FG Voids NPA, Intels Pilotage Agreement

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• Says contract was illegal ab initio

Eromosele Abiodun

The federal government has directed the Nigerian Ports Authority (NPA) to terminate the boats pilotage monitoring and supervision agreement that the agency has with Intels Nigeria Limited, a leading integrated logistics and facilities services provider in the maritime and oil and gas logistics sectors of the country, saying that the contract was void ab initio.

Conveying the decision of the federal government to NPA, the Attorney General of the Federation (AGF) and Minister of Justice, Mallam Abubakar Malami (SAN), in a letter dated September 27, 2017 to the Managing Director of the NPA, Ms. Hadiza Bala-Usman, said that the agreement, which has allowed Intels to receive revenue on behalf of NPA for 17 years, violates the Nigerian Constitution, especially in view of the implementation of the Treasury Single Account (TSA) policy of government.

Based on the directive to terminate the agreement, Intels which was founded over three decades ago by Mr. Gabriele Volpi, an Italian national who also has Nigerian citizenship, stands to lose several millions of dollars in commissions for the monitoring and supervision pilotage services it handles on behalf of NPA on Nigerian coastal waters.
To ensure the safety of ships’ passage within Nigeria’s seaports, the NPA, through Intels as its agent, provides pilotage services to guide ships into and out of the ports.

The rule of thumb in the maritime industry is that pilotage must be compulsory for all ships of 35 metres overall length or greater unless a valid Pilotage Exemption Certificate is held by the ship’s master.
In return for the service, 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.
However, with the memo written by the AGF, a copy of which was obtained exclusively by THISDAY from the justice ministry, Intels would no longer be allowed to provide the service.

Drawing the attention of Bala-Usman to the illegality of the agreement, Malami made it expressly clear that the agreement violates Sections 80(1) and 162(1) and (10) of the constitution, and wondered that the parties – NPA and Intels – did not avert their minds to the relevant provisions when they were negotiating the agreement in 2010.
Section 80(1) of the constitution states: “All revenues or other moneys raised or received by the Federation (not being revenues or other moneys payable under this Constitution or any Act of the National Assembly into any other public fund of the Federation established for a specific purpose) shall be paid into and form one Consolidated Revenue Fund of the Federation.”

Section 162(1) states: “The Federation shall maintain a special account to be called ‘the Federation Account’ into which shall be paid all revenues collected by the Government of the Federation, except the proceeds from the personal income tax of the personnel of the armed forces of the Federation, the Nigeria Police Force, the Ministry or department of government charged with responsibility for Foreign Affairs and the residents of the Federal Capital Territory, Abuja.”

While sub-section 10 of the same section states: “For the purpose of subsection (1) of this section, ‘revenue’ means any income or return accruing to or derived by the Government of the Federation from any source and includes: (a) any receipt, however described, arising from the operation of any law; (b) any return, however described, arising from or in respect of any property held by the Government of the Federation; (c) any return by way of interest on loans and dividends in respect of shares or interest held by the Government of the Federation in any company or statutory body.”

In the letter titled: “Request for Clarification of Conflict Between Executed Agreement and Federal Government Treasury Single Account Policy,” the attorney general said: “I refer to your letter dated 31st May 2017, ref: MD/17/MF/Vol.XX/583 in respect of the above subject matter wherein you sought clarification on the legal issues implicated by the continuous implementation of the Managing Agent Contract Agreement dated 11th February 2010 executed between the Nigerian Ports Authority (NPA) and Intels Nigeria Limited for the provision of boats pilotage operations, in the light of the Federal Government of Nigeria’s Treasury Singe Account (TSA) policy.

“Upon my review of your letter under reference and the relevant agreements, I have been able to conclude inevitably that the terms of the agreement as agreed by parties and the dynamics of its implementation which permits Intels to receive revenue generated on behalf of NPA ab initio, clearly violates express provisions of Sections 80(1) and 162(1) and (10) of the 1999 Constitution of the Federal Republic of Nigeria, 1999 (as amended). It is thus curious that parties did not avert their minds to the above provisions of the constitution whilst negotiating the agreement.

“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.

“The objective of the presidential directive (TSA policy) in exercise of the executive powers of the president under Section 5 of the 1999 Constitution (as amended) was in furtherance of the spirit and intent of Sections 80 and 162 of the constitution and to aid transparency in government revenue collection and management.

“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.

“For the avoidance of doubt, the agreement for the monitoring and supervision of pilotage districts in the Exclusive Economic Zone of Nigeria on terms inter alia that permits Intels to receive revenue generated in each pilotage district from service boat operations in consideration for 28% of total revenue as commission to Intels is void, being a contract ex facie illegal as formed for permitting Intels to receive federal government revenue contrary to the express provisions of Sections 80(1) and 162(1) and (10) of the 1999 Constitution of the Federal Republic of Nigeria (as amended), which mandates that such revenue must be paid into the Federation Account/Consolidated Revenue Fund.

“In the premise of the above, the conflict between the agreement and the TSA policy presents a force majeure event under the agreement, and NPA should forthwith commence the process of issuing the relevant notices to Intels exiting the agreement which indeed was void ab initio.”

  • AyoJon

    This is the second time Volpi is in the news in the past couple of months.

  • Shetty

    Say Buhari ! Kill the rent seeking businesses even OBJ could not do it despite his hatred of Atiku but this government did it with a stroke of the pen death to conruption and the vendors of corruption .

  • Basil Chijioke

    this agf is primary school lawyer, unilaterally voiding a contract between two parties am so sure intels will challenge this action in court. political witch hunting

  • Isiakwa

    We tend to always cover everything in the colors of politics, but consider the illegality of this and the impact it has had on operators in the Marine sector over the years in terms of increased cost. Intels powers should be curbed as it is wrong for them to be an operator and a regulator at the same time. And at times if a decision is taken that it is in the public interest, for whatever assumed or ascribed reason then we should see it for what it is. This is good for the Marine sector and it is good for local content as I am sure every Nigerian clearing agent will approve.I have no interest in politics but on this, I fully support the Government.

    • yukkmouff

      Local content?! Can’t you read or are you just plain dyslexic? Intels is a Nigerian company for f@*ks sake!

      • Isiakwa

        Mind your language you schmuck !! and it Means you do not know anything, get off your gilded chair and get real. . I am in Marine and deal with Intels daily and there is nothing Nigerian about Intels, they are good at what they do, good at settling Govt officials, employ plenty of Nigerians at lower positions but totally Expat run where it matters. so please do not kid yourself about Mr Volpi holding dual nationality.

        • super hero

          Monopolies should definitely be discouraged in business. However, in the Nigerian experience monopoly or indeed “corruption” is when someone else is “benefiting”.
          The EGINA people are all over here in Abuja with bags of USD huddling in meetings with government “officials”.
          Come to the Hilton on any given night and see for yourself. From the good doctor herself to the SHI and WAV people.

    • super hero

      It is also bad for business/investor confidence. The Intels pilotage concession was negotiated and legally signed. It is not the only concessional arrangement in our maritime sector. ACPM Ltd has the MARPOL concession for ALL Nigeria’s ports for 25yrs. Grimaldi has the one for RORO at Tin-Can port. The list is long!
      Somebody mentioned the “Amy Jadesinmis of this world will get a breather”. Her LADOL is NOT competitive that’s why she’s not breathing easy right now! The previous government risked a diplomatic fallout with the Korean government just to force Samsung Heavy Industry to bring the Egbuna FPSO project to LADOL.
      There are other such businesses like Snake Island/Nigerdock, Eko Support etc who are quietly going about their business and not dependent on government “intervention”.

      • Don Franco

        Dear SuperHero,

        I contend that on the basis of the provisions of the Constitution cited by AGF Malami, the Government may well be in the right in cancelling this contract; once a matter involves a Constitutional violation, even if only alleged, the burden of proof for the defendant is an uphill effort. If l were the government”s Counsel in this matter I’ll escalate the matter by filing for refund from Intels and keep them in court for many years; should they go to court to allege interference with a contractual agreement between two parties.
        All in all Intels hasn’t been fair to indigenous logistics companies, especially since Atiku”s son, Adamu became MD about 6 years ago. How in the name of God and all that’s holy can only one company control the collection, forwarding, carriage, customs clearance, delivery and storage of every piece of heavy lift oil rig, stacker, valves, pipes, and related equipment that enter or leave Nigeria and West Africa for the past 30 years, Haba! They even have their own maritime espionage network in the industry; while two wrongs doesn’t make a right; I believe it’s time Intels take their oppressive monopoly out of Nigeria; our mumu cup don full!

        • wanwa

          Now you have given deep thought into this development.

        • super hero

          Dear Don Franco,
          I totally agree with you. But up to a point. I firmly believe that one of the key problems that needs to be addressed for the VP’s “Ease of Doing Business” program to succeed is how contracts are treated in this country. If Intels went into a legal contract with the government, surely the best way to seek redress for us is to renegotiate the contract or activate whatever “escape” clauses contained therein.
          Contracts are voided all over the world everyday. I would do the same as you and seek to recover back payments and such. However, they were NOT given the chance to even do that and also to prepare their staff for closure.

          We need to understand that the REAL though subliminal reason why so many “government” matters are treated with levity here is because “government” has very low credibility quotient. You can present your Nigerian passport to an immigration officer and he will casually tell you it is fake and is seized until you do the “needful” and the SAME passport is stamped and handed back to you (this actually happened to me). That officer has just treated your contract with the government with brazen levity.

          I also happen to operate in the industry and dislike the fact that Intels has a monopoly. I am also under the cosh with another maritime monopoly run by another son of another former “oga at the very top”.
          However, in both cases they’re EFFICIENT. My only regret is that the end cost of my service is much more than it should be.
          Na true you talk my broda, our mumu cup don full. But let us direct our ire towards the people who treat the trust we repose in them with levity.
          THEY were the ones who signed our lives away to Intels and their ilk.

          • Don Franco

            Oga, granted; I believe you are on the right. All in all, politics and business is a deadly mix. ….

        • super hero

          Sir please accept my apologies for the long essay.

  • Fidelis Arumala

    Lol! Sunset at dawn for Atiku Abubakkar. Very predictable government, the knives are out, it’s going to be a FIGHT TO the death. No more pretense nor shadow boxing. It’s REAL, Atiku!
    2019! LET THE GAME BEGINS!!

    • Don Franco

      Dear Fidel Arumala,

      I think that Bola Tinubu’s Alpha Beta is next!

      • Fidelis Arumala

        Dear Don,

        Except Tinubu’s Alpha Beta has a subsisting relationship with FIRS, I don’t see how that would affect his base here in Lagos which is the major cash cow. And that alone should WORRY the Buhari administration.

        • Don Franco

          Dear Fidel,

          My experience is that former friends always turn enemies once they breathe that polluted Abuja air; surely you have seen how Amosun, Fayemi and Fashola has formed an indomitable force against the Jagaban since 2015? Osinbajo is behaving for now.
          Tunde Fowler can turn coat depending on the risk-benefit outcomes involved is my opinion.

      • share Idea

        That is why Tinubu have not criticized this government …

        • g_kazaure

          Tinubu has not crticized the Government because he knows that they have his dossier. The FBI indicted him and he knows that the documents is with government especially Abubakar Malami SAN

      • g_kazaure

        Alpha Beta operates in Lagos and has no federal patronage.

        • Don Franco

          The Federal Government is an equity partner in many businesses across sectors, where the Lagos State Government levies their oppressive never-ending taxes. Surely you’re aware that many businesses have relocated to Ogun State, to avoid the aggressive tax system of Lagos as administrated by Alpha Beta…

      • super hero

        He’s already being affected. He took a stake in intels a few years ago.
        This may just be a brilliant strategy to get at two potential threats with one move. Well played.

  • Ashibogu

    The Federal Government is very funny. A Party in law cannot unilaterally void a valid and running contract without placing the other party on notice. This is not a military regime. Intels should go to court, get an injunction and fight it out. I know Atiku is a fighter and at the end of the day the truth will prevail. This is not how to run a country. It is Atiku today, it can be anybody tomorrow.

    • share Idea

      When the government was doing it against opposition members we shouted but we were called names, now, the axe have turned to the people in house…

    • speechtherapy

      Honestly! How does a whole Attorney General even write this drivel? No sanctity of contract, no renegotiations, nothing! Just outright cancellation! They have no problem since the money Intels will get from suing is not coming out of their pockets.

      This govt has debased this country to a level that we may never recover from…very sad..

      • yukkmouff

        Well, if not for the dysfunctional quota system in play, how does a charge and bail lawyer practicing somewhere in Kebbi end up as Attorney- General of the federation?

        • austin

          Check out his CV. You’ll conclude that there are quota system SANs.

    • Netanyahu

      Atiku has never lost any matter in the court with any of his traducers. Ask the ape in Ota. He is a fighter, from the right side of the law. He is a smart and intelligent guy. I will vote for him in 2019. He is urbane and not like the skeleton in the rock. I have no doubt Intels will fight for their rights in this one.

  • Ashibogu

    Abacha fought Intels to a standstill . This looks like the antics of the regime of Sani Abacha. The company will not be existing today but for the late Emir of Kano, Alhaji Ado Bayero. It is a script from ” The Dictator’s Handbook” . The defeat of the cabal in 2019 will be far worse than that of Jonathan in 2015. Many may not like Atiku for a myriad of reasons but we must accept that the man knows how to do business. Thank God the contract was not initiated when he was in government but rather under a Southern President( Goodluck Jonathan) in 2010. Now, what a Southern President gave to a Northerner has been taken away by a Northern President.

    • Don Franco

      Dear Ashibogu,

      Atiku surely expected this to happen, I’m sure he prepared himself for it. Every good thing comes to an end, at some point. Intels may not even feel the pinch of this act in their bottom line; they have lots of money saved up; besides, they have expanded to Mozambique and Tanzania; with twice the size of their Nigerian operations. While this is politically motivated; Intels monopoly and Dangote-like stranglehold on the heavy-lift logistics industry in Nigeria is about to be broken; it can’t be all bad, if you consider that the Amy Jadesimis (LADOL) of this world can finally get a breather.
      2019 will surely be the falling and raising up of many!

      • speechtherapy

        Be that as it may, this is not the way to go about it….

        • Don Franco

          Dear Speechtherapy,

          All is fair in love and war, is all I can tell you; but for the hate speech and fake news and scare tactics of the APC, do you imagine that GEJ still wouldn’t be in the Villa this minute?

      • yukkmouff

        Succinct and insightful submission; unlike the rant of the village Idiot know as Admonisher.

      • super hero

        Every indigenous successful business, from Oando to Nestoil, FO to RCC must all be quaking in their boots now. One wrong slip of the tongue and the jackboot will fall…….!

        • Don Franco

          Dear Super Hero,

          Most of these guys have been around; they’re sangfroid in playing both sides against the middle, besides, theiving politicians need them to launder their stolen loot of our commonwealth offshore. … they’re opposite sides of the same coin. Can you imagine SEC and the NSE supporting Wale Tinubu and Mofe, against Volpi; Atiku”s Intels equity partner, this, korokoro, in the face of evidence of his having been defrauded to the tune of almost $750 million? While you and I are here commenting on the Backpages. …

    • Admonisher

      Please stop this IDIOTIC ranting. Intel’s has been enjoying sole bidder monopoly corruptly for many decades.

      Why do you guys support corruption?. You cry restructuring yet some of the vestiges of northern favouritism are attacked and you moronically complain.

      Why should a sitting President of Nigeria own a company that is doing illegal, anti BPP regulations biz with Nigeria ..if Atiku wins election?

      I was even waiting for Atiku to sell or trust his shares in every company he owns before declaring for President. Luckily the FG is helping him with some of them. Go to advanced countries, you will see how seriously they take these things.

      • speechtherapy

        Everything you are saying must be tested in a civil manner not this rush of blood to the head that always afflicts this govt. Intels did not sign the contract with itself, it signed with a willing, fit and able counterparty representing a sovereign country no less. If any part of that contract has become inconsistent with our laws, past, current or future, you call the other party for renegotiation not unilateral cancellation.

        Are we not the same country still begging foreign investors to come and invest? Is this the good news you have for them that govt can just up and cancel or declare illegal a binding contract any day they wake up on the wrong side of their bed? And where do you see corruption here? Pls try and put aside this your petty sentiments and use your brain for once…

  • Arabakpura

    Atiku, here they come! Be sure your hands are clean!

  • Felix Udoh

    The race begins……..Checkmate.

    • austin

      This is just check …. none has a fools mate up his sleave. This game would be drawn out to the last few pieces. The pawns would have been decimated long before the winner would start to emerge. The player that can deploy the knight like the Russians would stand a better chance of coming out tops in this game of thrones. Remember that the knight can potentially make eight moves, all crooked.

  • austin

    If anybody still thinks or ever thought that there will be free and fair elections in 2019 then that person is living in wonderland.
    To give monkey water is very easy, the trick is to get back the cup from it. How many millions of dollars was it rumored that Atiku contributed in 2015 again? Atiku can now know and tell the differences in grades of hot water.

    • Don Franco

      Dear Austin,

      Indeed; and there’s a proverb in the Biafran land of my fathers that “Hot water kill toads”. I’m sure Atiku never thought that himself and Volpi will be persecuted by the very government that they invested heavily to install; at the point that he led five governors out of Eagle Square 3 years ago.
      By the time Tunde Fowler is instructed to send his boys to audit the books of Intels, there will be no funds with which Atiku will undertake his APC primaries campaign. He that has an ear, let him hear.

      • Admonisher

        Thank God for Buhari.

        • Drake Solo

          for what exactly? he is fighting his political battle and in your customary stupidity, you are praising him.

          • yukkmouff

            Lol @ “in your customary stupidity”- Chai!!!!

          • Netanyahu

            I like that phrase ..”customary stupidity”. Very apt.

          • Gary

            Apparently you guys don’t realize that @Admonisher is a BMC operative.
            The guy’s only trying to make a living. Country hard and the man must wack.
            Please pardon or better still, ignore his stupid postings.

    • 45Degree

      At least INTELs will NOT be having access to free money. Nigeria has been so torn for long. More than 30% of money meant for the government goes to intels. I give it to Buhari. This is good news for majority of Nigerians. F intels.

      • austin

        In the same way are you saying that Alpha Beta in lagos should be shredded and moved out of their collection contract?
        First ask yourself, why are private companies employed to do this collection job? Because the civil servants were not effective.
        Next, was there a remarkable difference in what gets to the government after the agency fees. YES.
        So far Nigeria is in profit.
        Why F Intels then? Because their Oga declared.
        F Intels is not to our benefit obviously.

    • musa aliero

      Am laughing in fulani…. huhuhyhyhhhghohihu Jonathan is laughing at them all lol

  • share Idea

    In all the disagreement Atiku had with GEJ during late lear election, GEJ never interfered with Atiku’s business interests contrast with what Buhari is doing now, simply because Atiku is showimg interest in 2019 election.

    • Toby

      It’s called dictatorship. I’m loving this.

      • share Idea

        lol

    • PRIME MINISTER

      GEJ said Nigerians will appreciate him after he is gone. I guess we are beginning to.
      Not only Atiku, Tinubu and others then in opposition had their businesses in tact. People like Tinubu actually benefited from GEJ’s govt.
      Where are those that said in 2015 that buhari has changed?

      • Admonisher

        We are appreciating Buhari well because he will knock down monopolies, trusts and 100% market controllers in Nigeria.

        Goodluck is an inferior material who has NO respect for Nigerians and expects us to be all corrupt and weak like him.

        You are also like him if you are defending Intel’s years of killing NPA income generating biz lines and the fact that Nigeria could have ten Intel’s if not for corruption

        • PRIME MINISTER

          I have no biz with atiku. The issue is why are they doing it now? What about others? If atiku didn’t fall out with buhari, would they have done it? Ans:No!
          There are similar concessions in the NPA port, with dangote group, TSA/govt tax collectors etc
          Am looking at intent, So I will not celebrate buhari because I know this step would not have been taken if atiku didn’t fall out with him. This is about politics not about you and I.

          • 45Degree

            Use your head my friend. Buhari was voted to make positive change. Intels collects Port revenues, deduct all its expenses and commissions then give the balance to Nigeria after keeping i in the bank and earning interest income for several months. This is an Italian company for real.

          • PRIME MINISTER

            There are many port concessions other than that and they operate the same way. So why revoke atiku’s own when it has operated for over 17yrs. What about the Lagos port concessions? Revocation was political. You can stay fooled.
            Buhari is making changes as he is doing with his cronies in NNPC? Evidences show that though he handed over to Osinbajo while in London yet from his sick bed he was approving NNPC contracts for Baru!
            My head is well used. I don’t follow sheepishly. I only pity you.

          • 45Degree

            The fact that something has been allowed for long is NOT enough reason to continue, otherwise there will be nothing like repentance. I know a lot about Intel business deals at Onne, in Port Harcourt.

          • PRIME MINISTER

            Be sincere, why isolate one and leave the others, if it is not political? This is my point.
            I have no business with atiku but I refuse to be fooled. You can stay fooled.

          • 45Degree

            My broda BUT intels has had this monopoly for more than 30 years! Come on, where is the love of country? Let other private indigenous businesses compete and benefit. It would create more jobs and more revenue for govt. Intels even refused to abide by the TSA rules. Why? Let Intels go and do that in Italy. Atiku should face his beverages business and University.

          • PRIME MINISTER

            I surrender. This one is very personal to you. Hope you didn’t look for a job there and was turned down.

          • 45Degree

            Wrong assumption.

        • super hero

          What do you need 10 Intels for? Have you heard a single complaint from the users of the service in all those years? No. Because they were efficient and professional. Note that this termination did not mention anything about misappropriation if collected fees. Now brace yourself for the cacophony that will ensue from the scramble of incompetent and unqualified “companies” with “presidency contacts” wanting a piece of the action.

      • Sammy2

        If you have any idea of how Intels has been extorting Nigeria on exorbitant amount paid as pilotage you will be happy for this country.
        Those of us in the industry are grateful.

        • share Idea

          What are grateful for? That government cancel Intel agreement without and replacement. There is nothing wrong in government cancelling a contract if entered in error but appropriate care should be taken in order not to send signal to investors that government can just wake up and cancel existing contract when the shareholders of such companies have seemly disagreement with government especially when the disagreement is not related to revoked contract.

          • Isiakwa

            Change always comes with some discomfort but if it works it will be good for the industry and the country.