NNPC showing creativity, transparency in project conception and delivery
There is a sense in which the current management of the Nigerian National Petroleum Corporation (NNPC) is unlike previous ones. Since taking over the affairs of the corporation last year, Mallam Mele Kyari, the Group Managing Director and his team have exhibited neither the lethargy nor ineptitude common with public officials. The Kyari team has demonstrated a fertile inventiveness that has repositioned the NNPC as the leader in the oil and gas industry.
The Corporation opened yet another chapter of creative solutions to the challenges of product distribution on Friday 18th September, when it undertook a public bid opening for the rehabilitation of its pipelines, depots and/or terminal infrastructures. These include nine pipeline network systems with a total of about 5,120kilometres of pipelines and 23 products depots nationwide.
Some of these infrastructures had been yearning for rehabilitation for long, having been constructed more than 40 years ago and suffered massive pipelines vandalism and tampering at several points. Successive governments and past managements of the NNPC had dragged on despite the obvious problems, and only finding adhoc solutions when under public pressure probably because of the huge resources required to fix the problem.
That is why the step being taken to rehabilitate these infrastructures at a time of great financial difficulty for the nation is highly commendable. The ravaging COVID-19 pandemic is not helpful either, further constraining government’s revenue substantially. This is the more reason why taking on such a project at this time is intriguing for its audacity and ingenuity.
So, how would the NNPC finance such a project? Where would it raise the huge funds needed to deliver the project without squeezing the industry and further depleting national revenue? This is why it is remarkable that despite the lull in the global economy, the Mele Kyarii led Management has found a way to work around financing the infrastructural revamp.
The project, as revealed by the GMD, would be executed through private partnership financing. Private companies would construct, operate and ultimately hand over the facilities to government after a recoup of their investment from tariff earned during the period that they run the facilities. It is a form of infrastructure concessioning which enables quicker upgrade of the facility, assures of their integrity and boost their efficiency.
Seventy-eight companies took part in the opening bid, which in itself is an indication of confidence in the viability of the project and the integrity of the process. There is a remarkable feeling in the industry that the NNPC would ensure a level playing ground for all bidders so that only the best would win the offer. That is a positive development for the industry and for Nigeria.
This would certainly bolster investor-confidence to raise finance for other projects of national importance of this nature without jeopardising the liquidity of government. The process also highlights the corporation’s commitment to the Accountability, Transparency and Performance Excellence (TAPE) principle which has remained the mantra of NNPC since July 8, 2019 when Mallam Kyari assumed office as the 19th GMD.
Mallam Kyari himself admitted this much when he declared that the bid offer was conducted in fulfillment of NNPC’s commitment to transparency and accountability as an Extractive Industries Transparency Initiative (EITI) partner company, adding that the corporation was only taking a cue from President Muhammadu Buhari’s “directive that all NNPC’s operations must be guided by integrity.”
The Director General of the Infrastructure Concession Regulatory Commission (ICRC), one of the agencies represented at the occasion, Engr. Chidi Izuwah, could not hide his admiration for the transparency of the process. He was quoted as saying that the administration of the public bid was not only in line with the ICRC infrastructure drive, it equally demonstrated that things could be done rightly in this part of the world to enable value-addition for Nigerians.
There were other external observers who witnessed the exercise, and they include: the Bureau of Public Procurement, the Nigeria Extractive Industries Transparency Initiative (NEITI), Civil Liberty Organization and the Centre for Transparency Watch. Representatives of these organizations all were quoted as commending the process and recommending similar “model of transparency” to other government agencies.
Holding a public bid during a pandemic is a challenge that many government agencies could use to manipulate the process, and it is significant that the NNPC has ensured due process by holding a virtual bid. It did not use the COVID-19 pandemic as excuse to undermine the process in favour of undeserving companies. This further underlines and reinforces its commitment to transparency.
It is a dedication to transparency that had seen the NNPC fully deployed Artificial Intelligence (AI) to boost its processes across board, while also opening its books to the public for scrutiny. For the first time in the history of any government agency in Nigeria, the NNPC published the 2018 Audited Financial Statement (AFS) of 19 of its subsidiary companies nationwide on 11th June, 2020.
There is, undoubtedly, an ongoing process to institutionalize transparency and accountability in the management of the corporation. It is a momentum which the management of the corporation must sustain if it hopes to see through its reform agenda.
The sweeping reforms going on at the nation’s apex Oil Corporation has not gone unnoticed. On 18 August, 2020, the Extractive Industries Transparency International (EITI) made the NNPC one of its Partner companies. By that recognition, the NNPC joined a group of 65 other extractives companies, state-owned enterprises, commodity traders, financial institutions and Industry partners committed to observing the EITI’s support company expectations that include full disclosures of operational processes.
The change of attitude at NNPC is unsurprising. Kyari’s appointment in June last year had been applauded as a step in the right direction. Many of the stakeholders in the industry, including NEITI, had hailed him as a transparency champion and urged him to initiate reforms to reposition the corporation and the oil and gas sector.
Less than two years into his tenure, his footprints have become noticeable in the industry while his synergy with the Minister of State for Petroleum, Timipre Sylva has brought more stability to the sector.
NNPC under Kyari had undertaken a handful of important and critical projects in recent times. But the rehabilitation of its pipelines, depots and/or terminal infrastructures would be a legacy when and if accomplished. In view of Kyari’s aggressive, go-getter drive, not a few stakeholders would be willing to bet that it is not a matter of if, but when the project would be delivered.
Adams Aliyu wrote from Federal Housing Estate, Kubwa, Abuja