New Telegraph

Bid: NNPC tightens noose on multibillion dollar refinery contract

● No job for tax defaulters, criminals

How winners of three Nigerian refineries’ O&M contracts will emerge

The Nigerian National Petroleum Corporation (NNPC) has given details of how winners will emerge in a bid process for the multi-billion dollars contracts for provision of operations and maintenance (O&M) services at three petroleum refineries in Nigeria.


The select refineries, according to findings by New Telegraph, are Port Harcourt Refining Company (PHRC), Warri Refining & Petrochemical Company (WRPC), and Kaduna Refining and Petrochemical Company (KRPC). Setting stringent measures on how winners would emerge,


NNPC tightened the noose on contractors with history of tax default and crimes. Any prospective bidder “must not be in receivership, nor subject to any form of insolvency or bankruptcy proceeding, and definitely not a tax defaulting company.


It should also not have any director convicted in any country for a criminal offense relating to fraud or any financial impropriety or criminal misrepresentation or falsification of facts relating to any matter,”


NNPC said in a document  sighted by this newspaper. Interested parties, it continued, “must have experience in such maintenance jobs in Africa and/or in Nigeria, and must provide at least three specific examples of O&M services and/or engineering, procurement, construction (EPC) experience on refinery, gas processing, LNG and other processes.


“They must also provide evidence of compliance with the provisions of the Industrial Training Fund (ITF) Amendment Act 2011 and comply with the Nigeria Social Insurance Trust Fund (NSITF) Act by the inclusion of a current copy of a compliance certificate expiring on 31st December this year as well as evidence of compliance with PENCOM Reform Act 2004 by the inclusion of valid pension clearance certificate expiring on the aforementioned date.


“In addition, the company must have audited accounts for the past four years, provide evidence of the latest credit ratings and the name of the rating agency, with a demonstration of a minimum average annual turnover of $2 billion at the least, for the financial year ending 2020 and provide evidence of compliance with the local content Act.”


The scope of work, NNPC continued, shall cover longterm as well as short-term production/ operations planning, production & operations execution, monitoring, reporting and optimization of operations.


The selected contractors will be expected to engage in the process and control engineering, quality control, qual-   ity assurance and laboratory, environmental management as well as turn-around maintenance planning and execution among others.


Meanwhile, the Nigerian National Petroleum Corporation and Italian Engineering giant, Maire Tecnimont, have signed off on the $1.5 billion contract to repair the Port Harcourt Refinery.


The contract was signed by the Managing Director of the Refinery, Ahmed Dikko, as well as the Vice President of Tecnimont, sub-Saharan Africa, Davide Pellizola. Tecnimont SpA, an Italian engineering company, is to handle the engineering procurement and construction (EPC) contract for the rehabilitation of the 210000 barrels per day capacity refinery in Rivers state, South South Nigeria.


The contract is expected to run in three phases of 18 months, 24 months and 44 months respectively.


The project is expected to be funded by NNPC, the Internally Generated Revenue, Budgetary Provisions and AfreximBank. In March, the Federal Executive Council (FEC) approved $1.5 billion for the rehabilitation of the refinery.


The approval generated reactions from Nigerians with Atedo Peterside, founder of Stanbic IBTC and Anap Foundation, urging government to subject the approval of $1.5 billion to “an informed national debate.”


Timipre Sylva, Minister of State for Petroleum Resources, had said the rehabilitation would be done in three phases of 18, 24 and 44 months.


Sylva noted that the funding had three components from Nigerian National Petroleum Corporation (NNPC) internally generated revenue (IGR), Afreximbank and budgetary provisions.


“The Ministry of Petroleum Resources presented a memo on the rehabilitation of Port Harcourt refinery for the sum of $1.5 billion, and that memo was $1.5 billion and it was approved by council today,” he said.


The major source of concern is that although the nation’s debt to GDP ratio stands at 34 per cent, one of the lowest globally, the nation is not making enough money to service those debts. Also 93 per cent of government revenue is currently used to service debts.


The rehabilitation of the refinery has garnered a lot of controversies as many have expressed a lack of trust and fear that the funds are going down a rabbit hole and will further deepen the debt profile of the country needlessly




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