Tue | Jun 2, 2020

Wheatley: No money spent on Petrojam unit

Published:Tuesday | July 3, 2018 | 12:00 AMLivern Barrett/Senior Gleaner Writer

Embattled minister of Science and Technology Dr Andrew Wheatley yesterday insisted that no agreement had been signed and no money spent on the planned multimillion-dollar upgrade of the vacuum distillation unit (VDU) at the state-owned oil refinery Petrojam.

Wheatley, who the prime minister stripped of the energy portfolio effective today, was grilled for more than three hours by his opposition counterparts. Declaring himself a “responsible minister”, he repeatedly urged opposition lawmakers to await the findings of a probe by the Auditor General’s Department into alleged financial mismanagement at Petrojam.

Peter Bunting, the Central Manchester member of parliament, charged last month that Petrojam had engaged a Chinese firm that had offered to carry out the work on the VDU project at a cost of US$119 million, or US$40 million more than was proposed by a United States-based entity.

According to Bunting, this has resulted in a potential overrun of approximately J$5 billion.
But Wheatley dismissed this assertion, insisting that as at June 2018, negotiations were still under way. “No agreement has yet been signed and no money has been spent ... to undertake any work relating to the upgrade of the VDU at Petrojam.

Wheatley revealed that in April, the US-based engineering entity submitted a preliminary estimate that placed the cost of the VDU project at US$87.6 million, “plus or minus 30 per cent estimate accuracy”.

He said that this estimate was still being reviewed and validated to ensure that all pertinent factors are included and considered. 

“A review of the US engineering firm’s estimate unearthed some deficiencies which have been acknowledged by the firm,” Wheatley said.

Asked by Opposition Leader Dr Peter Phillips if he accepted responsibility for the state of affairs at the oil refinery, Wheatley said, “I am a responsible minister and we have to be careful about ministerial overreach.”

Meanwhile, the Jamaica Gasolene Retailers Association has joined calls for a strategic review of Petrojam’s management, operations, and long-term commercial viability.

It said that the prime minister’s move to establish a special enterprise team to conduct and oversee the organisational and strategic review of Petrojam could augur well for the industry should its members be drawn from the industry’s stakeholders.