The Nigerian National Petroleum Corporation (NNPC) has dismissed the recent allegations that the Ajaokuta-Kaduna-Kano (AKK) Gas Pipeline Project was inflated to $1.527 billion. The Corporation says the allegations are false, baseless and unfounded.

The Company said the allegations caught the attention of the Bureau for Public Procurement (BPP) which rejected the speculative analysis of the online publication as false and said it does not portray the position of the BPP’s report.

The Corporation said it is considering taking legal actions against the online medium and the collaborators of the story. It explained that BPP 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, adding that it was on that basis that BPP confirmed and granted a certificate of no objection dated August 11, 2017.

The Corporation said the AKK project underwent a transparent and open competitive tender process that resulted in the emergence of the most competitive bidders, wondering how a competitive tender process could be inflated. It 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).

It said there were several key stakeholders to ensure transparency in the implementation of the project. They are the NNPC, Ministry of Finance, Ministry of Justice, the Central Bank, Debt Management Office, Nigeria Extractive Industries Transparency Initiative (NEITI) and representatives from the Presidency.

The following stringent due process internal and external reviews which the pipeline project was subjected to are cited below:

Conduct of project bankability study, at project’s conception in 2013, undertaken by Standard Chartered Bank to confirm appetite for attracting financing from international community

• 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
• Advertisement of the project in both local and foreign print media in 2013. After completion of the FEED study by ILF in 2015, the prequalified bidders were issued tender documents
• Competitive tendering and evaluation of the bids by both NNPC and transaction advisers, Alpine and also by a team from ICRC
• Extensive review of the project design and the final cost in 2017 by the BPP, culminating in the issuance of a Certificate of No Objection in August 2017
• Receipt of due process certificates for the project, including Original Business Case and Final Business Case from ICRC and Local Content Compliance Certificate from Nigerian Content Development and Management Board (NCDMB) before presenting to the Federal Executive Council (FEC) for approval in December 2017
• 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, leading to further cut of $300million of the contract value under the Mele Kyari-led NNPC Management
• Formation of a Steering Committee in July 2020 by Mallam

To read the complete release signed by the Group General Manager, Dr Kennie Obateru, click here