A partial payment of $98m and N17.2bn is being prepared by the Federal Government for the ongoing rehabilitation of the Port Harcourt Refining Company.
The government had made an initial payment of $194m, being the 15 per cent advance payment required for the rehabilitation of the facility, to Tecnimont SpA of Italy, according to The Punch report.
A report from the Nigerian National Petroleum Company (NNPC) on the financial status update of the rehabilitation revealed that the project was financed by an equity contribution by the sponsor and loan by lenders (AfreximBank).
The report indicated that the Engineering, Procurement, Construction, Installation and Commissioning contract price remained at $1.397bn lump sum with $162m as provisional sum, bringing the total project cost to $1.559bn, as approved by the Federal Executive Council.
The Federal Executive Council approved the contract for the EPCIC of the Port Harcourt refinery on March 17, 2021, and work on the facility commenced last year.
The council approved the award of PHRC EPCIC contract to Tecnimont in March, and the contract agreement was signed on April 6, 2021, as the report seen in Abuja on Friday indicated that additional funds had been processed to ensure the continued rehabilitation of the plant.
The report said, “Advance payment of 15 per cent ($194m with 70 per cent in US dollars and 30 per cent in naira) has been paid to Tecnimont as a contractual requirement.
“Advance payment guarantee of $300m has been provided by Tecnimont. Milestone One (10 per cent) payment ($98m and N17.2bn) has been processed for payment. The project has 14 payment milestones with deliverables attached.”
On the status of the rehabilitation, the report said the overall project cumulative planned progress was 10.7 per cent, but noted that actual cumulative progress was 6.3 per cent.
“Contractor is to issue a mitigation plan to address this variance and to ensure that the project is completed within schedule,” the NNPC report said.
Some challenges were identified by the PHRC management in the report. It said the COVID-19 outbreak with the current Omicron variant had created travel disruptions and supply chain challenges worldwide.
Another challenge was the concerns on the East-West Road and the loss of project man-hours on the road associated with movement to and from the refinery.
The report, however, maintained that the project completion period for the entire rehabilitation work was 44 months from effective date, which was April 6, 2021.
It said the contractor was complying with the provisions of the Nigerian Content Development Act, adding that there was active participation of Nigerian companies as sub-contractors in the project.
