By John Alechenu
The Senate has set up an ad hoc committee to probe the expenditure of N11.35 trillion on the Turnaround Maintenance, TAM of the country’s refineries by the Federal Government over a 13- year period (2010-2023).
This was sequel to a motion sponsored by Senator Sunday Steve (APC, Kogi West).
The ad hoc committee was mandated to conduct the investigations, in conjunction with the Senate Committee on Downstream.
Deputy Senate President, Jibrin Barau, who presided over plenary, in his remarks demanded that all those who had taken money meant for the TAM should be made to give account.
Senator Isah Jibrin was named as chairman of the ad hoc panel which is to conduct the probe along side the chairmen of the Senate committees on Petroleum Resources Downstream; Upstream; Gas; Finance; Appropriation, and Public Accounts.
The committee was given four weeks within which to submit its report.
While seconding the motion, Senator Isah Jibrin Ochocho, said the motion brought to the fore, the worrisome situation in Nigeria.
According to him, N4.7trn was spent on operating cost when the refineries are not functional.
In his contribution, Senator Adams Oshiomhole (APC, Edo North), said the Senate must ensure proper oversight functions to ensure Nigerians enjoyed value for their tax.
He declared: “We need to unravel why the refineries that were working before suddenly became morribund. Senate will do justice behind it to account for how much they have paid out and what they had done so far.
“The amount so far spent on the refineries can build brand new ones. Senators must take the issues with all seriousness it deserves.”
Also in his contribution, Senator Aliyu Wadada (SDP, Nasarawa West), commended his colleague for moving the motion.
He argued that the non-functionality of the refineries was reason for the insecurity in the country.
Similarly, Senator Ita Williams, (Cross River Central) said the turn around maintenance was a disservice to Nigeria because the refineries were not working.
In his remarks, Senator Adeola Solomon Olamilekan, (APC, Ogun West), said: “I am scared because if all the figures quoted were true, then Nigeria is in trouble. A look into the books of the NNPCL shows there is no profit.
“They keep on renovating morribund refineries. Everything needed to be done to unravel the scam must be done. NNPCL is the importer of fuel because they have access to foreign exchange. Senate must carry out an extensive investigation.”
Also, Senator Mohammed Danjuma Goje (APC, Gombe), said: “The issue of refineries is the bane of the nation’s economic woes. The scarcity of foreign exchange is caused by the NNPCL not remiting forex into the federation account.
On his part, Senator Idiat Adebule, (APC, Lagos West), wondered why the nation kept putting money in TAM annually when the refineries remained non-functional.
Earlier in his motion, Senator Steve said: “The Senate is aware that state-owned refineries in Nigeria have been a serious drain pipe of public finance, depriving the citizens of the joy of being an oil producing nation.
“Between 2010 and now, Nigeria is estimated to have spent N11.35 trillion, excluding other cost in other currencies, which include $593 million; 4.9 million Euros and 3.5 million Pounds, on renovation of refineries, yet they are unproductive.
“The Senate is also aware that the federal government has spent over N6trillion between 2010 and 2023 on fuel subsidy due to Nigeria’s low refining capacity and has spent almost twice the amount on rehabilitatings (turn around maintenance projects) its refineries in Port Harcourt, Kaduna and Warri between 2010 and 2022.
“That despite the moribund state of the four refineries, the operating costs of these refineries between 2010 and 2020 is estimated at N4.8 trillion.
“The refineries are estimated to make cumulative loss of N1.64 trillion, within four years;
concerned that the federal government has carried out rehabilitation projects in Port Harcoury Refinery Company, PHRC, over a period of seven years from 2013-2019 at an estimated cost of N12.2 billion only, in addition, on March 18, 2021, a rehabilitation contract was executed betweerg NNPC/PHRC and Tenenimont SPA at a Lump Sum of $1, 397, 000, 000.00 only, amid global public criticism.
‘’Phase 1 of the project is expected to be completed in 28 months after the contract, Phase 2 within 24 months and Phase 3 within 44 months of execution. Despite this, the Port Harcourt Refinery remains a money pit.
‘’Going by projections and representations from NNPCL the renovation works ought to be completed and operations of the refinery commenced by June 2023.
“The Senate is perturbed that in a bid to revitalize the Warri Refinery, the federal government has injected huge public funds into revamping Warri Refinery & Petrochemical Company Limited to the tune of over N28, 219, 110, 067.10 between 2014 and 2019.
“That particularly, around June 24, 2022, the Federal Executive Council, FEC, awarded maintenance services for quick fix repairs of Warri Refinery to Daewoo Engineering and Construction Limited at $497, 328, 500.00, yet at the moment the Warri Refinery is inactive.
“This is different from the 2017 contract award to Saipem Contracting Nigeria Limited for Tech Plant Survey of the Warri and Kaduna Refineries at 2,025, 000.32 Euros.
“It is disturbed that the Kaduna Refinery and Petro-Chemical Company, KRPC, has over the past 10vears gulped N2,266,248,434.00 in the name of rehabilitation, yet the refinery remains unproductive.
‘’Nigerian National Petroleum Company Limited, NNPCL, approved a $741million renovation deal with Daewoo Engineering and Construction Limited to renovate Kaduna Refinery in February 2023 and it is intended to restore the refinery to production of 110,000 barrels of petrol per day (at least 60per cent capacity) by early 2024.
“The Senate is worried that if a thorough investigation of the past and current rehabilitation project is not undertaken by theSenate, the circle of awarding unproductive turn around maintenance contracts may not abate, thereby retaining the status quo where rehabilitation contracts have become conduit pipes for siphoning pubic funds.
“ While Nigerian citizens continue groaning over the high cost of petroleum products, due to the moribund situation of the state-owned refineries, the world gravitates towards green/clean energy sources.
The Senate subsequently adopted the prayers which included: Mandate the Senate ad hoc committee to investigate all contracts awarded for the rehabilitation of all state-owned refineries
‘’Ascertain progress on the ongoing works in all refineries in order to forestall waste and corruption and to interrogate the Federal Ministry of Petroleum Resources, the NUPRC, NNPCL, BPE, on the best approach to commercialize and or ensure profitability of state-owned refineries.
‘’Invite the NNPCL, NUPRC and LNG to explain the nation’s preparation for green energy sources, in line with the Paris Agreement on Climate Change.’’
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