Chika Amanze-Nwachuku
18 July 2007
Lagos — A panel has been set up by the World Bank, to investigate possible violations of its funding rules for the West African Gas Pipeline Project (WAGP), a regional project between Nigeria and Republics of Benin, Togo and Ghana.
The cost of the pipeline project, which is one of West Africa's most significant regional energy projects, was put at $400 million in August 1999, when the joint venture agreement was signed, but investigation revealed that the project may gulp about $590 million.
The World Bank was said to have instituted an investigation panel, following allegations that the project has violated conditions attached to its funding as regards the safety, social and economic impact of the pipeline.
Specifically, the panel has been asked to look into complaint lodged with the World Bank in April 2006, by 12 local communities close to the planned route of the pipeline. The bank alleged discrepancies in information about the project provided by Chevron and the local communities.
It was further alleged that disagreements arose between the project backers and the community about the source of pollution, alleged damage to fisheries and valuation, compensation procedures, safety measures on the pipeline, as well as the projects failure to reduce gas flaring at local gas production sites.
The communities, in their original complaints wrote: "we believe that the West-African Gas Pipeline Project, if executed, would do irreparable damage to the land and consequently, destroy livelihoods of the 12 communities."
The Project was expected to supply about 250mmscf/d of natural gas for sale to Ghana, Benin, Togo. The first phase of the project was commissioned in April.
In a joint venture agreement signed on August 16, 1999, Chevron Nigeria limited was appointed project manager.
The agreement established a consortium of six energy resource companies to develop the West African Gas Pipeline, outlines corporate structure of the joint venture, and a programme to expedite the technical and commercial activities required to complete pipeline development by 2002
In addition to delivering much needed energy, it is envisioned that the project will significantly contribute to the economies of participating nations through the creation of jobs and low-cost fuel for new industrial and commercial development ventures.
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