Mr Friday Udoh, an economist, believes the federal government has been vindicated for completing the deal for the rehabilitation of four refineries around the country.
Udoh, the institute of chartered economists of Nigeria’s head, south-south coordinator, issued the recognition in a statement yesterday in Port Harcourt.
Remember that the federal government approved the rehabilitation of the country’s four refineries in March and August for a total cost of 2.984 billion dollars.
Some prominent Nigerians and MPs, however, slammed the announcement, calling the cost of the renovations “outrageous and highly inflated” and demanding the refineries be sold outright.
According to Udoh, the successful rehabilitation of the country’s dormant assets and refineries may generate more than $14.32 billion in annual revenue.
“We commend the government team involved in the negotiation, for their painstaking efforts that resulted in the successful contract closure of the nation’s four refineries.”
“The team closed the deal at about 21.05 per cent and 23.81 per cent cost per barrel capacity, which is less than the cost of a new plant-based on a global benchmark”.
According to NAN, “the global benchmark put a new plant per barrel capacity (PBC) at about N12.46 million (30,000 dollars) or above. “So, we commend the government for opting for the cheaper option of rehabilitating the Port Harcourt refinery at N2.97 million PBC (7,146 dollars) and N2.63 million (6,314 dollars) PBC for Warri and Kaduna refineries,” he said.
Udoh said: “This implies that the Port Harcourt refinery, for which the federal government approved 1.5 billion dollars for its rehabilitation” would cost 23.81 per cent less than the global benchmark cost for a new plant.
The economist further added that repairs of Warri and Kaduna refineries at a contract fee of 1.484 billion dollars now cost 21.05 per cent less than the rate for a new plant.
“So, the continued call for the sale of the nation’s refineries can derail the very essence of the programme, thus favouring the status quo.
“The reactivation of the refineries must be allowed to be concluded, and at completion outsourced to a reputable firm for at least two years before their privatisation”.