WANTED: OPEN BIDDING FOR THE REFINERIES

Open bidding process gives the best investor possible, argues Dan D. Kunle

Iread a statement from a national daily recently credited to Dr. Ibe Kachikwu, Minister of State for Petroleum Resources, in Vienna, Austria, where he attended the 172nd OPEC meeting. Kachikwu’s contradictory utterances further confirm and reinforce my humble conviction that he should use his good offices to open up these refineries for International Competitive Bidding (ICB). This will be in tandem with the philosophy of President Muhammadu Buhari and best global practices.

May I also remind the minister that his utterances do not reflect and comply with the simple rules of public governance in a democratic setting. Furthermore, crude oil refinery concession or ‘farm out’ or privatisation is not as highly technical as the minister is claiming in his statements. This is because it was done before and I wish to refer him to BPE/NCP 2007 refinery privatisation closure. One of the world leading investment banks, First Boston Credit Sussie (now Credit Sussie) was the federal government privatisation adviser on the four refineries. PNB Paribas also gave BPE advisory support for the final closure of Port Harcourt and Kaduna refineries. We still have these Nigerian professionals and expertise both in BPE and around the country to handle this new ambitious ‘highly technical’ refinery concession through an open and fair bidding competition.

The minister contradicted himself by the statement that the bidding process is open to all willing investors. But how will all the willing investors with technical and financial capabilities know across the globe if he does not advertise what the government wants to sell or concession with all the criteria and ground rules for them to comply with? Do you think the whole world will be aware by watching you on TV, talking about the refinery concessions in Nigeria as a ‘talk advertisement’ from Houston, Texas to Lagos to Vienna, yet you are going to be the umpire for the bid evaluations and awards?

Kachikwu claims that the federal government has decided to concession all refineries by August 2017 is a welcome decision, but he must ensure that the process is through an open bid competition via the appropriate statutory federal government bodies NCP/ BPE/ ICRC to enable Nigerians have a ‘bidders beauty parade’. This is the essence of the open bid process because it will give us the best and most beautiful investor possible. As proprietary as the case with GE/ Nigeria Railway narrow gauges’ advantage was, the Federal Ministry of Transport went ahead to place an advert for other ‘would be’ investors to compete with GE. At least this will, to a certain extent, give credibility to GE propriety know-how in railway engineering when they eventually get declared as the final winner. It appears from the minister’s utterances in the last one month that he is bent on giving out these refineries to the crude oil swap candidates without open bid, which he would have achieved on behalf of the Presidency to enhance the transparency obligation, with a minimum of three weeks advert in some local and international media. The invitation to bid would have closed by now. The choices are open bid or no open bid; this unnecessary debate could have been avoided.

Yes, “People keep mentioning Agip and Oando Plc but nobody has made the final decision on those”. This statement further portrays the bias for Oando and Agip. Are Agip and Oando the only repairer and operators in the world? Part of the minister’s statement says: “Agip and Oando are probably the front runners because they have put a lot of work on that but you are not in the technical committee”. What is the meaning of this in transparency? You are not a member of the technical committee as Mr. Minister of State for Petroleum and Chairman of the Board of NNPC but you are privileged to know that Agip and Oando have put a lot of work into this transaction. How does this help our transparency image?

My humble advice to Mr Kachikwu is for him to allow BPE/ NCP or ICRC to handle this transaction in the most transparent manner. Oando for example bidded along with others for Port Harcourt refinery in 2006/2007 and lost. Today any of these companies may win if they do their homework, but it must be through an open transparent competitive bidding. Finally in Kachikwu’s public declaration from Vienna, he said he is the Chair of the steering committee waiting for the technical committee to finish their work before the steering committee will then take it to the NNPC Board. If this process is not yet concluded, why then has he started talking about Oando or Agip taking Port Harcourt refineries and how then does his public utterances give confidence to other would be investors in any of the refineries?

In summary, this whole transaction appears to be a mockery of ourselves and our processes in Nigeria because we the ordinary citizens have no power to interrogate the minister’s actions and inactions. For him to use the statement ‘Hullabaloo about the transparency has no basis,’ is to say the least. dankonsult@yahoo.com

KACHIKWU CLAIMS THAT THE FEDERAL GOVERNMENT HAS DECIDED TO CONCESSION ALL REFINERIES BY AUGUST 2017 IS A WELCOME DECISION, BUT HE MUST ENSURE THAT THE PROCESS IS THROUGH AN OPEN BID COMPETITION