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AKK Gas Pipeline Project Contract Not Inflated- NNPC

The Nigerian National Petroleum Corporation (NNPC) said the Ajaokuta-Kaduna-Kano (AKK) Gas Pipeline Project was not inflated to the tune of 1.527 billion dollars, as alleged in an online media outfit.

The corporation disclosed this in a statement signed by its spokesman, Dr. Kennie Obateru, in Abuja on Monday.

He described the accusation as false, baseless and unfounded.

Obateru noted that the NNPC was considering instituting legal actions against the medium and her collaborators.

He added that the corporation brought the accusation to the attention of the Bureau for Public Procurement (BPP) which rejected the speculative analysis of the online medium as false and not portraying the true position of the BPP’s report on the subject.

“This is clearly a concocted analysis aimed at attacking the character of the Group Managing Director (GMD) of NNPC, Malam Mele Kyari, and the integrity of the Bureau of Public Procurements (BPP).”

“Kyari did not become the GMD until July 2019 and he is being mentioned in a process that took place in 2017 by the account of the publication.”

“This is rather unfortunate and malicious, considering that a further cut of 300 million dollars of the contract value was achieved under the Mele Kyari-led NNPC management, leading to the recognition by the Federal Executive Council as an unprecedented action,” he said.

He explained that BPP, following a detailed review and analysis of the procurement bid, 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.

He added that it was on that basis that BPP confirmed and granted a certificate of no objection dated Aug. 11, 2017.

The spokesman further said that the AKK project underwent a transparent and open competitive tender process that resulted in the emergence of the most competitive bidders.

“Approval of all relevant authorities were obtained after intense scrutiny by the various agencies. This is a deliberate attempt to mislead the Nigerian public with baseless information,” he said

He 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).

He cited the various stringent due process reviews and scrutiny, internally and externally, which the AKK pipeline project was subjected to include:

“Conduct of project bankability study, at the project’s conception in 2013, undertaken by Standard Chartered Bank to confirm appetite for attracting financing from international community.”

‘Execution of project feasibility and Front End Engineering Design (FEED) by a reputable international company, ILF of Germany, 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.”

“Advertisement of the project 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,” he said.

Other processes, he said, was competitive tendering and evaluation of the bids by both NNPC and transaction advisers, Alpine and also by a team from ICRC

Also, an 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.

“Receipt of due process certificates for the project, including Original Business Case and Final Business Case from ICRC and Local Content Compliance Certificate from Nigerian Content Development and Management Board (NCDMB) before presenting to the Federal Executive Council (FEC) for approval in December 2017.”

“Renegotiation of the contract when financing was not to be provided by the contractors following a stalemate due to the inability of the company awarded the contract to progress financing in 2019, leading to further cut of 300 million dollars of the contract value, among others,” added.

He called on all well-meaning Nigerians to give the Kyari NNPC led management the credit it deserved, even as it encouraged them to follow the execution of the project.

This, he said was being undertaken in a transparent and aggressive manner in line with the Transparency, Accountability, Performance Excellence Agenda of the Corporation.

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