The Nigerian National Petroleum Corporation (NNPC) has signed a $1.5 billion contract with Italian firm, Tecnimont SpA, for the complete rehabilitation of Port Harcourt Refinery.
The contract was signed despite criticisms trailing the Federal Executive Council (FEC’s) decision to approve the sum for the rehabilitation of the refinery with capacity to produce 210,000 barrels per day. NNPC’s Group Managing Director (GMD), Mallam Mele Kyari, who spoke at the contract signing yesterday, in Abuja, noted that the rehabilitation of the refinery was justifiable, given its inability to produce in the past three years.
Kyari, who insisted that the bidding process for the $1.5 billion cost was transparent, explained that Technimont was recommended by the original builders of the Port Harcourt Refinery to work with the NNPC, adding that the same process would be adopted for the rehabilitation of the Warri Refinery.
He said: “Me and my colleagues in NNPC, we are over 7,000, and this moment, we are very proud to say we have done the right thing because it’s a very abnormal situation.
“We all agree that no one will drag in labour unions, transparency international, infrastructure concessioning and regulatory agency of the country into a tender process. If we had anything to hide or worry about, we won’t do this.
“Me and my colleagues, we are very proud that we did this so that this tender process which culminated in this event of today is monumental history for us.
“We are aware of many of the misgivings in the public space around cost, around political compromises, why do we even have to do this?
“Some people in their own world, if they have the opportunity, this is what they would do. If they have the opportunity, they would hike the cost, they would have seen it as an opportunity to make or earn income that they have not worked for.
They would also see it as an opportunity for political patronage. “As we speak, I can confirm to you that if I see the COO Tecniomont, I cannot recognise him. As a matter of fact, when I came in, I had difficulty remembering whether I had met him, with due respect.”
Kyari noted that the NNPC was determined to fix the refineries despite mistakes made in the past on its strategies on refineries saying, “Since 2010, we thought that we will do this rehabilitation work through the original refinery builders.
We have said this over and over. Original refinery builders are not in the business of fixing refineries. That is not their line of business.” The GMD further disclosed that the cost in public domain included taxes like value added tax.
“The actual cost exclusive of VAT is actually $1.299 billion with provisional sum of $162 billion.
That is the value of the contract,” he added. Tecnimont COO, Mr. Davide Pellizola, said the company was proud to have won the contract, which would set stage for the complete rehabilitation of the Port Harcourt Refinery.