I came across a publication in The Guardian claiming there were fraud allegations in the Ajaokuta-Kaduna-Kano (AKK) gas pipeline project.
First of all, I would like to remind The Guardian that the AKK pipeline project has a total cost of $2.5 billion; it was reviewed down from the $2.8 billion initially approved by the Federal Executive Council in 2018.
It is absurd that The Guardian could claim that the initial financiers exited following the inflation of the contract to the tune of 570 percent!
I wondered how they arrived at the ridiculous 570 percent!
It is laughable that The Guardian could say that the AKK Gas Pipeline project “failed on financial prudence and integrity based on international best practices.”
The newspaper went further to say, “Similar projects around the world cost far less, as reported. The report said the 693-kilometer Yucatan Peninsula gas pipeline in Mexico cost $266 million. Also, the 460-kilometer Export La Moran Pipeline built between Argentina and Chile cost $360 million, while the 3,700-kilometre Export Pipeline between Bolivia and Sao Paulo cost $1.8 billion.”
What is the GDP of Mexico, Argentina, Chile, Bolivia, and Sao Paulo compared to Nigeria? What is the level of insecurity in those countries compared to Nigeria? Did Mexico, Argentina, Chile, Bolivia, and Sao Paolo borrow money for such projects, or was it funded internally? These and many other questions are what I am expecting answers to from The Guardian, which has turned into a project finance expert.
The AKK project is a crucial one. Nigerians may wish to know that its importance is underpinned by the fact that for us to develop as a country, we need energy, and the most abundant source of energy in Nigeria is gas, and fortunately for us, we have a lot of gas reserves in the country.
My happiness is that during the NNPC Limited management tour of some of its project sites in Kogi on Monday, Mele Kyari said the company would continue to fund the massive project, which was delivered in phases and has been active even though it did not have third-party finance for the project.
“So far, NNPC Ltd. has funded over 1.1 billion dollars on the project, and to date, none of the project activities have been abandoned as reported, and we reassure all stakeholders that we have a line of sight to project delivery on schedule,” Kyari said.
Despite the initial financiers’ exit, NNPC Limited remains highly committed to the delivery of strategic national infrastructure projects through responsive project delivery.
China was indeed approached, negotiations were made, and NNPCL and the federal government met all the conditions to be able to secure the loan for the project.
Unfortunately, China couldn’t get the funding as expected even though all the requirements from NNPC Limited, the owners of the project, and from the federal government, including the sovereign guarantee, which the president signed and made available, were met.
Irrespective of the exit of the financiers, NNPC Limited has moved in to make sure that funding does not create a problem for the project.
NNPC Limited has been funding this project from inception to navigate the negative impact of the non-availability of funding from China.
There is no doubt that the AKK Gas Project will be finalized and delivered this year as work is fully ongoing, as can be confirmed by the GCEO of NNPC Limited, Mele Kyari, during his tour.
Despite widespread misgivings that it had been scuttled by China’s decision to pull out the funding, the NNPC Limited has essentially funded the project since the Chinese left.
AKK’s objective is to pump natural gas from Niger Delta fields entering Ajaokuta from Oben, in Nigeria’s mid-west, to Kano.
There is also the probability that the gas will continue from Kano to Algeria, en route to Europe, in a subsequent project named the Trans Sahara Gas Pipeline.
Adewole Kehinde is an energy expert and public affairs analyst based in Abuja. He can be reached via kennyadewole@gmail.com or 08166240846.
