been rehabilitated. “In any case, it is actually one of the conditions presented by the lenders because the lenders say they can only give us the money if we have a professional operations and maintenance company, and that already is embedded in our discussions with the lenders and we cannot go back on that.” On whether the funds for the rehabilitation of the refinery were available, the minister said: “I want to answer that the funds are all in place and work will commence forthwith.” On when the other refineries in the country would be rehabilitated, he said: “Discussions are ongoing. We want to take one at a time and I want to assure you that before the lifetime of this administration expires, work on all the refineries will have at least commenced.”

On why the government did not go back to the original builders of the refinery, Sylva said: “The first action was to go to the original refinery builders, but you all know, like I do, that if you have a Toyota car, and your Toyota car develops problem, you don’t have to go to the builders of the Toyota to fix it.

“So, we found out from the original refinery builders that they are not in the business of rehabilitating refineries, they are in the business of building refineries. “So, they actually pointed us to a rehabilitation company that we’re dealing with now.”

Asked who the lenders of the funds were, the minister said: “There are various components to the funding: there is funding from NNPC internally generated revenue, there is funding from the budget and there is also debt funding.

“For the lenders, we are dealing with AFREXIM bank and they are very committed to us, we have actually concluded discussions with AFREXIM.” On the issue of local participation in the rehabilitation of the refinery, Sylva said: “As you know, there is a local content law.

“The Nigerian Content Development and Monitoring Board (NCDMB) is fully part of the contracting process and has safeguarded the interest, adequately, of our local contractors; so, our local people will be fully involved with the Tecnimont SPA.”

On whether the rehabilitation of the refinery was as a result of labour unions’ demand that deregulation of petroleum price should come after refineries rehabilitation, he said: “First, I am not aware of any such agreement that deregulation should only take place after the refineries had been fixed – that was at no time part of our agreement.

“But, of course, this government, from the very beginning, has been in the process of fixing and rehabilitating this refinery; so, it is not because of our discussion with labour, but it is actually the desire of the administration to ensure that our refineries work and that is the process that has borne fruit today.”

 Ehanire said council approved N3.070 billion for six contracts for the purchase of various laboratory equipment by the Nigeria Centre for Disease Control (NCDC) across the country. He said: “The Ministry of Health presented a memo on behalf of the NCDC public health laboratory specialist and Centre for Disease Control.

“It is for six contracts for laboratory equipment and to the total worth of N3, 070,892,988 for various equipment and supply, to strengthen the work of the NCDC in various parts of the country, to be more ready for the work they do in diagnostics preparedness, not only for COVID-19 but also for any other disease outbreak of public interest in the future.”

Fashola, on his part, said Council approved the revised estimated total cost of the Enugu-Onitsha Highway, which is N8.649 billion.

The 22-kilometre section of the 100 kilometre road is being handled by Niger Construction in order to expedite conclusion of works. (Daily INDEPENDENT)


Source: News Express

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