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FEC Approves $1.5bn For Yet Another Rehabilitation Of PH Refinery

.....It's nothing to jubilate about---Wike

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The federal government has approved the sum of $1.5 billion for yet another rehabilitation of Port Harcourt Refinery.

 

Minister of state for petroleum, Timipre Sylva, disclosed this to State House correspondents after the virtual Federal Executive Council(FEC) meeting presided over by President Muhammadu Buhari at the presidential villa .

 

According to him, the rehabilitation would be done in three phases of 18, 24 and 44 months.

 

He said the contract was awarded to an Italian company, Tecnimont Spa, who are experts in refinery maintenance.

 

 

He stated that the funding has three components from Nigerian National Petroleum Corporation (NNPC) Internally Generated Revenue (IGR), budgetary allocations provisions and Afreximbank.

 

He said, “The ministry of petroleum resources presented a memo on the rehabilitation of Port Harcourt refinery for the sum of 1.5 billion, and it was approved by council today.

 

“So we are happy to announce that the rehabilitation of productivity refinery will commence in three phases. The first phase is to be completed in 18 months, which will take the refinery to a production of 90 percent of its nameplate capacity.

“The second phase is to be completed in 24 months and the final stage will be completed in 44 months and contract was approved.And I believe that this is good news for Nigeria.

“The contractor that was approved by Council today is Messrs. Tecnimont spa, of Italy, it’s an Italian EPC company that won the bid and that was approved by Council.”

 

 

On operations and maintenance, Sylva said, “That has been a big problem for our refineries, as we all know, that was also exhaustively discussed in Council and the agreement is that we are going to put a professional operations and maintenance company to manage the refinery when it has been rehabilitated.

 

“In any case, it is actually one of the conditions presented by the lenders, because the lenders say they can only give us the money if we have a professional operations and maintenance company, and that already is embedded in our discussions with the lenders and we cannot go back on that.”

On whether the funds for the rehabilitation of the refinery was available, he said, “I want to answer that the funds are all in place and work will commence forthwith.

On when the other refineries in the country will be rehabilitated, he said, “Discussions are ongoing. We want to take one at a time and I want to assure you that before the lifetime of this administration expires, work on all the refineries would have at least commenced.”

 

 

On why the government did not go back to the original builders of the refinery, Sylva said, “The first action was to go to the original refinery builders, but you all know, like I do, that if you have a Toyota car, and your Toyota car develops problem, you don’t have to go to the builders of the Toyota to fix it. Usually there are people in the business of building Toyota cars, there are also people in the business of maintaining Toyota cars.

 

“So, we found out from the original refinery builders that they are not in the business of rehabilitating refineries, they are in the business of building refineries. So they actually pointed us to a rehabilitation company that we’re dealing with now.”

On the lenders of the funds, the minister said, “There are various components to the funding: there is funding from NNPC internally generated revenue, there is funding from the budget and there is also a debt funding. For the lenders, we are dealing with AFREXIM bank and they are very committed to us, we have actually concluded discussions with AFREXIM.”

 

On the issue of local participation in the rehabilitation of the refinery, Sylva said, “As you know, there is a local content law. The Nigerian Content Development and Monitoring Board (NCDMB) is fully part of the contracting process and has safeguarded the interest, adequately of our local contractors, so our local people will be fully involved with the Tecnimont spa.”

 

On if the rehabilitation of the refinery was as a result of labour unions’ demand that deregulation of petroleum price should come after refineries rehabilitation, he said, “First, I am not aware of any such agreement that deregulation should only take place after the refineries have been fixed, that was at no time part of our agreement. But of course, this government, from the very beginning, has been in the process of fixing and rehabilitating this refinery, so, it is not because of our discussion with labour, but it is actually the desire of the administration to ensure that our refineries work and that is the process that has bore fruit today.”

Meanwhile, Governor Nyesom Wike has said he would not rejoice over the approval of $1.5 billion for the rehabilitation of the Port Harcourt refinery.

The Rivers State governor, who was a guest on Channels Television’s Politics Today said it is not the first time the federal government is making promises, many of which he says were yet to see the light of day.

“We have had a lot of promises, we have had a lot of talks and nothing has materialized,” Wike stated.

On Wednesday, the Federal Executive Council approved the plan by the Ministry of Petroleum Resources to rehabilitate the Port Harcourt Refinery with $1.5billion.

 

 

In reaction to the development, Governor Wike said the news was nothing to make anyone jubilate. According to him, promises of this nature are only pointers to the fact that elections are around the corner.

“We have heard these promises and nothing has happened,” Wike stated.

He further opined that “If the refinery is going to work, it will improve a lot of economic activities, there will be employment for the people of the state. We will be happy but I am saying that we have had these promises and promises and nothing has happened. So, I don’t want to begin to say hallelujah. Let us wait and see what will happen based on the approval and the statement made by the minister of state, petroleum. We will hold him accountable for it.

“We know, even before the (APC) government came into being, they have promised a lot of things and later they come up to say because of these challenges and that, they are not able to fulfill them.

“We are going into 2023, so many promises will be made, so many approvals will be made.”

The governor said rather than jump in excitement regarding the approval by the Federal Executive Council, Nigerians must wait and see how the government acts on the rehabilitation exercise as promised.

 

 

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