Changing face of Nigeria’s destination inspection contract

Nigeria’s Destination Inspection (DI) contract entered into by the Federal Government in 2006 with three service providers on the build, operate and transfer (BOT) has been witnessing a shift in the arrangement in the last six months.

In December 2012, the seven-year contract, which was supposed to terminate in 2012 to enable the officers of Nigeria Customs Service (NCS) to take over from the service providers, was extended by six months (June 2013) on the basis of lack of adequate capacity on the part Customs to operate the high-tech scanning equipment built by the DI service providers.

Recently, an authoritative source from the Federal Ministry of Finance, disclosed that the Federal Government has extended the contract by another six months. Under the new extension period, a team of consultants hired by the NCS in partnership with the World Bank will develop a six months transition plan for Customs to take over.

“The new systems will be tested phase by phase to ensure a smooth and successful handover at the end of the period. The plan will include a clear timeline for handover at the end of the six months,” the source from Ministry said.

Though the white paper on the recent contract extension is yet to be released, maritime analysts strongly foresee another round of extension at the termination of this new extension period.

Just last week, the Federal Government rearranged the allocations allotted to the service providers seven years ago.

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Under the new arrangement, Cotecna Destination Inspection Limited (CDIL), that formerly handles the Lagos Port Complex (LPC), Apapa; Tin-Can Island Port, Banki Border post in Kano State and Jibya Border post in Katsina State, is allowed to retain Tin-Can Island Port, Banki Border post, Kano State and Jibya Border post in Katsina State losing its prime allocation, Apapa port.

Also, the only indigenous service provider, Global Scansystems Limited that formerly handles Murtala Mohammed International Airport; Warri port; Calabar port; PTML and Seme Border post, now has the right to handle the West African busiest port, Apapa; Seme Border post, Idiroko Border post, and Murtala Muhammed International Airport, Lagos.

SGS, which was formerly in charge of operating scanners at Idiroko, Port-Harcourt Airport, Port Harcourt Port, Onne and Idiroko Border post, now has the right to handle Calabar Port, Onne Federal Lighter Terminal, Onne Federal Ocean Terminal, PTML, Port Harcourt Airport and Port Harcourt Port.

Lucky Amiwero, an experienced maritime analyst, told BusinessDay in a telephone interview that the scanning equipment built by the service providers now belongs to the Federal Government since the initial expiration of the contract in December 2012.

According to him, though there is no formal handover of the equipment that the government now has the right to reallocate the service providers to the terminals they are needed.

He further said that the rearrangement is in line with the terms of contract that require the service providers to handover the scanning equipment to the government seven years after.

It would be recalled that Federal Government in 2005 signed a seven-year contract with Cotecna Destination Inspection Limited (CDIL), SGS and Global Scansystems. The contract allows the service providers to train Customs officers on risk management, valuation and classification to enable them take over the destination inspection operation from the service providers to prepare the Customs to take over from them.