•Says pilotage contract expired, not cancelled
•‘Logistics firm acts as agent to govt, IOCs’
The Nigerian Ports Authority (NPA) has accused Integrated Logistic Services (INTELS) Nigeria Limited of refusing to remit to the federal government service boat pilotage revenue in the firm’s custody, which amounted to $207.646 million (N78.905 billion) as at September 30, 2019. NPA said the money was aside from service boat pilotage revenue for January 1, 2020 to July 31, 2020 amounting to $97.029 million, which adds up to $307.675 million (N115.775 billion) in the custody of INTELS, Nigeria’s largest logistics company.
Managing Director of NPA, Hadiza Bala-Usman, stated this in an exclusive interview with THISDAY.
Bala-Usman also clarified that its service boat pilotage contract with INTELS was not cancelled, as widely construed, but only expired last month. She said the process for renewal of the contract was being frustrated by the manipulation of court processes by INTELS.
The NPA managing director decried what she called the impunity of INTELS and its disregard for the federal government, adding that the logistics company’s bid to use the court to frustrate the government is regrettable.
Giving a breakdown of the unremitted funds, Bala-Usman said the total unremitted reconciled service boat pilotage revenue in the custody of INTELS, after deduction of the firm’s 28 per cent agency commission and all other deductions, and adjustments, amounted to $152.377 million as at October 31, 2017.
According to her, “The total reconciled revenue generated for the periods November 11, 2017 to March 2018 amounted to $77.973 million, while the sum of $22.270 million ($20.63 million for INTELS and $1.631 million for other agents) was remitted to service boat dedicated TSA account, leaving an unremitted balance of $55.702 million in INTELS custody.
“The total reconciled revenue for the periods August 1, 2018 to December 31, 2018 amounted to $75.36 million, out of which other agents remitted $10.674 million, leaving an unremitted balance of $64.7 million. The total sum of $3.53 million was remitted into the service boat TSA account for the periods October 1, 2019 to December 31, 2019, leaving an unremitted balance of $81.841 million.”
Bala-Usman added, “NPA has requested INTELS to forward the service boat schedules for January 1, 2020 to June 2020 to enable commencement of the reconciliation by NPA. However, INTELS is yet to respond. The total service boats reconciled unremitted balance as at September 30, 2019 amounted to $207.646 million (INTEL $179.463 million and other agents $28.183 million). NPA service boat pilotage revenue for January 2020 to July 31, 2020 schedule showed a total of $97.029 million (awaiting INTELS schedule to commence reconciliation).”
The managing director said NPA was not obligated to renew the service boat pilotage contract with INTELS. She explained that other agents could collect the revenue for the government to service its debt to INTELS sister company, Deep Offshore Limited, for the construction of a section of Onne Port for $2.7 billion.
Bala-Usman stressed, “NPA had a contract with INTELS from 2011, it commenced on August 9, 2010 and expired August 8, 2020. It’s a 10-year contract for service boat revenue collection. So we entered into the agreement 10 years ago with INTELS, for revenue monitoring, for managing agents, for service boat collection in our pilotage district. They collect revenue and monitor operations on behalf of Nigerian Ports Authority, and NPA gives them 28 per cent of the revenues collected.
“That is the agreement that was entered into. And that is the agreement we had issues with INTELS concerning compliance with TSA, where they are mandated that the revenues collected should come into the coffers of the government before any remittance of the 28 per cent. So the contract, as I said, expired on August 8, 2020.
“There is an existing contract for the development of Onne 4B by Deep Offshore Limited, a sister company to INTELS Nigeria. Part of the agreement with Deep Offshore is an amortisation project to develop a section of Onne Port. It is a total contract of $2.7 billion, and it is an amortisation, meaning that they will invest their money, and government will now reimburse them from service boats revenue.”
She alleged that the country was short-changed in the contract agreement, saying, “The contract is to develop part of the port at Onne. What I would want you to do is to research and see if, indeed, there was value for money for a $2. 7 billion to build berth 12 to 19 and certain works in 2013.
“I’ll like you to research yourselves and make comparison with the Singaporean ports and other ports that were built at the same time. Look at the facilities and the cost they spent building that port, you would see the huge differentials. $2.7 billion is a huge amount of money that the Nigerian government decided to invest in building not a full port actually, it is just 200 metres of berths that was built.”
Bala-Usman said Nigeria had been paying the debt for over 10 years and not making any headway because the government also paid for the cost of funds.
She stated, “Nigeria is required to pay for the cost of funds. This has been the battle that we took on when I became Managing Director of NPA. A company was given a contract to build berth 12 to 19 at the cost of $2.7 billion. When you build it, government would pay you. It’s like a contract. And every time when you award contracts, it is not government’s business how you go and source your money to execute the contract.
“Government does not pay for the cost of funds. As a contractor, if you are given a project, you go to any bank, they give you a loan, you give your bond, your bank guarantee. How does government take up the liability of the cost of funds?
“So in this instance, government has been paying for the cost of funds. Yes, it was stated in the contract, which is quite a shame that government will enter into a contract where it will pay for the cost of funds, it will pay for the interest on the loans its contractor collected to execute the contract awarded to it.”
The managing director said the federal government did not know how much INTELS collected as revenue, adding that INTELS acts as agent to the federal government and the international oil companies (IOCs), which are clients to the government.
“It is a huge challenge because when they collect revenue, they collect to themselves,” she said. “We don’t know what it is they collect, to a certain extent, they are the ones to tell you, ‘we have collected X amount.’”
She disclosed, “Two years ago, we instituted a process where the monies would come directly into the government coffers and government would be able to see it and remit INTELS commission.
“So, hitherto, they used to collect it, but now, in the last two years, monies are paid into TSA account. Even at that, it’s a battle. INTELS has refused to fully comply with the TSA. So I feel the contract, from the beginning, was not done in the interest of Nigeria and Nigerians. Now that the contract has ended in its own volition, INTELS is going to court to insist that the same contract that was never done in the interest of Nigeria or Nigerians should be in perpetuity until a different contract is fully paid for.
“Some of the wrong policies and agreements that have been entered into in the past, even when they come to an end, we still have a mischief making company going to court to seek all manners of injunctions against the government and stop government from performing its own function.”