- DPR does not need a N35bn headquarters at this point in time
The Federal Executive Council (FEC) at its meeting of March 27, 2019, approved the sum of N1.4 billion for the design of a new 12-floor building to serve as headquarters of the Department of Petroleum Resources (DPR), the regulatory arm of the Ministry of Petroleum Resources (MPR). Briefing the press on the issue after the FEC meeting, Minister of State for Petroleum Resources, Dr Ibe Kachikwu, said the approval for the contract, which was awarded to Arteck Practice Limited, marked the commencement of the process of moving the DPR, currently situated in Lagos, to the Federal Capital Territory, Abuja.
Responding to questions as regards the perceived humongous cost of the building design, the minister noted that this was only two percent of the total projected cost of constructing the structure, which is N35 billion. Furthermore, he said, the bid by Arteck Practice Limited was the lowest, with the highest bid being about N3billion. In his words, “so if you look at that as a percentage of the work, it is absolutely insignificant, in international terms it is very, very justifiable, it is less than two percent”. Noting further that extensive parking facilities have been planned as part of the project, Kachikwu stressed that “I think because of the amount of work to be done and in line with international practice, it is, quite frankly, very reasonable”.
It is our view that the pertinent issue here is neither the insignificance of the design cost relative to the projected total cost of the project nor the acceptability of the pricing, using comparative international parameters. Rather, the question is whether this project should be a priority at this time given the parlous state of the country’s economy, which is still struggling to stabilise and attain sustainable growth after the recent recession, with the attendant deepening poverty, unemployment and inequality.
Confronted with the challenge of bridging the colossal infrastructure deficit that it inherited, as well as having to invest heavily in social intervention programmes to alleviate poverty, the President Muhammadu Buhari administration has had to resort to a high level of borrowing that has been a cause of concern in some quarters. Most states find it difficult to pay workers’ salaries or pensioners’ entitlements, with the obvious implication that the provision of infrastructure and social services across the country suffers badly.
In that case, should prestige projects like the proposed DPR headquarters be a priority for the country now? We do not think so. There should be absolutely no hurry about moving the DPR to Abuja. Given the advancement in modern telecommunications, there is no reason why the DPR cannot operate seamlessly with other agencies in the ministry from its base in Lagos.
Dr Kachikwu said the MPR is working towards getting the DPR to become independent and self-financing so that it no longer depends on federal budgeting, a financially autonomous status he says is now the case with a number of the ministry’s other agencies. But why should the DPR have to move to Abuja before being able to perform its income generating role for the ministry? If the organisation is unable to realise the funds projected for it currently, what magic will make it capable of doing so simply by moving to Abuja?
A more urgent priority for the DPR should be to invest in enhancing its technical capacity to effectively supervise and regulate the multinational oil corporations that have allegedly over the years exploited the regulatory body’s operational inadequacies to rip off the country. Achieving that objective should not necessitate its movement to Abuja. Furthermore, Kachikwu argues that the funding for the design of the building would come from the DPR itself and not out of the federal budget. This is certainly no reason to expend such fund frivolously without taking cognisance of the country’s current harsh economic climate.