The lucrative pilotage agreement between the Nigeria Ports Authority (NPA) and INTELS Nigeria Limited was terminated by the NPA last week, citing a breach of the laws in the 2010 agreement.
Bone of contention:
- All ships of 35 metres overall length or greater are mandated to pay a pilotage fee unless they possess a valid Pilotage Exemption Certificate.
- Intels which handles the pilotage, collects the fees on NPA’s behalf and retains 28 per cent of the revenue as commission.
- The FG says collecting at source is illegal (according to the constitution) and even more so now that the government operates the Treasury Single Account (TSA) for which NPA is not exempt.
- Intels however is worried about being owed and so insists that it should be allowed to make deductions at source as per the original agreement.
What the Federal Government is saying:
- The termination of the contract by NPA actually followed a letter by the FG through the Honourable Minister of Justice and Attorney-General of the Federation, Abubakar Malami.
- In his letter, Malami said: “The terms of the agreement as agreed by parties and the dynamics of its implementation which permits Intels to receive revenue generated on behalf of NPA ab initio, clearly violates express provisions of Sections 80(1) and 162(1) and (10) of the 1999 Constitution of the Federal Republic of Nigeria, 1999 (as amended). He said: “The inherent illegality of the agreement as formed has since been expounded by the TSA policy issued by the Head of Service of the Federation on behalf of the Federal Government of Nigeria directing all ministries, departments and agencies to collect payment of all revenues due to the federal government or any of her agencies through the TSA.”
What the NPA is saying:
- After terminating the agreement, the NPA says it won’t back down because Intels has been acting as though the laws of the country do not apply to it.“INTELS wanted to continue to do the job and deduct their money from source and then remit the balance to NPA, due to the fear of delay. I have assured them that the money would be paid within seven working days and where we exceed these days, we would be ready to pay for the delays. No company is above the law and it is only when all corporate entities obey the laws of the country that everyone benefits. There must be a level playing field for all players in the sector and this is the commitment of the NPA,” said the Managing Director of NPA, Hadiza Bala-Usman.
- She said the government would open a fresh bidding in a transparent manner for prospective contractors.
- She has assured staff of the company that once they possess the required skills, the new contractor would engage their services.
What Intels is saying:
- The company has accused the management of NPA of deliberately frustrating attempts to address the issues raised by the introduction of the TSA in the execution of the agreement. It accused Bala-Usman of rebuffing meetings, letters and proposals to resolve the impasse. “Deliberate stumbling blocks were placed on the path of resolving the issues and this is indicative of a sinister motive,” the company’s spokesman, Bolaji Akinola said yesterday.
- He said when the contract was signed, none of the parties envisaged the introduction of the TSA.
- The company said it borrowed $1.4 billion (N428.4 billion) from banks to execute the agreement with the understanding that the debt would be offset from monies realised from the pilotage services paid directly to the banks.
- On the argument that by law, all revenues eligible to the government must be paid into the Consolidated Revenue Account (CRA), Akinola said based on the profit sharing agreement between the NPA and INTELS, 72 per cent of the revenue goes to NPA while 28 per cent is for INTELS. Hence it is the 72 per cent that is revenue for the FG and should be paid into the CRA.
Crucially: Akinola said the NPA management is pandering to the antics of the company’s detractors at the expense of government revenue, huge investments and several jobs, contrary to the position of fairness and objectivity that it should have adopted.
Who are these detractors of the company? Akinola did not mention names, but there are speculations that at the heart of it all is the 2019 elect ions and Atiku’s expected bid. Hadiza Bala-Usman, the NPA MD, is an ally of the governor of Kaduna state, Nasir El-Rufai, and until her current appointment, was his chief of staff.