FG

Fed Govt to open escrow account for PHRC’s $1.5b contract

The Nigerian National Petroleum Corporation (NNPC) will, in the next two months, establish an escrow account for the execution of the $1.5billion rehabilitation contract of the Port Harcourt Refinery Company.

Managing Director of the company, Ahmed Dikko broke the news in Abuja during the agreement signing ceremony for the contract between NNPC and Maire Tecnimont SpA.

He also said contract is for 44 months and it started with the signing of its agreement yesterday.

“The mode of payment which will be used for this payment will be through an escrow account, which should be established in the next two months. The commencement date of this contract that we will sign shortly will be from today (Tuesday) immediately we append our signatures.

The completion period for this project (max) is going to be in three stages. The maximum of this is for 44 months,” he said.

Admitting that the actual cost of the contract is $1.5billion, the Group Managing Director (GMD), Malam Kyari in his opening remarks gave a breakdown of the contract cost.

According to him, “the actual cost exclusive of VAT is $1.299billion, with provisional sum of $162million. That is the value of the contract. What you see in the media is that it is $1.5 billion we arguing to use. Yes, it is, but we are very compliant and we have included everything that everyone else should know”.

The NNPC boss explained the contract is not for a Turn Around Maintenance but for the “to-pitting”.

Kyari said it means that “some of the parts you have to replace them, some of them, you have to upgrade them. They have become obsolete. And ultimately there are costs attached to this. We have proper cost schedule and we will publish them for everyone to see what we are going to do in the rehab work”.

He urged the contractor to keep to the promise of delivering a minimum of 90 per cent of the installed capacity of the refinery on schedule.

Differentiating between this contract and the previous ones that failed, he said there was a thorough examination of refinery itself, there was a thorough scoping of the project and it passed through a tender process.

He said: “What is different today is that we have a clearly defined scope of work. We went through a competitive tender process. We did a scoping of this project over a thorough examination of the refinery itself. And ultimately we know what is wrong with it”.

Kyari also announced that from the work schedule, the Warri refinery contact award is targeted to come up latest in June.

In order to demonstrate accountability and transparency, Kyari said, the NNPC involved the Nigeria Labour Congress, Nigerian Extractive Industries Transparency Initiative, the Nigerian Content Development and Monitoring Board in the tender process of the contract.

Speaking, the Maire Tecnimont SpA, Sub Sharan Vice President, Davide Pelizzola, promised that his firm will deliver the contract on schedule.

In his opening remarks, the NNPC Chief Operating Officer, Refinery and Petrochemical,mMr. Mustapha Yakubu, noted that the “project will help end products import”.