There are strong indications that the Federal Government will extend the contract of the four Destination Inspection (DI) service providers by another six months, as the Nigerian Customs Services (NCS) is yet to build capacity to handle the service.
With the new contract extension, the seven-year DI contract that started in 2006 to terminate on December 31, 2012 but was later extended by six months, which is supposed to lapse by this month (June), the contract will have a new termination date, which is December 31, 2013.
A source close to the presidency, who asked for anonymity, said the contract would be extended on the basis that the Nigerian Customs Service is yet to have the required and proven capacity to handle the high technical scanners that have been built and installed by the service providers.
The source confirmed that there would be another extension of the contract of the three service providers, which is coming a few weeks to the expiration of the six months initial extension period to the service providers by the Federal Government.
It would be recalled that Federal Government in 2005 signed a seven year contract agreement with three destination inspection service providers namely Cotecna Destination Inspection Limited (CDIL), SGS and Global Scansystems, which commenced in January 2006 to supply cargo scanning machines on build, own, operate and transfer basis (BOOT).
The contract allows the service providers to train officers and men of the Nigeria Customs Service (NCS) on risk management valuation and classification, to enable them take over the destination inspection operation from the service providers.
However, it was discovered that the Presidency is acting on the recommendations made in a recent memo from the Federal Ministry of Finance, which analysed the contract awarded seven years ago to the service providers.
According to the recommendations of the Federal Ministry of Finance, the plan to handover the DI operations to the Nigeria Customs Service, which was the target of the contract from the beginning, will still on hold when it “it would have been proven that Customs has the capacity to carry out these vital services which are important to the economy”.
Assessing the readiness of the Customs to the take over, the Federal Ministry of Finance said: “The subsequent assessment by the Ministry showed that the Service had made progress in some areas, but there were still significant gaps that needed to be filled .This was the basis for the initial six-month extension approved by the President in December 2012.
According to the ministry, the World Bank was commissioned at no cost to government, to carry out an honest assessment of the readiness of both service providers to hand over and Customs to take over the DI operation.
“The detailed assessment by the World Bank revealed more progress on reforms but indicated areas of risk to the economy if the new systems put in place are not properly piloted to ensure that they work optimally before being spread to the rest of the economy.”
