AKK Gas pipeline project followed due process – NNPC

The Nigerian National Petroleum Corporation (NNPC) has said the
controversial Ajaokuta-Kaduna-Kano (AKK) Gas Pipeline Project followed
due process.

The corporation also dismissed allegation that the
Ajaokuta-Kaduna-Kano (AKK) Gas Pipeline Project was inflated to the
tune of $1.5 billion, describing the accusation by an unnamed online
medium against the National Oil Company as false, baseless and
unfounded.

A statement by the Corporation’s Group General Manager, Group Public
Affairs, Kennie Obateru, stated that the NNPC was considering
instituting legal actions against the medium.

NNPC stated in the release that the corporation brought the unfounded
accusation to the attention of the Bureau for Public Procurement (BPP)
which completely rejected the speculative analysis of the online
medium as false and not portraying the true position of the BPP’s
report on the subject.

“This is clearly a concocted analysis aimed at attacking the character
of the Group Managing Director (GMD) of NNPC, Mallam Mele Kolo Kyari,
and the integrity of the Bureau of Public Procurements (BPP).

“Mallam Mele Kyari did not become the GMD until July 2019 and he is
being mentioned in a process that took place in 2017 by the account of
the publication. 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”.

The statement added that it was on that basis that BPP confirmed and
granted 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. It wondered how a competitive tender process
could be inflated.

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

NNPC said the AKK pipeline project was one of the key landmark
projects that have had transparent processes from inception to date,
with the entire evaluation exercise carried out by NNPC and
Infrastructure Concession Regulatory Commission (ICRC).

The corporation cited the various stringent due process reviews and
scrutiny, internally and externally, which the AKK pipeline project
was subjected to.

According to the corporation, “these include a project bankability
study, conducted at project’s conception in 2013, undertaken by
Standard Chartered Bank to confirm appetite for attracting financing
from international community”.

“There also was execution of project feasibility and Front End
Engineering Design (FEED) by a reputable international company, ILF of
Germany, in 2014. The details developed at this phase had enough
engineering design details to enable a competitive class of estimate
to be submitted by the contractors.”

The NNPC said there was also advertisement of the project in both
local and foreign print media in 2013, “and competitive tendering and
evaluation of the bids by both NNPC and transaction advisers,
extensive review of the project design and the final cost in 2017 by
the BPP, receipt of due process certificates for the project.”

It listed other steps to include “renegotiation of the contract when
financing was not to be provided by the contractors following a
stalemate due to the inability of the company awarded the contract to
progress financing in 2019, and formation of a Steering Committee in
July 2020 by Mallam Mele Kyari comprising key project stakeholders as
NNPC, Ministry of Finance, Ministry of Justice, the Central Bank, Debt
Management Office, Nigeria Extractive Industries Transparency
Initiative (NEITI) and representative from the Presidency to ensure
transparency in the implementation of the project”.

NNPC stated that after several failed attempts in the last 13 years to
commence the AKK project activities, “the leadership of Mr Kyari
within one year of stewardship brought the project on track leading to
the award of the contract at a competitive price and eventual flag off
of construction that the world witnessed in June 2020”.