Senate Halts Consessioning Of Port Harcourt Refinery, Probes $15Billion Contract

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By Sadiq Umar – The Senate has set up a 7-man ad-hoc committee to probe the alleged questionable concession of the Port Harcourt Refinery to AGIP and OANDO oil firms.

The concession was carried out by the Ministry of Petroleum Resources on contractual term of $15billion.

The Senate has directed that transactions be stopped forthwith pending the outcome of the investigation, insisting that the probe would reveal how and why such a deal was sealed.

The 7- man ad-hoc committee saddled with the probe of the concessioning is headed by Senator Abubakar Kyari ( APC Borno North) .

Senators Dino Melaye, Duro Faseyi, Sabo Mohammed, Aliyu Wammako, Mathew Urhoghide and Benjamin Uwajumogu are to serve as members of the committee.

It had mandated the panel to look into the criteria used to select Agip/ENI and Oando Plc to maintain and operate the Port Harcourt Refinery, and at what cost and timeframe.

The Senate took this action after adopting a a motion titled, “Non-transparent transactions relating to the planned concession of the Port Harcourt Refinery to Agip and Oando by the Ministry of Petroleum Resources”.

The motion was sponsored by Senator Sabo Mohammed (APC Jigawa South)

Leading debate on the motion, Mohammed said the Senate was worried about the alleged non-transparent transactions, explaiing that the federal government recently entered into agreement with NAOC to construct the refinery, a deal which also includes investment by Agip in a power plant with the Italian company assisting Nigeria in the repair of the Port Harcourt Refinery..

He said the major stakeholder like the Bureau of Public Enterprises, (BPE) empowered by law to conduct such exercise and the labour unions were not aware of the deal that is supposed to be signed officially by July this year.

The Senator stressed, “the Minister of State for Petroleum Resources stated that the agreement was part of a broader federal government plan to increase capacity for local production and consumption of petroleum products with the aim of ending fuel importation in Nigeria”

According to him, “while the resolve by the federal government to increase local refining capacity is laudable and should be applauded by all Nigerians, the observance of corporate governance principles and the country’s extant laws must be followed to the letter”.

“It is not yet clear if the new arrangement is a concession agreement or an agreement to build a new refinery, the confusion became obvious following the disclosure on May 11, 2017 by the Chief Executive Officer of Oando Plc on the floor of the Nigeria Stock Exchange that the group had received approval of federal government to repair, operate and maintain the Port Harcourt Refinery Company with their partner, Agip”, he added.

He said the deal on concessioning was positive since it would mean an end to importation of refined products by the year 2020, yet he expressed concern that the concessioning “without recourse to due process is illegal and a clear attempt at ridiculing Nigerians.

According to him, the concessioning would definitely create a big hole that would be hard to fill in the anti-corruption crusade of the present administration”.

He stressed, “in such transactions, the best practice is to select partners through open and competitive bids, that is, prepare the business for sale, market the business, buyers’ selection and close the transaction”.

“Any exclusive that does not follow the above procedure hatched in the dark without the knowledge and participation of relevant stakeholders tend to lead to sub-optimal outcomes for the seller (in this case the federal government)”.

He recalled that the then Group Managing Director of the Nigeria National Petroleum Corporation, NNPC, Mr. Ibe Kachikwu had declared that by the end of 2015, the Port Harcourt, Warri and Kaduna Refineries would be working at 90 per cent, thus reducing importation and the subsidy controversies, but wondered that up till now in 2017, the refineries are yet to be fixed and could not even produce at 50 per cent.

In his contribution, Senator Dino Melaye (APC Kogi West), urged the Senate “to rise and stop another massive corruption that is about to take place in the refinery just as it happened in the power sector when electricity was sold to the private sector without any result till date”.

Melaye, reminded his colleagues how the electricity in Nigeria was fraudulently sold to the Distribution Companies, DISCOs, noting that the concessioning of the Lagos-Ibadan Expressway, Delta Steel in Aladja, Delta State were also fraudulently contrived so similarly, a reason the project failed.

He warned that the concessioning of Port Harcourt Refinery must not be allowed to take place without due process.

In the same vein, Senator Kabiru Gaya (APC Kano South), condemned the federal government planned action on the refinery, and advised that “it is better to build new refineries than planning to take away the Port Harcourt Refinery like it did to Warri and Kaduna that have not been functioning for years”.

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