Efforts by the Federal Government to close the infrastructure gap in the oil and gas sector as regards the provision of pipelines, refineries, storage facilities among others, are being undermined by long contract cycles sometimes running into several years, The Guardian reports.
According to experts, about N18 trillion ($50 billion) is required to close the gap. The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu has many times pledged to reduce the tendering process to six months. It was however learnt that it takes up to two years for a contract to be finalised. Shorter contract cycles would have saved revenue lost to inflationary trends as the closure of contract negotiation takes a longer time, forcing contractors to seek revenue.
The underachievement in project performance, lengthy delays and financial loss in terms of oil and gas projects have therefore, been attributed to the current tendering process in the country. Experts list some of the causes of the long tendering process as a lack of an effective strategic plan for a tendering system, an inappropriate and bureaucratic tendering process, an unscheduled tendering of a huge number of projects by both public and private sectors, failed projects and low quality of project output.
Due to long delays contracts costs grow by more than 100 per cent while the Nigerian National Petroleum Corporation (NNPC) would still want to insist that the job be executed based on the old price. Consequently, the job suffers setbacks and it would take more than three years to be executed at very ridiculously high costs.topics from