By Straightnews
The sale saga of three refineries to Aliko Dangote by the administration of Nigeria’s former President Olusegun Obasanjo in 2007 has been resurrected.
Obasanjo stated that the Nigerian National Petroleum Corporation (NNPC), now the Nigerian National Petroleum Company Limited (NNPCL), turned down a $750 million proposal from billionaire Aliko Dangote in 2007 to manage three of the country’s refineries.
In an interview with Channels Television last Thursday, Obasanjo revealed that the offer covered the Port Harcourt, Warri, and Kaduna refineries and was intended as a Public–Private Partnership (PPP) arrangement to revive and operate the facilities.
Despite NNPC’s acknowledged inability to manage the refineries effectively, it rejected the proposal, he said.
Also read: TV Personality Doubts resumption of work at Warri Refinery
“It was after that, Aliko got a team together, and they paid $750 million to take part in PPP in running the refineries,” Obasanjo stated.
“My successor refunded their money, and I went to him and told him what transpired. He said NNPC wanted the refineries and could run them. I said, but you know they cannot run it.”
The former president explained that Dangote’s proposal came after Shell declined an earlier request to manage the refineries, citing corruption, poor maintenance, and low production output as reasons.
Obasanjo admitted that Shell’s assessment was credible. “If a company like Shell rejected my offer based on their reasons, I will believe them,” he said.
Obasanjo expressed regret over the financial mismanagement that followed. “I was told not too long ago that since that time, more than $2 billion has been squandered on the refineries, and they still will not work,” he lamented.
He also questioned the logic behind NNPCL’s current collaboration with Dangote’s private refinery project, which is poised to revolutionize Nigeria’s oil industry.
“Not only will he make it [his refinery] work, but he will also make it deliver,” Obasanjo remarked.
Using an analogy, he criticized the handling of Nigeria’s refineries.
“Whether we announce our own government refineries working or not working, it is like a man who plants 100 heaps of yam and says he planted 200 heaps. After he harvests 100 heaps of yam, he will also harvest 100 heaps of lies.”
NNPCL invites Obasanjo to rehabilitated Port Harcourt Refinery
Based on the allegation, the Nigerian National Petroleum Company Limited (NNPCL) has invited ex-President Olusegun Obasanjo to tour the Port Harcourt Refinery.
According to a statement on Thursday, the NNPCL said the move was for Obasanjo to verify the operational status of the oil processing facility in Rivers State.
In an interview with Channels Television, Obasanjo questioned the operational capacity of the Port Harcourt Refinery which recently came on stream.
However, the NNPCL listed its achievements and asked Obasanjo to tour the facility.
“We extend an invitation to our esteemed former president to join us in this historic journey. His wisdom and experience are invaluable, and we deeply appreciate his insights and guidance, which will always be welcomed and cherished,” the NNPCL said.
“Additionally, we warmly invite President Obasanjo to tour the rehabilitated refineries and witness firsthand the progress made under the leadership of NNPC Limited.
“We remain grateful for his enduring contributions to Nigeria’s development and are committed to building a brighter, more prosperous future for our nation.”
According to NNPCL’s Chief Corporate Communications Officer Olufemi Soneye, the organisation did not only carry out turnaround maintenance on the plant.
Soneye said the NNPCL embarked on a complete overhaul of the refinery.
“This is not the typical Turnaround Maintenance (TAM) of the past but a comprehensive overhaul designed to meet world-class standards. Similar efforts are underway at the old Port Harcourt Refinery and Kaduna Refinery, ensuring these facilities are enhanced and maintained to global standards for sustainable operation,” he said.
“This progress has been driven by the visionary leadership of the NNPC Limited board and the management team led by GCEO Mele Kyari, alongside President Bola Ahmed Tinubu’s transformative policies in the energy sector. Together, they have achieved unprecedented milestones, setting NNPC Limited on a path to redefine energy security for Nigeria while positioning the company as a leader on the global energy stage.”
How Obasanjo, Atiku privatized industries
Recall that ex-President Obasanjo and his deputy, Atiku Abubakar, were accused to have influenced the sales of government enterprises to their friends, Mallam Nasir El Rufai, a former Director-General of the Bureau of Public Enterprises (BPE), said.
Mallam El-Rufai made the revelations while testifying before an ad-hoc Senate committee investigating the privatisation and commercialization of government businesses from 1999 till date.
He told the committee that when he ran the Bureau, Obasanjo and Atiku contacted him at different times to influence the sale of government companies to their cronies but that he turned them down each time.
“The president and I were always quarrelling over issues of privatisation,” Mallam El-Rufai said. “Each time I told him we have a process … that they should advise their friends to be the highest bidder.”
He added that former President Obasanjo blocked the sale of Nigeria Airways because of a personal interest he formed based on stories the then aviation minister, Kema Chikwe, was telling him.
Although Mallam El-Rufai hailed the idea of the privatisation programme, he blamed its failure after he left on government interference in the process. He said that under his leadership, the agency handled 33 transactions, closed 23 and that only one of the transactions he handled failed.
He further told the committee that the privatisation program saved Nigeria N265 billion annually. He said that between 1970 and 1999, Nigeria spent over $100 billion building companies but only got 0.5 percent of that amount back as return on investment.
He also said that Obasanjo ignored his recommendation of a successor and instead, appointed Julius Bala who was later investigated for fraud three months before the end of his stint at BPE. His described his successors as “cranky businessmen” who rather than being technically sound in privatisation issues, were only interested in making money.
Mallam El-Rufai’s claims are corroborated by testimonies of Chris Anyanwu, who was also a Director General of the bureau. Earlier, Mr. Anyanwu had told the Senate committee that “some individuals,” whom he described as “powerful,” influenced the decisions of both the bureau and the Infrastructure Concession Regulatory commission.
At an earlier hearing, Chief Obasanjo was also accused of having taking a unilateral decision—ignoring recommendations from BPE and due process—to sell Delta Steel Company to Global Infrastructure instead of the winner of the bidding process, BUA Group.
The Senate committee has since the beginning of the week been investigating the sale of over 100 government enterprises. It has taken testimonies from benefitting investors as well as both current and former heads of the bureau. It is however unclear if the committee will invite Obasanjo to testify before it.
In December 2017, the Socio-Economic Rights and Accountability Project, SERAP, sent an open letter to President Muhammadu Buhari requesting him to use his “good offices and leadership position to revisit and refer the allegations of corruption and abuse of process in the privatisation of public enterprises in Nigeria between 1999—2011 to the Economic and Financial Crimes Commission (EFCC) and the Independent Corrupt Practices and Other Related Offences Commission (ICPC) for further investigation, and if there is relevant and sufficient admissible evidence, for anyone suspected to be involved to face prosecution.”
The group urged Mr. Buhari to “reform the Bureau of Public Enterprise (BPE) to remove opportunities for corruption in privatisation process, and to instruct the EFCC and ICPC to ensure the recovery of proceeds of corruption. We request that you take the steps within 14 days of the receipt and/or publication of this letter, failing which SERAP will institute legal proceedings to compel your government to act in the public interest.”
In the letter dated December 1 and signed by SERAP executive director, Adetokunbo Mumuni, the organisation said: “SERAP has obtained and carefully read the full report of the Senate Ad-Hoc Committee on Investigation of the Privatisation and Commercialisation Activities of the Bureau of Public Enterprise (BPE) from 1999 to 2011, which contains damaging allegations of corruption, presidential interference, and abuse of due process in the selection of core investor, valuation of public enterprises, pricing of shares/assets, determination of workers terminal benefits, and use of proceeds of privatisation.”
According to the organisation, “Many cases of presidential directives/interference during the period under review (1999-2011) affected the process of core investor selection. The BPE was negligent and ineffective in monitoring of privatised companies. In some cases, BPE never monitored the companies for the entire lock-in period and in other cases their reports were complete opposite of what was on the ground.”
The letter copied to Vice President Yemi Osinbajo, who is also the chair of the National Council on Privatization (NCP), read in part: “It is in the public interest that any sales of public assets will get the best value but the Senate report shows exactly the opposite.
By revisiting the privatisation process and referring the allegations of corruption documented in the report to the EFCC and ICPC, your government would be demonstrating that it’s willing and able to fight impunity of perpetrators of corruption, which is responsible for legacy of grand corruption and abuse of office in the country.”
“Specifically, the committee among others found that: A total sum of N301 billion was realised as proceeds of privatisation from 1999 to 2011. N900 million of that was used as loan to Nigeria Re-insurance Plc for recapitalization, in violation of section 19(2) of the Public Enterprises (Privatisation and Commercialisation) Act 1999. Folio Communications Limited pledged the assets of Daily Times Nigeria Plc to obtain loan from bank(s) and utilized the loan to pay for the share of the company.”
“Core investor converted the premises of Volkswagen Nigeria Limited into bonded warehouses for storage of contrabands mainly rice, vegetable oils, fertilizer, but was not reported by the BPE. Former Director-General of BPE, Mrs Irene Nkechi Chigbue sought and received direct approvals of former President Olusegun Obasanjo for many privatisation transactions, in violation of Section 11 of the Public Enterprise Act and the Bureau Procedure Manual.”
“Aluminium Smelter Company of Nigeria (ALSCON)—BFIG Corporation of the USA was declared preferred bidder and winner with a bid of $410 million after going through the bidding process but was denied its legal right to negotiate terms, sign Share Purchase Agreement and pay 10 per cent initial payment. However, BPE approved a Willing Seller Willing Buyer to Rusal/Dayson for $250 million and cancelled BFIG Corporation $410 million offer. Aluminium Smelter Company of Nigeria was grossly undervalued, having being built for $3.2 billion and was privatized by BPE for $130 million excluding $120 million Imo River Channel Dredging cost from the purchase consideration.”
“Michelle Nigeria Limited emerged as the preferred bidder of the Apapa Port Complex Terminal “C” but it was given to ENL Consortium Limited which already had one, in breach of Ground Rule 7, which states: “No single bidder/concessionaire would be allowed to have more than one concession in Apapa Port Complex.” BPE reversed the process instead and gave Terminal “C” to ENL Consortium Ltd without cancelling the Michelle Nigeria Limited offer, in breach of the core investor selection process.”
“Former Director General of BPE Bolanle Onagoruwa abused the approval process in the sale of 5 per cent Federal Government’s residual shares in EPCL to Indorama Group, in contravention of the First Schedule of the Public Enterprises (Privatisation and Commercialisation) Act 1999. Indorama Group has already acquired the maximum 75 per cent shares reserved for core investor in EPCL as provided in the First Schedule Section 1(1) no. 6 of the Act.
“The share purchase agreement created an escrow account into which all the monies shall be paid. However, the escrow account was not opened. The enterprise was handed over to the purchaser without payment of the purchase consideration. Former president Olusegun Obasanjo approved the addendum, in violation of the Privatisation Act and the share purchase agreement.”
“All former Directors-General of BPE (Nasir el-Rufai-1999-2003; Julius Baba-2003-2004; Irene Chigbue-2004-2009; Chris Anyanwu-2009-2010; and Bolanle Onagoruwa-2010-2012) established several accounts with various commercial banks, in violation of Section 19(1) of the Public Enterprises (Privatisation and Commercialisation) Act 1999.”
“All former Directors-General used privatisation proceeds to pay transaction expenses, consultancy fees and staff terminal benefits without appropriation by the National Assembly, in violation of Section 19(2) of the Public Enterprises Act. Former Director-General of BPE Mrs Irene Chigbue used privatisation proceeds to execute capital projects (Office extension) in 2007 in violation of this provision.”
“The process of privatisation of public enterprises was totally set aside in the concession to Global Infrastructure Holdings Limited and Global Infrastructure Nigeria Limited by the then Federal Ministry of Power and Steel Development in breach of Section 11(c) of thee Public Enterprises Act. BPE later converted the Concession Agreement to a core investor agreement, in breach of the transaction process.”
“The N1.9 billion Privatisation Proceeds loaned for recapitalisation of Nigeria Re-insurance Plc and Nicon Insurance Plc was not used for that purpose and the BPE is yet to recover the money. Contract for dredging Imo River Channel was overvalued at $120m by BPE. This would cost less than $100 today (2011). 43 enterprises of 122 privatised companies are not performing.”
“The core investor of Transcorp Hilton Hotel agreed among others to within 3 years construct a shopping mall within the Hotel grounds; and construct short/long stay serviced apartments on the available land within the hotel premises. However, to date the core investor has failed to deliver in breach of clause 8.4 of the share purchase agreement and BPE also failed to apply sanctions as provided in clause 10.”
“The core investor of Abuja International Hotels Limited (Nicon Luxury Hotel) agreed to invest at least additional N2 billion to complete the furnishing of the hotel and provision of ancillary services to a 5-year deluxe status within 9 months. However, the core investor has failed to comply, in violation of clause 7.3 of the share purchase agreement and BPE has failed to apply sanctions as provided in clause 9. Also, the core investor of Sheraton Hotel and Towers, Abuja has failed to comply with the share purchase agreement, in violation of clause 8.6 and the BPE has failed to apply sanctions as provided in clause 9.”
“The core investor in Nigerian Cement Company Plc (Nigercem) has woefully failed to fulfil its technical and financial obligations several years after privatisation. The core investor in Delta Steel Company agreed to invest $100.65 million within 15 months but no evidence of such investment. The Delta Steel Township 1 Housing Estate is comprised of 4,500 housing units; 1,109 unauthorised plots were illegally sold/allocated by the BPE.”
“Julius Bala should be investigated by anti-graft agencies for giving approval to Folio Communication Limited for the illegal sale of assets of Daily Times Nigeria Plc. Ms Bolanle Onagoruwa showed gross incompetence in the management of the BPE and she illegally and fraudulently sold 5 per cent Federal Government residual shares in Eleme Petrochemicals Company Limited (EPCL).”
“Poor privatisation monitoring, skewed share purchase agreements in favour of investors in many instances and abuse of process in utilizing privatisation proceeds further marred the privatisation programme. Some of the share purchase agreements were skewed in favour of private investors against public interests. In the Nicon Insurance Plc share purchase agreement, the BPE deliberately removed the protective clause on sales of assets without BPE’s written consent within the first 5 years.”
“Bid bonds are usually refunded to bidders after closure of bidding. In the case of crystallized bid bonds transaction expenses are deducted before refunds. BPE abused this process in the sense that National Council on Privatization (NCP) approvals for funds are kept for years without payment.”
“Terminal benefits of workers of companies slated for privatisation are usually computed by management or by an appointed BPE Actuarial Consultant before payment. The processes are often abused by BPE. In NITEL, workers were forced to accept less than 5 years pension buy-out where it was agreed earlier for 5 years. BPE owed workers in Delta Steel Company (N5.2 billion); and ALSCON (N2.7 billion). In Federal Superphosphate Fertilizer Company the Actuarist computed and recommended full payment of N457 million but BPE paid only N383 million leaving a difference of N73 million.”
“Workers of National Steel Raw Materials Exploration Agency, Kaduna are owed gratuities of N150 by Nicon Insurance Plc. Workers often benefit from allotments of shares in companies undergoing privatisation on request. The reserve shares are however not granted on free carriage in compliance with provisions of the First Schedule Section 1(1) in line with Nigeria Individuals Participation as Percentage Post Privatisation.
Out of the 122 privatised public enterprises only 14 enterprises had shares reserved for workers. 11,000 jobs were lost in Nitel/M-Tel; 2000 jobs were in Daily Times; and 1000 jobs were lost in ALSCON.”
