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Published On: Fri, Oct 24th, 2014

Reps to probe N3.7 trillion failed refinery projects

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nigeria_reps_in_first_sessionBy Umar Muhammad Puma.

The House of Representatives has mandated it’s Committee on Petroleum, Downstream to investigate the failure of the federal government to construct the N3.7 trillion Naira Green Field refineries in Lagos, Bayelsa and Kogi states awarded 4 years ago.

A motion, moved by Rep Abbas Tajudeen (APC-Kaduna), noted that the federal government signed an agreement on May 13, 2010, with the China State Construction Engineering Corporation (CSCEC), for the construction of greenfield refineries project at Lagos, Bayelsa and Kogi states at the cost of $23 billion (N3.7 trillion) with a completion period of five years.

He informed the House that 80 percent of the cost is to be funded with a loan provided by China Export Credit Insurance Corporation and a consortium of Chinese banks, led by the Industrial and Commercial Bank of China, while the Nigerian National Petroleum Corporation (NNPC), is to provide 20 percent of the funding as equity contribution.

He expressed concern that no tangible work has been executed at any of the three projects sites, with just a year to the end of the period projected for completion of the refineries, even though the minister of petroleum resources had assured the public of the commitment of the NNPC to pursue the projects as soon as the White Paper on the report of the 22-member Task Force, headed by former minister of finance, Dr. Kalu Idika Kalu was released.

He added that despite a favorable recommendation by the task force for the Lagos refinery, out of the three, there is no evidence of any plan to construct a refinery at the Lekki site by year 2015, as reported by a newspaper on Monday, September 1, 2014.

He further noted that the revaluations by the minister of petroleum resources raised issues that need clarification as to the reason for the delay in the commencement of the project and subsequent reduction in their scope, after the delay in releasing the report if the task force and the White Paper on it.

The motion was unanimously adopted by the House and was referred to the Committee on Petroleum, Downstream for further legislative inputs.

 

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