Financiers of Abuja-Kaduna-Kano pipeline have pulled out of the project, citing alleged 570 per cent inflated contract sum, far above global threshold.
It was gathered that the companies Infrastructure and Commercial Bank of China (ICBC), Infrastructure Bank of China and China Export Credit Agency (SINOSURE) were to provide 85 percent or $2.38 billion funding requirement. Their Nigerian counterparts, Oilserve and Oando, are to shoulder the balance 15 percent, or $420 million.
With this development, the project has been stalled, as there is no funding to cover cost of the second and third legs from Abuja to Kaduna and Kaduna to Kano.
It was learnt that the Nigerian National Petroleum Corporation Limited, (NNPCL), through the Nigeria Gas Transport Processing Company, (NGTPC), had attempted to bridge the funding gap, but lacked the needed liquidity.
Indeed, NGTPC projected that Nigeria required 5,000 kilometres of gas pipelines as transmission lines to transport the product through feeder lines, from gathering lines to distribution centres.
Currently, the country has less than 1,000 kilometres, a factor responsible for the low power generation currently 10,000 megawatts and a contributor to delayed off-take by industrial and commercial plants, especially in northern part of Nigeria.
The Ajaokuta-Kaduna-Kano 614 kilometres gas pipeline, identified as one of the eight major transmission infrastructure critical for development, is riddled with inconsistencies for several reasons.
Companies that are involved in gas transmission and distribution are subject to Corporate Income Tax exemption for a period of five years cumulatively, as well as possible waiver on imports through the Industrial Incentives Act.
Industry observers have said it is possible that the equipment imported into Nigeria might have led to revenue losses for government and reduced the cost of Engineering, Procurement and Construction, (EPC).
