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NNPC justifies AKK gas project, faults $1.5bn contract inflation reports

By Idowu Abdullahi,

The Nigerian National Petroleum Corporation (NNPC) has faulted reports in some sections of the media that the Ajaokuta-Kaduna-Kano (AKK) Gas Pipeline Project was inflated to the tune of $1.527billion, saying that the corporation followed due process in awarding the contract after series of transparent bidding from contractors.

The national oil company explained that the clarification became imperative after several reports in the media alleged that the NNPC’s Group Managing Director, Mele Kyari, was involved in some backdoor practice that led to inflation of the budget, adding that the reports were baseless.

Justifying the contract, NNPC’s spokesperson, Kennie Obateru, said that it was surprising that the report accused the NNPC boss of inflating amounts in a contract process that took place in 2017, two years after Kyari became the GMD of the oil company.

Through a statement released to newsmen yesterday, Obateru explained that the oil company had informed the Bureau for Public Procurement (BPP) about the report and that the BPP rejected the ‘speculative analysis’ of the online medium as unfounded.

The NNPC spokesperson clarified that the AKK pipeline project had transparent processes from inception to date, with the entire evaluation exercise carried out by NNPC and Infrastructure Concession Regulatory Commission (ICRC).

According to him, the Kyari-led NNPC leadership in a transparent manner within one year in office awarded the contract at a competitive price and flagged-off the construction three months ago after several failed attempts in the last 13 years.

“This is rather unfortunate and malicious, considering that a further cut of $300million of the contract value was achieved under the Mele Kyari-led NNPC Management leading to the recognition by the Federal Executive Council as an unprecedented action.

“The release explained that BPP, following a detailed review and analysis of the procurement bid, confirmed that the unit costs for line pipes adopted by the NNPC for the project were reasonable when compared with current market prices for 40”, 36”, 20”, and 14” steel pipes, adding that it was on that basis that BPP confirmed and granted a certificate of no objection dated August 11, 2017.

“NNPC stated that the AKK project underwent a transparent and open competitive tender process that resulted in the emergence of the most competitive bidders, wondering how a competitive tender process could be inflated.

“Approval of all relevant authorities were obtained after intense scrutiny by the various agencies. This is a deliberate attempt to mislead the Nigerian public with baseless information,” the statement said.

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