Chinese Banks Abandon NNPC Contract Over Alleged Scam, Company Confirms Exit
- Chinese banks that were supposed to provide 85% of funding for the Ajaokuta-Abuja-Kano pipeline have backed out
- The banks allegedly cited contract inflation by their Nigerian counterparts in NNPCL
- Mele Kyari, NNPC Group CEO, said the company had spent $1.1 billion on the project despite the withdrawal of the Chinese banks
The Nigerian National Petroleum Corporation Limited (NNPCL) has said it spent over $1.1 billion on the Ajaokuta-Abuja-Kano pipeline project after two Chinese banks, the Infrastructure and Commercial Bank of China and China Export Credit Agency (SINSODURE), were supposed to bring $2.38 billion or 85% of the fund left.
NNPCL Group CEO Mele Kyari said the company would continue to shoulder the funding for the project despite fraud allegations, The Guardian report says.
Source: UGC
NNPCL boss silent on contract inflation allegation
According to the report, Kyari did not confirm the contract inflation allegations, which some media outlets reported.
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Reports said the project failed on financial prudence based on globally accepted best practices.
The report said similar projects worldwide, such as the 693km Yucatan Penninsula Gas Project in Mexico, the 460km Export La Moran Pipeline in Argentina and Chile, and the Bolivia and Sao Paulo projects, cost less than was quoted in the NNPCL project.
Per the examples, Nigeria has the highest cost of such contracts, which is partly responsible for the exit of the funding firms, saying they cannot go into a dalliance with Nigerians as they could be exposed when they submit their financials to their home countries.
Some top officials of NNPCL and Oilserv Limited, the contractor for the project, accompanied Kyari when he visited some of the project sites in Kogi State on Monday, April 24, 2023.
NNPCL commits to going solo on the project
The NNPCL boss said that the company would continue to fund the vast project despite the absence of a third-party financier. He did not speak on the reason the Chinese banks abandoned the project.
He said:
“So far, NNPC Ltd has funded over $1.1 billion of the project. To date, none of the project activities have been abandoned as reported, and we reassure all stakeholders that we have a line of sight to project delivery on schedule. NNPC Limited remains highly committed to delivering strategic national infrastructure projects through responsive project delivery, active collaboration with government security agencies and communities, and technology deployment.
“This is one of the most massive projects of proportion value to our country for economic growth. It is a must-deliver project, and we have continued to fund it despite not having third-party finance support; we will deliver this project.
“We do not owe a dollar to our contractors; there are over 30 sites that are active today in this project. We are hopeful of delivering this project.”
He said insecurity has led to the loss of lives of the workers on the site, saying that 70% of welding work has been completed.
“No be the same oil we dey Sell?” Nigerians ask as Saudi Arabia adds $80BN oil money to its wealth fund
Legit.ng reported that while the Nigerian National Petroleum Company Limited (NNPCL) struggles to remit money to the federation accounts, Saudi Arabia’s Aramco has added $80 billion worth of shares into the country's sovereign wealth fund.
A sovereign wealth fund (SWF), also known as a social wealth fund, is the surplus money that a country accrues over time.
According to a statement released by the official Saudi Press Agency, the shares were transferred to Sanabil Investments, a firm controlled by the kingdom's Public Investment Fund (PIF).
Source: Legit.ng
