Former vice president Atiku Abubakar has faulted the decision of the Muhammadu Buhari government to expend the sum of $1.5 billion to rehabilitate the Port Harcourt refinery, Rivers state.
The Federal Executive Council (FEC) on Wednesday, approved the sum for the project.
Timipre Sylva, minister of state for petroleum, said the contract was awarded to Tecnimont SPA, an Italian company.
He added that the rehabilitation will be done in three phases of 18, 24 and 44 months.
Reacting via his twitter handle @atiku on Thursday, the former vice-president said the sum approved for the project is suspicious.
He argued that a more valuable refinery of the same size as that of Port Harcourt was sold for less by Shell Petroleum Development Company of Nigeria (SPDC), asking if due diligence was performed before the approval of the fund.
“$1.5 billion to renovate the Port Harcourt refinery is suspicious at the least,” Atiku said.
“Moreover, the cost appears prohibitive. Too prohibitive, especially as Shell Petroleum Development Company last year sold its Martinez Refinery in California, USA, which is of a similar size as the Port Harcourt refinery, for $1.2 billion. We must bear in mind that the Shell Martinez Refinery is more profitable than the Port Harcourt Refinery.
“Given this discrepancy, might we ask if there was a public tender before this cost was announced? Was due diligence performed? Because we are certainly not getting value for money. Not by a long stretch.”
Atiku, who has been advocating the privatisation or sale of the refineries, argued that refinery is not worth expending the nation’s scarce resources on.
He explained that there are more important things to channel the fund to given the state of the nation’s economy.
“That Nigeria’s economy is in dire straits is a fact well known both to the nation and to our international partners. Unemployment has just reached an all-time high of 33%, while inflation has hit another record high of 17%,” Atiku tweeted.
“At this critical period, we must as a nation be prudent with the use of whatever revenue we can generate, and even if we must borrow, we must do so with the utmost responsibility and discipline.
“To therefore budget the sum of $1.5 billion to renovate or turn around the Port Harcourt Refinery would appear to be an unwise use of scarce funds at this critical juncture for an assortment of reasons.
“First of all, our refineries have been loss-making for multiple years, and indeed, it is questionable wisdom to throw good money after bad. At other times, I have counselled that the best course of action would be to privatise our refineries to be run more effectively and efficiently.
“We cannot as a nation expect to make economic progress if we continue to fund inefficiency, and we are going too deep into the debt trap for unnecessarily overpriced projects.”