NPA, Intels face-off: Partnership ruptured by politics
When the Nigerian Ports Authority (NPA) signed the Boats Pilotage Monitoring and Supervision contract with Integrated Logistics (INTELS) Nigeria Limited 17 years ago, none of the parties thought that anything like Treasury Single Account (TSA) could tear them apart, in a relationship, which has been smooth sailing, generating as much as $200m yearly for both parties.
The storyline, however, changed on September 27, 2017, when the Attorney General of the Federation (AGF), and Minister of Justice, Abubakar Malami, described the agreement as illegal, and advised the Managing Director of Nigerian Ports Authority (NPA), Ms. Hadiza Bala-Usman to withdraw the contract.
Intels, a logistics and facilities services provider in the maritime/oil and gas sectors, was co-founded by Gabriele Volpi, an Italian national, and former Vice President, Atiku Abubakar. The oil and gas logistics giant operates in Onne, Rivers State, Warri, Delta State and Lagos.
Under the agreement, the INTELS provides guides to ships coming into the ports and leaving for safety purposes.
In return for the services, ship owners/companies are required to pay a pilotage fee, which INTELS collects on NPA’s behalf and retains 28 per cent of the revenue as commission for the services rendered, while the NPA get the 72 per cent balance.
The TSA was introduced by the Federal Government to consolidate all inflows from all agencies of government into a single account domiciled with the Central Bank of Nigeria (CBN).
Malami, in the letter said the agreement, which has allowed Intels to receive revenue on behalf of NPA for 17 years, violates sections 80(1) and 162(1) and (10) of the constitution.
“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.”
Malami also stated that: “NPA being an agency of the Federal Government is bound by the TSA policy, and has not howsoever been exempt therefrom. Due to the constitutional nature of the TSA, where there is a conflict between the TSA and the terms of the agreement, the TSA shall prevail.
“Therefore all monies due to the NPA currently being collected by Intels, and any other agents/third parties on behalf of NPA must henceforth be paid into the TSA or any of the sub-accounts linked thereto in the Central Bank of Nigeria (information of the account will be communicated in due course) in accordance with the TSA policy.
Shortly after the letter was transmitted, the struggle for justification and defence commenced with both parties putting up positions, figures, accusations and counter-accusations to uphold their stance in the matter.
Be that as it may, analysts have linked the rift to political intrigues, arising from the presidential ambition of Atiku Abubakar, just as they cautioned that business survival and new drive for investments decisions should be the nation’s priority in her quest for economic revival.
Deputy National Publicity Secretary of the ruling All Progressives Congress (APC), Comrade Timi Frank, was one of the first persons to speak out on the issue, when he alleged that Abubakar was being persecuted over his 2019 presidential ambition.
He warned government agencies to steer clear of politics, as dabbling into it could send the wrong message to the investing public and the entire business community.
Meanwhile, Bala-Usman, who claimed to have relied on the advice of the AGF, alleged that Intels refused to comply with the TSA policy of the Federal Government by insisting on deducting its money from source.
She maintained that she raised letters and held several meetings with the firm’s management on the need for it to comply with the Federal Government’s directive on the TSA since she assumed office 15 months ago.
“But Intels maintained their stand not to make payments to the NPA, and continue to deduct their 28 per cent commission and other costs. Even after the NPA said that a TSA account had been opened and that at the end of the month, there will be reconciliation of accounts, INTELS refused to comply.
“Will I spend 15 months talking to a company to comply with the constitution of the country?” she asked.
The NPA boss, who stated that the management would proceed on a transitional arrangement to engage another firm, added that the new contractor would employ the skilled workers that might be disengaged by INTELS as a result of contract termination.
The management of INTELS has since vowed to fight the termination of the contract, describing it as “clearly preposterous and the consequences highly injurious to the interests of Nigeria.”
According to its spokesperson, Bolaji Akinola, the management of NPA deliberately frustrated attempts to address the issues raised by the introduction of the TSA in the execution of its pilotage agency agreement.
Akinola said: “The issues arose because the pilotage agency agreement, signed in 2010, did not envisage the TSA, and as such did not factor it into its implementation.”
He said the company borrowed $1.4b (N428.4b) from banks to execute the agreement, with the understanding that the debt would be offset from money realised from the pilotage services paid directly to the banks, adding that meetings, letters and proposals on how to resolve the TSA imbroglio were rebuffed by the NPA managing director.
“Deliberate stumbling blocks were placed on the path of resolving the issues and this is indicative of a sinister motive,” he said.
In the immediate aftermath of the contract withdrawal, Intels Nigeria initially threatened to withdraw from the $2.7 billion Badagry Deep Seaport.
The Badagry Deep Seaport is a massive undertaking, which will cost billions of dollars, and will be the biggest in Africa, and would turn Nigeria into a regional hub for ships bringing goods to the continent. The facility is also estimated to generate about 45,000 jobs in the next few years.
Volpi, majority shareholder of Intels Nigeria Limited, has, however, apologised to the Buhari government and the NPA over the termination brouhaha.
The mogul, who holds dual Italian and Nigerian citizenship, reportedly said although he was not involved in the negotiations between his firm and NPA over the disagreement on the pilotage agreement, the company was set for peace talks.
He resolved to ensure that Intels undertakes a reconciliation process with the NPA and transfers all the revenue collected from the boats monitoring and supervision services in Nigerian maritime waters to the TSA with the Central Bank of Nigeria (CBN), in compliance with the policy of the federal government.
“We are committed to co-operating with the government and NPA in the development of Nigeria’s maritime sector and this includes the Badagry Deep Seaport.
Before Volpi stepped in to offer the apology, the House of Representatives had ordered an immediate reversal of the termination of the contract, and even went ahead to adopt a motion sponsored by Diri Duoye, under matters of public importance during the plenary session, presided over by Speaker Yakubu Dogara.
The House as part of its resolutions, resolved to raise an ad-hoc committee to ascertain if due process was followed before the termination of the contract, even as it directed all involved to maintain the status quo ante pending when the committee would turn in its report in two weeks.
An analyst, Dr. Ralph John, in his reaction to the impasse called on President Muhammadu Buhari, to wade into the matter and find a common ground to resolve the matter in order not to jeopardise the interest of Nigerian workers in the Intels establishment, adding that government should ascertain, where the relationship got soured and rectify it.
“Intels recently dropped over 1, 500 staff which means that if the recent contract termination is allowed to stand, the possibility is that more workers will lose their jobs,” he stated.
John argued that though Bala-Usman explained that a new company would take over the contract and staff, but considering the Nigerian environment that might not be easily achieved with the desired results.
“If you look at the multiplier effect of the job losses, in fact, there is, therefore, need for President Buhari to wade into the matter. The reason is that government policies ought to be people-oriented.
The President-General of Maritime Workers Union of Nigeria (MWUN,) Adewale Adeyanju, said: “The Federal Government should avoid anything that will send wrong signals to investors that Nigeria’s environment is not safe and conducive for business.
“Most of these employees are Nigerians with families and responsibilities. We are therefore, worried that if this issue is not resolved amicably, their jobs could be on the line. The socio-economic implications of most of them losing their jobs in a volatile area like Rivers State, can be better imagined than experienced,” he said.
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