House of Representative probe NNPC over alleged $25b spent on refineries

House of Representatives, yesterday, ordered immediate probe of over $25 billion allegedly spent by the Nigeria National Petroleum Corporation (NNPC) on turnaround maintenance of refineries.

The decision was sequel to adoption of a motion initiated by Mr. Onofiok Akpan Luke during plenary presided over by Speaker Femi Gbajabiamila.

In effect, the House mandated its Committee on Petroleum Resources (Downstream) to carry out an investigative hearing and conduct a comprehensive audit of funds previously spent on rehabilitation/repairs and maintenance of the Port-Harcourt Refinery and others in the country.

The House further mandated the committee to examine the performance bond, assurance, warrantees and guarantees put in place for operating and maintaining the plants after commissioning and report back, for further legislative action, within six weeks.

Urging the Federal Government to grant licence and provide incentives for building and operation of modular refineries, the House directed its Committee on Compliance to ensure compliance with the resolution.

Luke, who chairs the House Committee on Judiciary, recalled that NNPC had allegedly spent about $25 billion on turnaround maintenance of the refineries in the past 25 years. He said it beats his imagination that government went ahead to approve another $1.5 billion (about N575 billion) for rehabilitation work on the 32-year-old Port Harcourt Refinery after promises that it would no longer spend money to fix the facilities.

“Previous rehabilitations notwithstanding, the NNPC audit report had last year revealed that three of the nation’s four refineries recorded N1.64 trillion cumulative loss in their 2014 to 2018 details. Despite processing no crude oil in June last year, the three refineries still cost the country N10.23 billion in expenses,” the Akwa Ibom-born lawmaker queried.

“The three refineries processed no crude because of the rehabilitation works being carried out on them. There was no associated crude plus freight cost for the three refineries since there was no production, but operational expenses amounted to ₦10.27 billion.”

The lawmaker stressed the need for intervention of the National Assembly to ensure judicious use of the approved $1.5billion, considering the fact that the facility has failed to perform after years of rehabilitation/repair/maintenance.

ALSO, yesterday, the House resolved to investigate alleged accounting and financial infractions of government and international organizations contained in the report of the Auditor General of the Federation.

The Auditor General had raised several queries on the federation account, particularly covering 2015 to 2017, as regards loss of income due to leakages, financial misapplication, misappropriation, under-reporting and falsification.

The report was corroborated by the forensic audit report by KPMG that indicted some Federal Government agencies for the loss of up to N526 billion and $21 billion.

Moving a motion for the probe at plenary, Abdullahi Sa’ad Abdulkadir said the losses were occasioned by an interplay of activities of persons both in the public and private sectors, including multinational companies.

According to him, the losses were also incurred by continued exploitation of Nigeria’s economy through deployment of deceitful and irregular accounting practices, resulting in huge capital flight, deficit balances and a weakened economy.

Abdulkadir warned that if urgent steps are not taken to address the issues, they may lead to a total collapse of the economy with its attendant social and political crises

The House consequently mandated the Committee on Public Accounts to investigate the allegations and report back within eight weeks for further legislative action.

Extracted from The Guardian