NPA Terminates JVA with NGETCL over Violation of Procurement Act

  • BPP raised memo in 2015 rendering the contract invalid

Eromosele Abiodun

The Nigerian Ports Authority (NPA) has terminated the Joint Venture Agreement between the authority and a consortium led by Niger Global Engineering and Technical Company Limited (NGETCL) for not complying with the Public Procurement Act.

The NPA stated this in a letter dated August 22, 2017, addressed to the Managing Director of NGETCL handling the Calabar Channel project.

By terminating the agreement, the NPA has acted on the recommendation of the Bureau of Public Procurement, which had during the administration of former President Goodluck Jonathan condemned the contract and asked that its implementation should be stopped.

The latest letter titled, “Joint Venture Agreement between the Nigerian Ports Authority and the Consortium Led by Niger Global Engineering and Technical Company Limited” was obtained by THISDAY at the weekend.

It reads: “Please be informed that the Nigerian Ports Authority, as a statutory corporation, having established non-compliance with the provisions of the Public Procurement Act 2007 in the selection of the consortium led by your company as a party to the Joint Venture Agreement (JVA), cannot continue to maintain a JVA which is inconsistent with an extant law of Nigeria and therefore in breach of public policy. Accordingly, the authority is constrained to put an end to the JVA.”

The NPA, in the letter signed by its Board Secretary/Legal Adviser, E. I. Williams (Mrs), added: “Take note that the Joint Venture Agreement dated July 25, 2013 between the Nigerian Ports Authority and a consortium led by Niger Global Engineering and Technical Company Limited, including the Joint Venture Agreement dated January 25, 2013 between the same parties, is hereby terminated.”

NPA, through its subsidiary, Calabar Channel Management (CCM) was reported to have entered into a contract with NGETCL.

The contract, meant to dredge the Calabar Channel was awarded to NGETCL, but was allegedly condemned by the Bureau of Public Procurement for violating all due processes.

The issue later degenerated into a crisis, having caused conflict between NPA and the Chairman, Senate Committee on Customs, Excise and Tariff, Senator Hope Uzodinma, a former chairman of the company.

Efforts by THISDAY last night to get the reaction of the management of NGETCL was unsuccessful.

The recommendation for termination of the Calabar channel contract actually predates the President Muhammadu Buhari administration and the leadership of Ms. Hadiza Bala-Usman at NPA.

The former Director-General of BPP, Emeka Ezeh, had in a memo to the former President Goodluck Jonathan, on May 18, 2015, raised issues and made recommendations about the contract at the twilight of the administration.

In the memo obtained by THISDAY, Ezeh asked Jonathan to approve the termination of the contract, especially on the grounds that NGETCL hijacked the process of selection of the qualified companies. In fact, Ezeh alleged that NGETCL was fraudulent and did not follow the due process to get the contract.

According to the memo obtained by THISDAY, “At the end of the prequalification exercise, six companies were pre-qualified and submitted their technical and financial bids. Based on the tender evaluation, recommendation was made to the Bureau for Public Procurement for issuance of no objection certificate for the award of contract in favour of Messrs Lagos Channel Management Company in the sum of 120,331,193.47. Over N26 billion.

“The Bureau of Public Procurement on September 9, 2011, as a result of protest by Dredging and Reclamation Jan De Nul Limited, declined the issuance of a “NO OBJECTION’ certificate for the award of contract for the Dredging of Calabar Access Channel in favour of Messrs Lagos Channel Management Company Limited.

“Consequently, in November 2012, a representation was made to the President by the Bureau for Public Procurement for alternative bid through selective tendering. This was considered and approval was granted to invite six out of the companies that bidded initially along with Bonny Channel Company (BCC) and a new joint venture to be formed for managing the Calabar Channel under the name Calabar Channel Management Limited (CCML). At the time of the presidential approval for the re-procurement of the dredging contract for the Calabar Channel, CCML had not yet been incorporated as a JV with NPA, but a proposal to that effect was under consideration.

“The incorporation of CCML was necessary first to give it the required legal personality to enable it bid for the capital dredging of the Calabar Channel in line with presidential approval. It is expected that it would then proceed to handle the maintenance dredging when the capital dredging is completed. The proposed share structure of the JVC was to be 60 per cent for NPA 40 per cent for the consortium. It was at this stage that Niger Global Engineering Company Limited and its consortium hijacked the process. It signed a questionable Joint Venture Agreement with NPA and went ahead to CCML at the Corporate Affairs Commission (CAC) altering the share structure arrangement.”

“It was discovered that the Joint Venture Agreements curtained terms that were skewed and disadvantageous to the financial interest of the Nigerian Ports Authority (NPA) while some other parts extended the scope of work to include Ibaka Deep Sea Port in Akwa Ibom State, which was not within the Calabar Channel port.”

Ezeh therefore submitted: “Having examined the letter ref. T.0160/s.107/IX of June 10, 2014 forwarded to His Excellency by the HMOT, I wish to observe as follows:

· That the issue was presented to the President without any input from the Board of Directors of the Nigerian Ports Authority and the NPA had advised severally that any long-term maintenance contract should be after the capital dredging in line with the consultant’s opinion on the matter.

· That the bidding process, which includes reputable international and local companies is in progress and truncating the process will send a negative signal to the international commercial community,

· That there is no subsisting agreement between NPA and Niger Global Engineering Company Limited and therefore there is no valid contract between them.”

The Managing Director, Hadiza Bala-Usman, had hinted at the termination of fraudulent agreements when she said that the authority would review the contracts with its JV partners, following the recent sanction of some of its technical partners in its JV companies in a Swiss Court for bribing NPA officials to defraud the federal government. Bala-Usman had said they would be investigated and prosecuted by the Economic and Financial Crimes Commission (EFCC).

According to her, NPA had asked for guidance from the Attorney-General of the Federation on its continued relationship with the entities in view of their sanctioning in the Swiss Court for corruption.

Swiss prosecutors had recently named four former Nigerian government officials in a multinational bribe scandal relating to contract awards at NPA. The former Nigerian government officials were indicted alongside Dredging International, one of the technical partners that was fined one million Swiss Francs and directed to refund 36 million Swiss Francs in illegal profits for allegedly making the illicit payments to the Nigerian officials. Dredging International Services is one of the technical partners of Bonny Channel Management Limited (BCML) that runs the Bonny Channel Company (BCC) with the NPA in a joint-venture – public-private partnership.

According to her, “Recently we had a situation where one of our technical partners in our joint venture companies was sanctioned in a Switzerland court for being said to have bribed officials of the NPA over a period. We have obtained the Swiss court sanctioning and forwarded same to the EFCC for further investigation on the persons and the entities that were said to have benefited from the graft. We have also forwarded the Swiss court documents to the AGF office for them to guide us on our continued relation with this entity in view of the sanctioning that it has gotten from the Swiss court for corrupt practices with NPA officials.

“For every corrupt practice that we identify we forward to the EFCC to investigate and determine what prosecution process they will embark upon. When we identify a legal concern whereby there is a lack of clarity on the role of government or there is a seeming disadvantage that has been provided to the Nigerian people, we have forwarded to the Attorney-General to provide legal guidance on how we can exit some of these relationships.

“A lot of the corrupt practices that we have identified within the port operation are attributable to certain contractual obligations the NPA has entered with entities whereby the federal government is short-changed. We are working at reviewing such agreements and we are working on terminating some of the agreements. We have reached out to the relevant agencies and communicated our position on this.”