The Senate, on Tuesday, resolved to set up an ad hoc committee to investigate the alleged lack of transparency in the proposed concessioning of Port Harcourt Refinery and Petrochemical Company.
The Ministry of Petroleum Resources, which is planning the concession, is also working on the award of a $15 billion contract to the Nigerian Agip Oil Company (NAOC), a subsidiary of the Italian Oil giant, ENI.
The Red Chamber ordered the stoppage of the concessioning process following the adoption entitled “Non-transparent transactions relating to the planned concession of the Port Harcourt Refinery to Agip and Oando by the Ministry of Petroleum Resources.”
The motion was sponsored by Senator Sabo Mohammed (APC Jigawa South).
Senator Mohammed told the senators that he was concerned about the lack of transparency of the transactions, adding that the Federal Government recently entered into agreement with NAOC to construct the refinery, which he said also included investment by Agip in a power plant in the Niger Delta.
In adopting the motion seeking to put the contract on hold, the Senate said it would enable the lawmakers know how and why such a deal was sealed and the criteria used to select Agip/ENI and Oando Plc for its maintenance.
Senator Mohammed also told the Senate that major stakeholders in the refinery, including the Bureau of Public Enterprises (BPE), empowered by law to conduct the concession and the labour unions were not aware of the deal, which he said was supposed to be signed in July this year.
“The Minister of State for Petroleum Resources stated that the agreement was part of a broader Federal Government’s plan to increase capacity for local production and consumption of petroleum products with the aim of ending fuel importation in Nigeria.
“While the resolve by the Federal Government to increase local refining capacity is laudable and should be applauded by all Nigerians, the observance of corporate governance principles and the country’s extant laws must be followed to the letter,” he said.
He stated that it was not clear if the new arrangement was a concession agreement or an agreement to build a new refinery, adding that the confusion became obvious following the disclosure by the Chief Executive Officer of Oando on the floor of the Nigerian Stock Exchange that the company had received the approval to build operate and maintain the Port Harcourt refinery.
He also added that the concession would have been a good idea since it was targeted at ending fuel importation by 2020, but failure to adhere to due process “is illegal and a clear attempt at ridiculing Nigerians.”
He said failing to observe due process would definitely create a hole that would be hard to fill in the anti-corruption crusade of the present administration.
According to him, in handling such transactions, the best practice would be to select partners through open and competitive bids.
In his contribution, Senator Dino Melaye asked the Senate “to rise and stop another massive corruption that is about to take place in the refinery just as it happened in the power sector when electricity was sold to the private sector without any result till date.”
According him, the problem currently bedevilling the electricity Distribution Companies (DISCOs) as well as the troubled concessioning of the Lagos-Ibadan highway and Delta Steel in Aladja, Delta State, would have been avoided if due process was followed.
Senator Kabiru Gaya (APC Kano South), however, condemned the planned concession by the Federal Government, insisting that it was better to build new refineries than hand over the existing refineries in Port Harcourt, Warri and Kaduna which he said had not been functioning for years now.
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