FEC okays $1.5bn for Port Harcourt refinery rehabilitation

March 18, 2021
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The Federal Executive Council (FEC) has approved the sum of $1.5 billion for the rehabilitation of the Port Harcourt Refinery.

The 38th virtual session presided over by President Muhammadu Buhari at the presidential villa, Abuja on Wednesday also approved N3.070 billion for six contracts for the purchase of various laboratory equipment by the Nigeria Centre for Disease Control (NCDC) across the country.

Minister of State for Petroleum, Timipre Sylva, who spoke to State House correspondents on the refinery said the rehabilitation will 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.

According to him, 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 per cent 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 the contract was approved.

“And I believe that this is good news for Nigeria.”

On the contractor, the minister said: “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.”

Also addressing the issue of 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 the availability of funds for the rehabilitation of the refinery, the minister said: “I want to answer that the funds are all in place and work will commence forthwith.”

“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,” he added.

Sylva explained why the original builders of the refinery were not considered for the job, saying: “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 a 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 who would lend the country the money for the project, 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.”

Also speaking on the approved NCDC contract, the Minister of Health, Dr Osagie Ehanire said it followed the presentation of a meme by his minIstry to the council.

He said: “The Ministry of Health presented a memo on behalf of NCDC public health laboratory specialist and for Center for Disease Control. It is for six contracts for laboratory equipment and to the total worth of N3,070,892,988 for various equipment and supply, to strengthen the work of NCDC in various parts of the country, to be more ready for the work they do in diagnostics preparedness, not only for COVID-19 but for any other disease outbreak of public interest in the future.”

The Minister of Works and Housing, Babatunde Fasola, on his part, said Council, approved the revised estimate total cost of the Enugu-Onitsha Highway which is N8.649 billion.

The 22-kilometre section of the 100-kilometre road is being handled by Niger Construction in order to expedite the conclusion of works.

He said: “Variation was to cater for the change of the pavement surface, the binder course and the wearing course to crease thickness and also to utilise modified bitumen and also to strengthen the shoulders and some bridge works. Council approved the variation of N8.649 billion in favour of Niger Construction.”

The Minister of State Budget and National Planning, Clement Agba revealed that the council approved a memo for the reviewed National Integrated Infrastructure Master Plan 2020 to 2043.

He stated: “The maiden Master Plan was from 2014 to 2043 and embedded in it as a living document is that it ought to be reviewed every five years. There are about seven asset classes that are contained in the master plan. This is in the areas of transportation, energy, ICT, agriculture, water and mining, social infrastructure, housing and regional development, security and vital registration.

“The maiden edition didn’t have the macroeconomic framework embedded in it but with the reviewed update that has been approved today by the council, it includes macroeconomic framework.

“It also allows for the establishment of the National Council on Infrastructure under the Chairmanship of the Vice President to provide policy direction and infrastructure-related materials.”

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