Despite widespread opposition to the deal, the Nigerian National Petroleum Corporation, NNPC, on Tuesday signed the $1.5 billion contract with Italian firm, Tecnimont SpA for the complete rehabilitation of the Port Harcourt Refinery.
Many has criticised the decision of the Federal Executive Council to approve the sum for the rehabilitation of the 210,000 barrels per day refinery, and there were calls for the outright privatization of the refinery.
But speaking at a contract signing ceremony in Abuja, the Group Managing Director of NNPC, Mallam Mele Kyari, said that the decision to rehabilitate the refinery which has not produced in the past three years was justifiable.
“Myself and my colleagues in the NNPC, we are over 7,000, and this moment, we are very proud to say we have done the right thing. We have done the right thing because it a very abnormal situation”.
As for those questioning the $1.5 billion cost, Mr Kyari said the bidding process was transparent.
“First and foremost, we all agree that no one will drag in labour unions, transparency international, infrastructure concenssioning and regulatory agency of the country into a tender process. If we had anything to hide or worry about, we won’t do this.
“I and my colleagues, are very proud that we did this so that this tender process which culminated in this event today is monumental history for us.
“We are aware of the many of the misgivings in the public space around cost, around political compromises, even around potentially why do we even have to do this. We understand this.
“Some people in their own world because if they have the opportunity, this is what they would do. If they have the opportunity they would hiked up 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 recognize him. As a matter of fact when I came in, I had difficulty remembering whether I had met him, with due respect”, he stated.
Kyari noted that NNPC has in the past made mistakes on strategies based on refineries, but are determined to fix the refineries.
“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”.
He explained that Technimont was recommended by the original builders of the Port Harcourt refinery to work with NNPC and he added that the same process would be adopted for the rehabilitation of the Warri Refinery too.
He disclosed that the cost in public domain include 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.
He assured that the project will be delivered on time and on budget as agreed.
On his part, Tecnimont COO, Mr. Davide Pellizola said the company is very proud to have won the contract for the rehabilitation of the Port Harcourt refinery.
He as well added that the ceremony was the beginning of a journey for the complete rehabilitation of the refinery.