THE controversy generated by the eleventh-hour sale of two of Nigeria’s refineries may not abate so soon owing to emerging revelation in the public domain.
For instance, immediate past administration of President Olusegun Obasanjo spent a princely N140.8 billion ($1.1 billion) in the maintenance of the Port Harcourt and Kaduna Refineries during the four years of his second tenure, which began in 2003.
But competent sources in the Nigerian National Petroleum Corporation (NNPC) told The Guardian at the weekend that the government disposed of the refineries at $721 million in the twilight of its tenure.
The refineries were sold to Bluestar Oil Services Company, a subsidiary of the Transnational Corporation (Transcorp Plc).
According to BPE officials, Bluestar Oil Consortium members are the Dangote Industries Limited; Transcorp; Zenon Petroleum and Gas Ltd; Rivgas Petroleum; and Gas Ltd, Jovis Nigeria Ltd with China Petroleum & Chemical Corporation (SINOPEC) as technical partner.
The men and women behind these comprise some of Nigeria’s new oligarchs, who were the backbone of the economic reform programme of the Obasanjo government, and who picked up controlling shares in most of the disposed national assets.
While the Port Harcourt Refining Company Limited (PHRC) went up for $561 million, the Kaduna Refinery and Petrochemical Company (KRPC) was sold for $160 million.
Payments for the two refineries were effected between one month and two weeks to the end of the government last May 29.
A breakdown of the spending on the two refineries in the last four years shows that of the $1.1 billion sunk, the highest amount of $700 million was spent between 2006 and early 2007 while the balance of nearly $400 million was spent from 2003 to 2005.
The spending profile also reveals that the Federal Government was sinking yearly the sum of $10.8 million as maintenance cost for the Port Harcourt Refinery and another $30.9 million under the sub-head, “Other related cost.”
Yearly, the Kaduna Refinery was consuming $42.5 million as maintenance cost and another $48.8 million as “related cost.”
Thus, for the three years running, the Kaduna Refinery consumed $274 million while the Port Harcourt gulped $125.1 million.
In spite of the huge spending of the two refineries, they never worked optimally, as Nigeria continued to rely on petroleum products importation with its attendant high cost and scarcity.
However, the Bureau of Public enterprises (BPE), the government agency charged with the privatisation of State-owned enterprises, told The Guardian that the refineries’ sale became inevitable and in public interest, to stop public funds from further going down the drain.
According to the agency’s Deputy Director in charge of Public Communications, Mr. Joe Anichebe: “The refineries have not been working. All petroleum products used in Nigeria are imported, which is a paradox.
“The Government is unable to run any business successfully and this is the case with governments all over the world. The private sector is best suited to run businesses.”
Anichebe denied the allegation that due process and transparency were not followed in the disposal of the two government drainpipes.
He said: “We conducted a clean and transparent process in the refineries’ privatisation. I can tell you without fear of contradiction that till now, we are yet to get complaints from any of the bidders for the refineries on account of our not being transparent in the handling of the transactions.
“Even the bidders that were disqualified for not fulfilling the requirement of submitting a 60 per cent bank draft in the value of financial bids they submitted have not complained because the rules were set well ahead of time.
“They (failed bidders) can’t complain against BPE or the eventual winners because they would not want anybody to be penalised for meeting the criteria moreso that the rules were set more than a year ago.”
The BPE spokesman also said it was untrue that the organised Labour had called for the reversal of the sale of the refineries because Labour and the BPE had reached common grounds on the refineries’ privatisation, which they both dutifully respected.
He listed the common grounds to include that only 51 per cent of government’s equity would be sold to a core investor while 10 per cent of the equity would be reserved for the workers and another 10 for the host communities.
All of these, he said, had been observed in the transactions.