REVEALED; Yar’Adua cancelled refinery sale over questionable circumstances under Obasanjo – Falana

REVEALED; Yar’Adua cancelled refinery sale over questionable circumstances under Obasanjo – Falana

Human rights lawyer and Senior Advocate of Nigeria (SAN), Femi Falana, has weighed in on the federal government’s decision to cancel the Public-Private Partnership (PPP) arrangement for the management of the Port Harcourt, Warri, and Kaduna refineries, initially approved during the administration of former President Olusegun Obasanjo in 2007.

Falana pointed to questionable circumstances surrounding the deal, which he argues lacked transparency and due process.

In response to a statement made by Obasanjo on Thursday regarding how his successor, the late President Umaru Musa Yar’Adua, refunded $750 million to a consortium originally contracted to manage the refineries, Falana sharply criticised the deal’s integrity.

According to the activist, the PPP arrangement was flawed from the outset and was marked by a lack of openness.

Speaking on behalf of the Alliance on Surviving COVID and Beyond (ASCAB), Falana recalled how Obasanjo had allegedly bypassed the National Council on Privatisation (NCP), led at the time by Vice President Atiku Abubakar.

Falana accused Obasanjo of taking unilateral control over the privatisation process, which included the controversial sale and management of several public enterprises, in violation of the Privatisation and Commercialisation Act.

The NCP, a body created to oversee the privatisation of state assets, was sidelined, according to Falana, as Obasanjo pursued the deal without the proper checks and balances that the law mandates.

This, he suggests, contributed to the controversial nature of the refinery PPP deal, which has been a source of public debate for years.

The cancellation of the deal marks another chapter in the ongoing controversy surrounding Nigeria’s privatisation efforts, with many questioning the transparency and accountability of past deals.

He said: “On May 17, 2007, President Obasanjo sold a 51% stake in the Port Harcourt refinery to Bluestar Oil for US$561 million.

“In another transaction that took place on  May 28, 2007, President Obasanjo sold  51% shares in Kaduna Refinery to Bluestar Oil for $160 million.

“Bluestar Oil was a consortium of three domestic companies, including Dangote Oil, Zenon Oil and Transcop.
“Before the deal, President Obasanjo had acquired large shares in Transcorp through ‘blind trust.’
“Many interest groups in the country questioned the legal validity and moral propriety of the sales as they were consummated in the last days of the Obasanjo administration.

“The two powerful trade unions in the oil industry —the  National Union of Petroleum and Natural Gas Workers (NUPENG) and the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) kicked against the privatisation of the two refineries on grounds of conflict of interest and lack of due process.

“They also alleged that the nation had been shortchanged as the shares acquired in the Port Harcourt refinery for $516 million were worth US$5 billion.

“Convinced that the deals were not in the national interest, both unions proceeded on a 4-day strike that almost paralysed the Nigerian economy in June 2007.

“The strike was called off based on the assurance of the federal government to the effect that the deals would be fully investigated.

“Upon the conclusion of the investigation by the federal government, the purported privatisation of the Port Harcourt and Kaduna refineries was cancelled by President Umaru Yar’adua.

“It is on record that the cancellation of the privatisation was not challenged in any court as it was carried out contrary to the letter and spirit of the Privatisation and Commercialisation Act.”