• Wednesday, May 22, 2024
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NPA terminates contract with Intels Nigeria, takes over boat service operations

Nigeria’s ports authority recovers N36.357bn outstanding debts

The Nigerian Ports Authority (NPA) has finally terminated its contract with Integrated Logistics Services (Intels) Nigeria Limited.

By implication, the boat service operations previously handled by third-party company, which is Intels Nigeria Limited, would now be handled directly by the Nigerian Ports Authority, thereby raising concern over the ability of NPA to maintain the revenue standards and efficiency of services rendered by the third-party.

According to a Marine Notice 11 of 2020 published on September 1, 2020, which was sighted by BusinessDay, all service boat owners and operators are to do transactions directly in each of the port complexes of the Nigerian Ports Authority.

“This is to inform our numerous stakeholders in Nigeria and abroad that the Service Boat operation hitherto handled by Third-Party Company, which is Intels Nigeria Limited, has been terminated,” according to the notice signed by Daniel G. Hosea, harbour master of Lagos Ports Complex.

The notice directed that every service boat movement must be reported and booked at the office of the harbour master of the district, where the pilotage chits and master declaration forms will be issued and returned after every movement.

It said every inquiry on service boat movement should be directed to the office of port manager of the port or harbour master of the pilotage district.

Jatto Adams, general manager, corporate and strategic communication of the NPA, who is on leave, told BusinessDay that the Authority actually started procurement for the termination of the contract earlier in the year. Efforts to get additional information from Adams’ deputy, however, failed.

A source close to Intels, who does not want his name in the print, said, “It has been the same issue since 2017. The NPA did not actually terminate the Service Boat contract because the truth was that the authority did not renew the contract after it expired.”

According to the source, Intels has done well by turning the few million-dollar project to a multimillion-dollar one.

The source further disclosed that Intels has adjusted to the new reality by reducing its work strength.

“Intels has increased the revenue generated for the government and services rendered to vessels under its district of operation. NPA has taken over the operation and we hope that they would be able to maintain the standards set by Intels in revenue generation and service offering,” the source said.

Recall that in 2010, Intels was contracted by the NPA to provide boat monitoring and supervision services and collect revenue on its behalf, at 72:28 percent sharing formula, where NPA earned 72 percent of the revenue while the remaining 28 percent went to INTELS.

To implement the contract due to elapse this year (2020), INTELS said it entered into loan agreements to the tune of $1.4 billion (N428.4 billion) with several Nigerian banks based on the understanding that the debt would be offset from monies realised from the execution of the contract, which were paid directly to the banks.

According to Intels, it took pilotage service from a revenue stream of a few thousand dollars per month to multimillion dollars per month.

“Before INTELS entered into the joint venture agreement, the NPA was realising little above $6 million per annum but INTELS moved up the revenue profile to over $200 million per annum,” it said.

Surprisingly, crisis ensued when NPA in September 2017 announced the termination of the contract on the premise that INTELS refused to pay revenue generated from the contract into the Treasury Single Account (TSA) of the Federal Government.

The NPA insisted that 100 percent of the revenue generated by Intels should be paid into TSA while the NPA would be the one to pay Intels its 28 percent instead of deducting the 28 percent at source.

The company was said to have refused NPA’s offer on the basis of the loan agreement it had with several Nigerian banks at the beginning of the contract.

However, NPA and Intels were able to settle their dispute out of court.

“INTELS has agreed to pay all the debts through the TSA platform. In fact, they have apologised for what they did,” Hadiza Bala Usman, NPA managing director, was quoted to have said when the issue was resolved in late 2017.

Meanwhile, a Federal High Court in Lagos has granted an interim injunction stopping the NPA from terminating the role of INTELS Nigeria Limited as manning agent in the pilotage districts of Lagos, Warri, Bonny/Port Harcourt and Calabar.

The judge, Justice R.M. Aikawa, granted the interim injunction in the suit number FHC/L/CS/1058/2020 based on an application filed by INTELS Nigeria Limited and Deep Offshore Service Nigeria Limited against the NPA.

INTELS and Deep Offshore had requested the court to restrain NPA from preventing them from performing their duties as managing agent, pending the determination of ongoing arbitration proceedings.

The court order, which was issued on Friday, August 28, 2020, reads: “That an order is granted restraining the respondent, its servants, agents, and/or privies from giving effect for the purported notice of expiration issued it on 5th August 2020 or taking any other step to prevent the parties from performing their duties and obligations under the agreements between the 1st applicant and respondent dated 11th February 2011 and 24th August 2018, pending the determination of the originating motion dated 12th August 2020 seeking for interim measures of protection in support of the pending arbitration between the parties therein.”

The court adjourned the matter to September 15, 2020 for the originating motion on notice.

Consequently, INTELS has asked the shipping community to disregard a Marine Information issued by NPA purportedly terminating its operation, as it was issued in contempt of the court.