Director-General of the Bureau of Public Enter-prises (BPE), Mrs. Irene Chigbue, said yesterday that due process was observed in the concluded sale of both the Port Harcourt Refinery Company and Kadu-na Refining and Petrochemical Company.
This is coming against the backdrop of widespread criticisms over the sales alleged to be hasty and suspicious. A House of Represen-tatives committee had described the transactions as improper and flawed, while several submissions at the Senate Committee hearing last week condemned the process that led to the last-minute sales by the former president, Chief Olusegun Obasanjo.
Chigbue said yesterday in Abuja during a courtesy call by a delegation from the United States Department of Energy that the transactions were concluded after long and rigorous processes.
She said contrary to the views observed by �some misinformed commentators,� the privatisation of the nation�s refineries was not hurriedly done but was in fact �the result of a complex five-year transaction process conducted subject to international best practice and following the adoption of a multiple-bidder competitive tender process.�
According to her, the process was managed by two of the world�s leading practitioners of refinery privatisations�Credit Suisse First Boston of the United States and BNP Paribas Corporate Finance of France.
Chigbue said the selection process and emergence of the core investor in both refineries was in line with government�s drive to select an investor group that would have the technical and managerial expertise as well as experience to turn around the fortunes of the refineries. She said the successful investors must have the financial capacity not only to pay for the acquisition but also to fund the capital-intensive turn-around.
Explaining that the qualification process involved the technical evaluation of the expressions of interest submitted by the bidders against stringent criteria built around technical, managerial and financial benchmarks, the BPE boss disclosed that each of the submissions was evaluated to determine their suitability to participate in the process.
She said �the nation�s four refineries, with a name-plate capacity of refining 445,000 barrels per day of crude, were established about 30 years ago,� but lamented that �barrage of corruption, poor management, sabotage and lack of the mandatory turn around maintenance (TAM) every two years, has made all the four refineries inefficient, thereby operating at about 40% of full capacity, at best of times.�
According to her, since their commissioning, the nation�s crude oil refineries have consistently failed to meet up to expectations and as such their operations have been characterized by low capacity utilisation, mismanagement, corruption and ineptitude.
She added that the resultant continued dismal performance of the refineries which have had negative impact on domestic availability of refined products critical for domestic and industrial use, constitutes a major obstacle in Nigeria�s drive towards economic development and reform.
It was for these reasons that the Port Harcourt, Kaduna and Warri refineries were slated for privatization, she said.
The leader of the delegation, Ms Carolyn S. Gay of the Office of African and Middle Eastern Affairs of the US Department of Energy, thanked the BPE management for the �diligence displayed in explaining the issues behind the privatisation programme and refineries privatisation in particular�. She assured that the United States government through the United States Agency for International Deve-lopment and the Department of Energy will continue to seek areas of collaboration.
Jul182007