In a bid to resolve the stalemate over the pilotage contract with the Federal Government under former President Muhammadu Buhari’s administration, the Nigerian Ports Authority (NPA) has disclosed that INTELS Nigeria Limited has waived $193 million for the government.
Expectedly, the development will end all speculations, insinuations, peddling of rumours and deliberate misinformation in some cases over time regarding the contract.
The NPA said the agreement that culminated in the waiver of the $193,317,556, which accumulated from interests on debt owed, was reached with INTELS in the best interest of the country.
In a statement titled: Setting the Records Straight in Respect of Service Boat Monitoring Operation in Nigerian Ports Authority: Reinstatement of INTELS Nigeria Limited as Management Agent, the NPA maintained that there was misinterpretation in a section of the media, which cited a letter issued by the Port Manager, Lagos Port Complex, Apapa and addressed to shipping companies on the matter.
It assured stakeholders and Nigerians that revenue generation would now increase, even as it commended the Minister of Marine and Blue Economy, Adegboyega Oyetola, for his intervention and efforts at ensuring that the crisis was finally resolved.
The Authority pointed out that the Minister was unhappy with the loss of revenue as a result of the stalemate on the pilotage contract, adding that his show of concern underscored his commitment and patriotism towards resolving the protracted dispute.
Available records show that when NPA took over the management of the services, its revenue plunged from $216million and $209million in 2014 and 2015 under the INTELS agency to $130million and $99 million in 2020 and 2021.
It was further gathered that the revenue plunged even deeper in 2023, as the NPA collected only $55.3million from January to June 2023.
The NPA, however, disclosed that Nigeria would save well over $326.895million from the agreement it reached with INTELS on the contentious pilotage contract, adding that the Federal Government would earn over $500,000,000, considering the interest waiver of $193,317,556.
The new arrangement further includes the reduction in interest rate on the outstanding debt from a six-month LIBOR rate of 6.5 percent to a six-month SOFR rate of three percent, the spread of the repayment of the debt over 15 years, with the first two years of interest-free, and the reduction in commission from 28 percent to 24.5 percent.
The statement reads in part: “It has become necessary to put the record straight for the benefit of the public and the generality of stakeholders in the port industry.
“This is also to avoid distortions and conjectures, which may arise by reason of the wrong interpretation of the aforementioned letter.”
The NPA said it agreed to a waiver of the sum of $100,000,000 being part of the accrued interest as of July 31, 2023 on the indebtedness to Deep Offshore Services Limited under the Phase 4B agreement.
“A further waiver of the interest accruing on the outstanding debt under the Phase 4B Agreement for the period of two years commencing on July 1, 2023 and ending on July 30, 2023, is estimated at $93,317,556.
“Reduction of the interest rate on the indebtedness to Deep Offshore Services Limited from the six-month LIBOR rate, a 6.5 percent to the 6-month SOFR rate and three percent effective from the date of execution of the Supplementary Agreement, will result to saving US$326,895,226 due to the waiver of part of the accrued interests,” it said.
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Maintaining that the Federal Government lost huge revenue in the period the NPA took over the management of the pilotage contract., it further explained that after the expiration of the Service Boat Management Agreement, it took over the performance of the service through various departments and divisions.
However, due to lack of requisite technology to monitor the operations, the expected revenue dwindled, resulting in a drastic reduction in revenue generation for the authority.
“An analysis of its impact on the authority’s revenue showed a sharp decline from $216million and $209million in 2014 and 2015, respectively, under the INTELS agency to $130million and $99 million in 2020 and 2021, respectively, after the takeover by NPA. The situation in 2023 is even worse, as the collection up to June 2023 was only $55.3million.”
While admitting that errors were made by the past management of the NPA, it stated: “Prior to the expiration of the Service Boat Monitoring Agreement, the authority commenced the procurement process for the engagement of Service Boat Operations Monitoring Agents.
“Several companies submitted bids while NPA’s Parastatal Tenders Board (PTB) considered the proposals and approved forwarding the four companies considered qualified for the next stage of the process to the Ministerial Tenders Board for further procurement processes in line with the requirements of the Public Procurement Act.
“The companies are Pacific Silverline Limited, Nexttee Oil and Gas Trading Company Nigeria Limited, ICA Logistics Limited, and Ishasha Investments Limited.
“Shortly after opening the bids, INTELS Nigeria Limited and Deep Offshore Services Limited instituted a suit marked: FHC/CS/L/1058/2020 at the Federal High Court, Lagos, against the Authority, seeking orders of the Court to restrain the authority from engaging new service providers to monitor service boat operations in the Exclusive Economic Zone (EEC).
“INTELS further claimed that the authority was in breach of the management agreement and sought reliefs including that the contractual status quo remains. Deep Offshore claimed that the termination of the managing agency agreement will negatively affect the process of recovering project costs from the authority.
“The Federal High Court, Lagos, per Justice Oweibo, by an Order of Interim Injunction dated July 24, 2020, restrained NPA from giving effect to the Public Notice calling for Expression of Interest for the provision of service boat operations from interested entities in line with the Procurement Act.”
It added: “The authority notified INTELS Nigeria Limited in a letter dated August 5, 2020, of the expiration of the Service Boat Management Agreement on August 8, 2020 and of its intention to take over the provision of the said Service Boat Operation. A public notice was equally issued to all service boat operators, requesting them to deal with the various port management issues. “
INTELS Nigeria Limited again approached the Federal High Court, Lagos, in suit no. FHC/L/CS/1058/2020, requesting an order of the court to restrain NPA giving effect to the Notice of Expiration served on INTELS.
“At the Federal High Court, Lagos Coram Hon. Justice Aikawa granted an Ex parte Order of Interim Injunction on August 28, 2020, restraining the authority from giving effect to the notice of expiration of the agreement pending the determination of the arbitration between the parties.
