NNPC denies inflating cost of AKK gas pipeline project by $1.5bn

The Nigerian National Petroleum Corporation (NNPC), on Monday, denied claims that the Ajaokuta-Kaduna-Kano (AKK) Gas Pipeline Project was inflated to the tune of $1.527billion.

It described the allegations as false, baseless and unfounded.

In a statement issued by its Group General Manager, Group Public Affairs, Dr Kennie Obateru, the Corporation said the allegation emanated from an analysis conducted by an Online medium.

It explained that the Bureau for Public Procurement (BPP)following a detailed review and analysis of the procurement bid, had confirmed that the unit costs for line pipes adopted by the NNPC for the project were reasonable when compared with current market prices for 40”, 36”, 20” and 14” steel pipes.

It added that the BPP on this basis confirmed and granted a certificate of no objection dated August 11, 2017.

NNPC stated that the AKK project underwent a transparent and open competitive tender process that resulted in the emergence of the most competitive bidders, wondering how a competitive tender process could be inflated.

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It said the AKK pipeline project was one of the key landmark projects that have had transparent processes from inception to date, with the entire evaluation exercise carried out by NNPC and Infrastructure Concession Regulatory Commission (ICRC).

It argued that the project was subjected to bankability study, at project’s conception in 2013, undertaken by Standard Chartered Bank to confirm appetite for attracting financing from the international community.

Also, it said Execution of project feasibility and Front End Engineering Design (FEED) by a reputable international company, ILF of Germany was conducted in 2014.

“The details developed at this phase had enough engineering design details to enable a competitive class of estimate to be submitted by the contractors,” it said.

Also, it stated that the project was advertised in both local and foreign print media in 2013.

“After completion of the FEED study by ILF in 2015, the prequalified bidders were issued tender documents

“Competitive tendering and evaluation of the bids by both NNPC and transaction advisers, Alpine and also by a team from ICRC.

“Extensive review of the project design and the final cost in 2017 by the BPP, culminating in the issuance of a Certificate of No Objection in August 2017,” it added.

NNPC stated that after several failed attempts in the last 13 years to commence the AKK project activities, the leadership of Mallam Mele Kyari, within one year of stewardship brought the project on track leading to the award of the contract at a competitive price.


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