Nigeria plans $500m new satelites
Spends N1.185tr on petrol subsidy in three years
From Azimazi Momoh Jimoh, Abuja

THE Senate Committee on Public Accounts was told yesterday that although Nigeria was yet to replace the $251 million Nigeria Communications Satellite (NIGCOMSAT) (1), which got lost in orbit last November, she was set to launch two other satellites worth $500 million.



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Also, the Petroleum Products Pricing Regulatory Agency, (PPPRA) has put the total amount of money spent on petrol subsidy by the Federal Government in the last three years at N1.185 trillion.

Briefing the committee on details of the NIGCOMSAT projects at the National Assembly, the Managing Director of NIGCOMSAT, Tima Ahmed Rufai, said that of the $251 million spent to launch NIGCOMSAT (1), $200 million was borrowed from the Export-Import Bank (EXIM) of China while $51 million was paid from Nigeria through appropriation.

But the committee, led by Senator Ahmed Lawan, expressed shock that the same company that was awarded the contract for launching the lost NIGCOMSAT (1), - the China Great Wall Industrial Company (CGWIC) - was also to be awarded the contract for launching the $500 million NIGCOMSAT (2 and 3).

Rufai also told the committee that the initial plan was to use NIGCOMSAT (1) for experimental purposes only, but that the plan was changed because of the need to exploit the market provided by the telecommunications industry in Nigeria.

According to the NIGCOMSAT managing director, the quest to launch and operate the satellite on commercial basis led to the failure to launch another satellite as back-up.

This situation he said, became worsen things for Nigeria as soon as it was discovered that NIGCOMSAT (1) had been lost.

Rufai however stated that the lost satellite would be replaced by the Chinese company because there was an agreement to that effect. But the re-launch would not take place until late 2010 or early in 2011 when all arrangements would have been put in place to that effect.

Explanations on the insurance for the project were however found not to be satisfactory by the committee as it lamented the non-inclusion of the business and financial benefits that Nigeria would have made from NIGCOMSAT (1) in the insurance. Rufai had informed the committee that only the assets were insured.

Rufai said three options were considered in respect of the $500 million NIGCOMSAT (2 and 3) before the decision was taken to award their contracts to CGWIC, pointing out that government could choose to fund the project alone or give approval that some Nigerian banks could come together to counter-guarantee any loan that would be taken from China for the launch of the two satellites.

The third option according to Rufai, was for NIGCOMSAT to be completely privatised so that it could source its funds from anywhere.

The Acting Executive Secretary of PPPRA, Wole Adamolekun told the committee that the appropriate price of petrol should be N67.28, adding that government was subsidising the product by N2.

Adamolekun said government paid N276.2 billion in 2006, of which the Nigeria National Petroleum Corporation (NNPC) got N242.6 billion while oil marketers shared N19.121 billion.

According to him, the Federal Government paid N278 billion as subsidy in 2007, of which the NNPC got N2.7billion while major and independent marketers got N51.388 billion.

"In 2008, the subsidy was N633.192 billion with the NNPC being paid N270.495 billion and major and independent marketers sharing N260.8 bilion", he said.

Adamolekun noted that in those three years, NNPC was paid N851.5 billion while the major and independent marketers shared N330.6billion to bring the total amount spent on subsidy to N1.185 trillion.

"In 2007, government budgeted N100 billion and we projected N300 billion but at the end of the year, N278billion was the total expenditure for subsidy by government."

He said though no budgetary provision was made by government for subsidy in 2008, the sum of N370 billion was expended by government

He said that because of the dwindling fortune of oil in the international market, the accurate price of petrol per litre last year was to be N63.

He said: "by November last year, we had a difference of N7 and by December, it was about N12 difference and now, what we have is N67.28 per litre. In November, the landing cost was N50 apart from the margin of N13".

Adamolekun told the committee that though the price of kerosene stood at N50 per litre, "the real price is N83 with the government subsidising by N13."

http://odili.net/news/source/2009/feb/3/20.html

earTHMama:

Adamolekun told the committee that though the price[b] of kerosene stood at N50 per litre, "the real price is N83 with the government subsidising by N13.[/b]"

Government Maths or typo error?

Yes na. 50+13= 83, abi no be wetin your calculator dey show? You wan make our politicians begin write thesis again for algebra?

Are they really serious with this $500m thing,
i hope they are not.

angry sad crying