Energy

House to probe award of contracts for refurbishment of refineries by NNPC

4. The House of Representatives yesterday, approved President Muhammadu Buhari’s request for ongoing external loans to the tune of $8,325,526,537 (USD) and €490,000,000 (Euros) under the 2018-2020 External Borrowing (Rolling) Plan.

The House of Representatives has ordered an investigation into the award of contracts for the refurbishment of refineries by the Nigerian National Petroleum Corporation (NNPC).

The decision of the House was sequel to the adoption of a motion moved at the plenary on Wednesday by Hon. Henry Nwawuba.

Moving the motion, the lawmaker said contracts awarded by the NNPC must comply with local content laws which mandate foreign companies to show a robust and viable local content plan to promote and safeguard the development and growth of Nigerian companies.

Nwawuba noted that by the participation of Nigerian contractors in such opportunities, the capacity of such local companies is strengthened especially in terms of capacity development and creating employment opportunities with a positive multiplier effect on the economy.

He argued that in the contract award for Ajaokuta-Kaduna-Kano (AKK) pipeline, which is a 614km long natural gas pipeline being developed by the NNPC, Local Content laws were fully adhered to as BRENTEX and Oil served as the Nigerian local content counterparts with duly signed Memoranda of Understanding (MoU).

Nwawuba said: “Concerned that NNPC allegedly awarded the contract for the refurbishment of Warri and Kaduna refineries to SAIPEM and Tecnimont respectively without the submission of their local content plan for the contract’s execution and sustainable maintenance.”

He expressed concern that the NNPC, which is known for appreciable commitment to the rule of law, respect for individuals and local contractors, would begin to manifest such indistinct tendencies of economic sabotage, particularly at the highest level of her management by ironically disregarding the Nigerian government’s efforts to ensure local content development.

Nwawuba lamented that after refurbishing the refineries, the running maintenance contracts would be handled by SAIPEM and Tecnimont, which means that all the money spent by NNPC in that regard would be transferred abroad, thus leading to capital flight.

The lawmaker pointed out that the glaring deliberate abuse of the Nigerian Content Development Act by the NNPC and the contract awarded to foreign companies have caused untold economic hardship to indigenous contractors who employ Nigerian citizens.

Nwawuba said if urgent action is not taken to call NNPC to order, the situation may degenerate to both legal and civil actions capable of undermining the relative peace currently subsisting between the corporation and Nigerian contractors.

The House, therefore, mandated its Committee on Nigerian Content Development and Monitoring to investigate the matter and report back within two weeks for further legislative action.

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