PHRC EPC Rehabilitation Contract Tender: Separating facts from fiction

Admin l Friday, December 11, 2020

 

ABUJA, Nigeria -The Management of the Nigerian National Petroleum Corporation (NNPC) wishes to condemn in the strongest term possible, the unwarranted attack on the well-conceived and appropriately articulated rehabilitation programme of the nation’s refineries by some nondescript characters under the questionable cognomen of “Buharites Solidarity Project” just to attract undue attention and relevance.

Dripping with prejudice, the group in the publication laboured albeit unsuccessfully to cast aspersion on the entire system in an  unmistakable attempt at disrupting the ongoing process for the award of the Engineering Procurement and Construction (EPC) contract for the rehabilitation of the Port Harcourt Refinery.

A cursory perusal of the said publication would reveal a poorly choreographed attempt to create a wedge of discord between the Management and Board of the NNPC by spewing a cocktail of illogical tales and obvious lies.

It is a matter of public knowledge that the Management of the Corporation under the able leadership of Mallam Mele Kyari has demonstrated an impeccable capacity for transparency and accountability in the operation of the National Oil Company.

Needless to highlight that the processes and procedures leading up to the bid cum tendering exercise for the award of the PHRC Rehabilitation EPC contract have not only remained in the realm of public scrutiny but have been heavily subjected to all statutory provisions as provided in the Public Procurement Act and with all relevant agencies of government carried along.

For the purpose of clarity and in deference to the over 200 million Nigerians who we regard as our shareholders, it is necessary to provide a timeline of activities below:

IN THE BEGINNING

• On October, 2016, NNPC sought approval to engage Original Refinery Builders (ORB), JGC Corporation, to rehabilitate the Port Harcourt Refining Company (PHRC) to optimal performance and commercial profitability.
• JGC Corporation instead proposed a joint execution approach and thus nominated Messrs Tecnimont SpA Italy (TCM) as its representatives on the Rehabilitation project.
• The submissions by the Messrs Technimont was extremely exorbitant as a result of that single sourcing strategy used. Therefore, NNPC sought and obtained Mr. President’s gracious approval on 22nd May, 2020, for the change of strategy from Original Refinery Builders (ORBs) to selective tendering of Global reputable Engineering Procurement and Construction (EPC) Companies including the ORBs to tender for the Refineries rehabilitation projects.
• The NNPC Tenders Board (NTB) on Friday, 19th June, 2020 approved the shortlist of Thirty (30) Global Reputable EPC companies including the ORBs; ranked by a globally recognized resource tool of the Refining and Petrochemical Middle East for the selective tendering of the EPC phase of PHRC Rehabilitation Project.

(https://www.refiningandpetrochemicalsme.com/lists/top-30-epc-contractors-2019).

 

THE TENDERS

• At the deadline of bid submission, Ten (10) companies responded to the Prequalification Request out of which Messrs. Linde Engineering & Messrs. Chiyoda Corporation declined to participate in the tendering process, while Messrs. DAEWOO Engineering and Construction only indicated interest as a Sub-Contractor.
• Only seven (7) EPC Companies made submissions and their bids were virtually opened and endorsed via Microsoft Teams/Zoom on Friday, 24th July, 2020 in the presence of the bidders, Infrastructure Concession and Regulatory Commission (ICRC), Bureau of Public Procurement (BPP), Nigeria Extractive Industries Transparency Initiative (NEITI) and other Internal NNPC stakeholders.
• The bids were, thereafter, evaluated in line with the approved evaluation criteria by the approved evaluation sub-committee (inclusive of external Representative) from the 27th to 29th July 2020. A cut-off mark of 75% was required to progress to the next stage of the tendering process.

THE PREQUALIFIED BIDDERS

• Subsequently NTB approved the 7 underlisted EPC companies to progress to the technical/Unpriced and commercial.
• TechnipFMC
• Saipem
• Marie Tecnimont
• Hyundai Engineering Company Ltd
• Petrofac
• Tecnicas Reuinidas
• Worley Parsons
• A Certificate of “No objection” to the Contract strategy was requested for and obtained from BPP on 14th August 2020.
• The Technical/Unpriced and priced commercial was published to the EPC companies on the 14th September 2020 with a bid closing deadline of 23rd November 2020.
• A total of 4 EPC companies declined further participation arising from their inability to submit competitive tenders due to a variety of reasons including challenges with their sub-contractors, the COVID-19 and the tight bid submission period.
• Following Clarification Meetings held with the bidders, the bid closing deadline was extended to 30th November 2020. Along the tendering process, 12 clarification requests were received from the bidders and responded to accordingly. However due to requests from the bidders for submission of alternative bids, the ITT document was amended to accommodate alternative bids and communicated to the bidders. Furthermore, the PHRC Technical Audit Report was shared to all the 7 EPC Companies as well.
• At the bid submission deadline of 30th November 2020, only one company, Messrs Technimont, submitted a proposal for the Refinery Rehabilitation.
• The submission of a proposal by just one company was considered not satisfactory by NNPC.

THE WAY FORWARD

• NNPC Management in line with the PPA 2007, approved the re-tender of the project to all the prequalified 7 EPC Companies with a bid submission deadline of 7 January, 2021 to enable NNPC have a competitive commercial offer; also to ensure transparency and fairness of the process and to all bidders.

From the foregoing, it could be seen that the insinuation that the entire contracting process was ‘dubious’ or ‘rigged in favour of Technimont’ was nothing but a figment of the imagination of the faceless ‘Buharites Solidarity Project’ which, clearly, lacks any understanding of the ongoing process and refused to educate themselves nor get an update on the current position of things; all in an attempt to malign the reputation of the Corporation and its able leadership.

The Corporation and its leadership will, however, not  be deterred and will remain focused in the pursuit of excellence and taking the Corporation to greater heights.