The Nigerian National Petroleum Corporation and Italian Engineering giant, Maire Tecnimont, have signed off on the $1.5 billion contract to repair the Port Harcourt Refinery.
The contract was signed on Tuesday morning by the Managing Director of the Refinery, Ahmed Dikko as well as the Vice President ofTecnimont, Sub-Saharan Africa, Davide Pellizola.
Tecnimont SpA, an Italian engineering company, is to handle the engineering procurement and construction (EPC) contract for the rehabilitation of the 210000 barrels per day capacity refinery in Rivers state, Southsouth Nigeria.
The contract is expected to run in three phases of 18 months, 24 months and 44 months respectively. The project is expected to be funded by the NNPC, the Internally Generated Revenue, Budgetary Provisions and the AfreximBank.
In March, the Federal Executive Council (FEC) approved the sum of $1.5 billion for the rehabilitation of the refinery.
The approval had generated reactions from Nigerians with Atedo Peterside, founder of Stanbic IBTC and Anap Foundation, urging the government to subject the approval of $1.5 billion to “an informed national debate.”
Timipre Sylva, minister of state for petroleum, had said the rehabilitation will be done in three phases of 18, 24 and 44 months.
Sylva noted that the funding has three components from Nigerian National Petroleum Corporation (NNPC) internally generated revenue (IGR), Afreximbank and budgetary provisions.
“The Ministry of Petroleum Resources presented a memo on the rehabilitation of Port Harcourt refinery for the sum of 1.5 billion, and that memo was $1.5 billion and it was approved by council today,” he had said.
The major source of concern is that although the nation’s debt to GDP ratio stands at 34 per cent, one of the lowest globally, the nation is not making enough money to service those debts. Also 93% of government revenue is currently used to service debts.
The rehabilitation of the refinery has garnered a lot of controversies as many have expressed a lack of trust and fear that the funds are going down a rabbit hole and will further deepen the debt profile of the country needlessly.