The rehabilitation of the Port Harcourt, Warri and Kaduna refineries gulped N11.35 trillion in 13 years, beginning from 2010 to date.
This is contained in a report of the House of Representatives ad-hoc committee on the state of refineries in the country and the need to ascertain the actual daily consumption of petrol in Nigeria.
The report of the committee chaired by Ganiyu Abiodun Johnson (APC, Lagos) was slated for consideration by the House but it was stepped down for further legislative action.
This was as Ahmed Idris-Wase, the deputy speaker and chairman of the committee of the whole directed the ad-hoc committee to come up with its list of recommendations that should form a template to deal with specific issues the committee was set up to achieve.
According to the yet-to-be-considered report, the three refineries became unproductive from 2010 making a range of losses; with Port Harcourt put at 7.6 percent losses, amounting to N132.52 billion from 2012; Warri at 6 percent losses, translating to N111.37 billion from 2014; and Kaduna, 10 percent, equal to N122.62 billion from 2014.
The report stated that from 2010 to 2019, the refineries were performing sub-optimally with an annual combined capacity of less than 30 percent and in 2019. The NNPC obtained executive approval and shut down the refineries for comprehensive rehabilitation to restore the plants to a maximum of 90 percent utilisation.
The report indicated that the total losses from the non-functional refineries since year 2010 was N366.52 billion and the total cost of operations and running them from 2010 to 2020 stood at N4.80 trillion.
“The Port Harcourt Refinery Company carried out rehabilitation projects over a period of seven years, from 2013 to 2019 valued at about N12,161,237,811.61 only.
“The Warri Refinery and Petrochemical Company carried out rehabilitation projects over a period of six years, from 2014 to 2019 valued at about 28,219,110,067.10.
“Kaduna Refinery and Petrochemical Company also carried out rehabilitation works over the period under review valued at about N2,266,248,434.69.
“The total cost of rehabilitation for the three refineries based on the submissions of the NNPC from the year 2013 to 2019 is put at N42,646,596,313.40 only.
“Other project costs were reported in foreign currencies at the Kaduna refinery such as USD 43,672,537.56, EUR 2,852,068.15, and GBP 3,455,656.93.
“The SAIPEM Contracting Nigeria Limited was awarded a contract in 2017 by the NNPC for the technical plant survey of Warri and Kaduna refineries at a contract price of €2,025,000.32.
“The total value of the contract for the technical plant survey of Warri and Kaduna refineries awarded to SAIPEM was €2,025,000.32 and the total sum of money received by SAIPEM is €1,822,500.29 while the total sum outstanding is €202,500.03.
Read also:China pledges increased economic cooperation with Nigeria
“FBNQuest Merchant Bank (FBN-MB) was engaged by the NNPC between 2017 and 2020 as financial advisor on a project financing transaction for the rehabilitation of all the nation’s three refineries and placed on a monthly Retainer Fee of $28,000 starting from August 2, 2017. FBNQuest Merchant Bank (FBN-MB) received a total of US$438,012.44 from August 2017 to December 2018 as a financial advisor’s retainer fee from the NNPC.
“The financial advisors’ activities on the refineries rehabilitation programme were suspended by the NNPC on December 21, 2018, due to the financing consortia not reaching agreeable terms for the transaction with the NNPC.
The NNPC in 2016 obtained a presidential approval of the sum of US$2.1 billion for the rehabilitation of refineries to be funded over a 3-year period,” the report reads in parts.
It stated that the National Assembly approved provisions for the refineries’ rehabilitation for N100 billion, N100 billion and N109.326 billion in the 2020, 2021, and 2022 fiscal framework, respectively.
“The total deductions from the Federation Account for the rehabilitation of refineries from 2020 to 2021 are put at N191,670,000,000 only. The Federal Government expended N6.96 trillion between 2006 and 2020 on petroleum subsidy -(NEITI),” the report added.
The committee further found that the total amount spent on oil subsidy payments for the period under consideration from 2010 to 2020 was put at N5.948 trillion.
“A detailed Inspection of Equipment plus integrity study for rehabilitation of Port Harcourt refinery was signed on February 14, 2019, with Tecnimont SPA for the total lump sum price of US$51.45
“Contract for the engineering, procurement, construction, installation and commissioning of works for the rehabilitation of Port Harcourt refinery was signed April 16, 2021, between NNPC/PHRC and Tecnimont S.P.A. for the lump sum contract price of $1,397,000,000.00 only.
“The NNPC awarded a maintenance services contract for Quick-Fix Repairs of the Warri refinery to Daewoo E&C Nigeria Limited on June 24, 2022, at $492,328,500.
“The total cost of rehabilitating the nation’s refineries from 2010 to date may be put at N600,840,736,313.40, only.
“After due consideration and analysis of the data before the committee, the total actual cost of rehabilitating the Nigerian refineries may be put at N11,349,583,186,313.40.
“These costs were gotten from four sub-heads such as cost of operations and running refineries, cost of rehabilitation projects, subsidy payments, and deductions from the federation account for rehabilitation,” the committee said in the report.
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
