| The nation’s first private refinery may run into stormy waters if its promoters and their partner, Akwa Ibom State, do not settle their differences and raise the $20 million needed to get the project operational. Amakpe Refinery, located in Eket, Akwa Ibom and initiated over 10 years ago by two Nigerian investors based in the US with a commitment from the state government, needs a $20million lifeline to commence operations.
The state government had, after signing a Memorandum of Understanding (MoU) with the investors, invested $6.5 million, which is 25 percent of the shares, but lack of funds and differences between both parties have stalled the commencement of operations at the refinery which has gulped $38 million. Concerned citizens of the state, led by a US-based Nigerian, Tom Ekanem, told BusinessDay that over $38 million had already been spent on the fabrication of the plant, adding that more was needed to get the project on stream. “When the refinery was conceived, it was estimated to cost about $38 million. Now, with price escalation, variation and inflation, it is estimated that it will require an additional $20 million,” Ekanem said. Ekanem, in a statement titled: ‘The story of Amakpe Refinery’ which was made available to BusinessDay, said one way to raise such an amount was for Akwa Ibom government to make additional funds available for the completion of the project. “It is fair to say that the two principals, Helen Ikpe and Usua Amanam, have given all their available assets for the $24 million of UPS Capital/Exim Bank, Sterling Bank and NEXIM Bank loans and have no other assets to collateralise for additional project loans,” he said. “Amakpe Refinery is a Public-Private Partnership project (PPP). If the AKSG is still holding on to its 25 percent, it would be a matter of common sense for it to also contribute equitably to the estimated additional cost of about $21 million needed for the completion of the project,” Ekanem added. According to him, the state government could increase its share of ownership and possibly force its partners to take a minority position or in the alternative, buy out its partners and take over the project. He added that it could also guarantee additional loans for the project in exchange for a larger percentage of ownership, since the promoters may not have the additional assets to guarantee such funding. But the state government, on its part, feels the Amakpe Refinery project is private sector-driven one, and as such, it would be difficult for the state to take over ownership of the venture. In a recent interview, Aniekan Umanah, state commissioner for Information and Social Reorientation, said the state government had fulfilled its part of the bargain by contributing $6.5 million to the project, maintaining that it was up to the promoters to fund the refinery project. Investigations also revealed that for the project to fully come on stream, the issue of payment of compensation for land owners from Qua Iboe Terminal in Ibeno Local Government area of Akwa Ibom to Eket where the refinery is located over the right of passage of pipelines would have to be addressed. |
May162011