Globaltimes Nigeria reports that Former Vice President, Alhaji Atiku Abubakar, yesterday, described as prohibitive the $1.5 billion approved by the Federal Executive Council, FEC, for rehabilitation of Port Harcourt refinery.
FEC had on Wednesday given approval for the turn around maintenance of the refinery for $1.5 billion.
But Atiku in a statement, entitled “$1.5 billion to renovate Port Harcourt Refinery,” wondered why government should spend that amount to rehabilitate the refinery when Shell Petroleum Development Company, SPDC, sold a much smaller refinery for $1.2 billion in California, USA, last year.
According to him, budgeting the amount for the renovation of a refinery at a critical period of increased unemployment and inflation “would appear to be an unwise use of scarce funds.”
The statement read: “That Nigeria’s economy is in dire straits is a fact well known both to the nation and to our international partners. Unemployment has just reached an all-time high of 33 per cent, while inflation has hit another record high of 17 per cent.
“At this critical period, we must as a nation be prudent with the use of whatever revenue we can generate, and even if we must borrow, we must do so with the utmost responsibility and discipline.
“To, therefore, budget the sum of $1.5 billion to renovate or turn around the Port Harcourt Refinery would appear to be an unwise use of scarce funds at this critical juncture for an assortment of reasons.
“First, our refineries have been loss-making for multiple years, and indeed, it is questionable wisdom to throw good money after bad. At other times, I have counselled that the best course of action would be to privatise our refineries to be run more effectively and efficiently.
“Moreover, the cost appears prohibitive. Too prohibitive, especially as Shell Petroleum Development Company last year sold its Martinez Refinery in California, USA, which is of a similar size as the Port Harcourt refinery for $1.2 billion.
“We must bear in mind that the Shell Martinez Refinery is more profitable than the Port Harcourt Refinery.
“Given this discrepancy, might we ask if there was a public tender before this cost was announced? Was due diligence performed? Because we are certainly not getting value for money. Not by a long stretch.
“We cannot as a nation expect to make economic progress if we continue to fund inefficiency, and we are going too deep into the debt trap for unnecessarily overpriced projects.