Eromosele Abiodun argues that the recovery of $100 million from Integrated Logistics Services by the Economic and Financial Crimes Commission for the Nigerian Ports Authority shows that the suspension of the Managing Director of NPA was unjust
On October 11, 2017, THISDAY had reported that the federal government then directed the Nigerian Ports Authority (NPA) to void the boats pilotage agreement it had with Integrated Logistics Services (INTELS).
INTELS, a logistics and facilities services provider in the maritime and oil and gas sectors, was co-founded by Gabriele Volpi, an Italian national, and Atiku Abubakar, former vice president of Nigeria.
According to the report, Attorney General of the Federation (AGF) and Minister of Justice, Abubakar Malami, said the contract was void ab inito.
Malami had relayed the government’s decision to the Managing Director of the NPA, Hadiza Bala-Usman, in a letter dated September 27, 2017.
The letter was entitled, ‘Request for Clarification of Conflict Between Executed Agreement and Federal Government Treasury Single Account Policy’.
Malami then said the agreement, which had allowed INTELS to receive revenue on behalf of NPA for 17 years, violates sections 80(1) and 162(1) and (10) of the constitution.
The AGF wondered if the management of the NPA and INTELS, did not take cognizance of the relevant provisions when negotiating the agreement in 2010.
“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 letter read in part.
He added: “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.
“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.”
INTELS Apologises
Facing the reality of losing several millions of dollars in commissions for the pilotage services it handles on behalf of NPA on Nigerian coastal waters,Volpi, founder of INTELS apologised to the federal government over the dispute that resulted in the termination of his company’s pilotage agreement with the NPA. The agreement had allowed INTELS to receive revenue on behalf of NPA for seven years.
Reacting to the incident, Volpi had said INTELS would “comply with the directive of government” and transfer all the revenue collected from the boats monitoring and supervision services in Nigerian maritime waters to the TSA.
“We want to apologise to the federal government and NPA over this disagreement with INTELS. I was not personally involved in the negotiations with NPA, but we apologise for what has happened. We intend to comply with the directive of government and transfer all the revenue to the TSA because we are a law-abiding company, ”Volpi told THISDAY.
NPA Takes Action
Two years after the purported apology, INTELS and Volpi never fulfilled their promise to the federal government.
Consequently, after about two years of bickering, the NPA gave a notice of termination of its boats pilotage monitoring and supervision agreement with INTELS.
In a letter dated March 27, 2019, addressed to Bala-Usman, NPA’s Executive Director, Finance and Administration, Mohammed Bello-Koko, had accused INTELS of non-compliance with the presidential directive and circular on implementation of Treasury Single Account (TSA) and Article 4.1 of the executed supplemental agreement by refusing to remit the sum of $145, 849,309.33 being outstanding service boat revenue generated from November 1, 2017 to October 31, 2018.
According to Bello-Koko, Article 4.1 of the executed supplemental agreement states, “The total revenue generated on behalf of the principal in each of the pilotage districts from the service boat operations shall be paid directly into the principal’s TSA at designated commercial banks which will be swept daily into the principal’s corresponding TSA at the Central Bank of Nigeria (CBN).”
He stated that Intels neither remitted the sum of $55.72 million, which it pledged to remit in a letter dated February 12, 2019, nor the sum of $145.84 million, which it demanded via various letters.
The letter by Bello-Koko also stated, “Let it be clearly stated that Intels persistent refusal to remit all service boats revenue to TSA as clearly stated in Article 4.1 of the supplemental agreement and the sudden introduction of the ‘concept of reciprocity’ in your letter dated March 6, 2019 is worrisome. The concept of reciprocity is alien to the executed supplemental agreement.
“In a letter dated March 6, 2019, INTELS alluded to the following as defence for its refusal to comply with terms of executed agreement: that the outstanding revenue of $145. 84 million, which covers the period of November 1, 2017 to October 31, 2018, is not true, that its pledge to pay the sum of $55.70 million as revenue for period from November 1, 2017 to March 31, 2019 is predicated on authority’s payment of $19.67 million. And added that the authority’s fulfilment of the payment is a prerequisite for the reciprocity of rights and obligations of each party in executed agreement.
“That the unreconciled amount of $145. 84 million included revenue expected from both clients under Intels agency and other agents.” THISDAY reliably gathered that the sum of $118 million, which accrued between January 1 and September 30, 2019 as well as unconfirmed accruals between January and August 2020 when the contract finally expired also remain unremitted.”
INTELS Sue FG
Not willing to give up, INTELS promptly went to court to stop the termination of its contract. However, the company latter complied with NPA’s directive of remiting to the FG’s single treasury account and the NPA withdrew the termination notice it served the company.
Expiration of Contract
As was exclusively reported by THISDAY last year, NPA and INTELS settled out of court wit the understanding that the contract was going to expire hence the need not to spend government resource in legal services.
Contrary to claims in a section of the media, there was no court order existing at the time of the expiration of the boat pilotage contract between the NPA and INTELS by on August 8, 2020.
INTELS was engaged as Managing Agents of the NPA for oil industry related activities in the compulsory pilotage district within the Exclusive Economic Zone of Nigeria. The contract commenced in June 2007 with a review of an extension of 10 years in 2011 to culminate in August 2020. As stated above, the NPA had in 2017, served INTELS with a notice of termination for its refusal to comply with the Treasury Single Account policy of the federal government.
Following the receipt of the termination notice, the company complied with the Policy. A supplemental agreement was signed to recognise the compliance to TSA and the notice of termination was accordingly withdrawn. In compliance with the Public Procurement Act, the NPA in December 2019 initiated a public tender process in anticipation of the expiration of the contract in August 2020. The tender was for the appointment a contractor to provide the service for NPA for which INTELS charges the NPA 28 per cent service charge.
However, INTELS was disqualified because it violated one of the criteria advertised for the tender process. THISDAY checks revealed that INTELS, alongside other companies submitted bids to qualify for the tender in line with the criteria spelled out in the public advert.
INTELS, it was learnt, violated one of the criteria advertised for the tender process and was accordingly disqualified.
“The tender process proceeded accordingly and the companies that scored the highest were prequalified. The outcome of the transparent tender process was forwarded to the Federal Ministry of Transportation for onward transmission to the Federal Executive Council (FEC) for its consideration.”
“Upon disqualification from the tender process, INTELS initiated a court action to prevent the Authority from proceeding with the tender process citing a debt owed one of one their sister companies, Deep Offshore Nigerian Ltd for the development of Onne 4B,” a source at the NPA told THISDAY.
NPA MD Suspended
Curiously, 58 days ago, eight months after the expiration of INTELS contract, the Bala-Usman was suspended for failing to restore all INTELS’ contracts that were suspended or terminated.
This is, according to a member of the panel of enquiry was set up by the Minister of Transportation, Rotimi Amaechi to investigate her.
As reported by THISDAY, a member of the panel who did not want to be named had said that the panel, which was initially set up to probe the earlier claim of not remitting operating surplus of N165 billion to the consolidated revenue fund account would now probe Bala-Usman for insubordination as.
He said: “We are looking at two things. One, the suspended managing director was in the habit of communicating directly with the president and bypassing the honourable minister. This is gross indiscipline and a breach of public service communication line. That is enough to get her sacked.
“Two, the minister directed her to restore all INTELS’ contracts that were suspended or terminated. What she didn’t know was that the president was in the know of it. She failed to comply. This is insubordination and she is not above discipline.”
However, according to a THISDAY report, a source at the Transport Ministry had volunteered that Buhari actually withdrew his approval for the reinstatement of INTELS’ contract after Bala-Usman wrote to President’s Chief of Staff, Prof. Ibrahim Gambari, to explain NPA’s position.
Gambari, the source said, forwarded her response to Malami, for a legal opinion.
The source said Malami wrote to the president to state that the NPA was right and that no contracts were terminated or violated.
Buhari then withdrew his approval for the reinstatement of Intels’ contract and that was believed to have infuriated Amaechi, who accused Usman of insubordination.
EFCC Vindicates Bala-Usman
Meanwhile, in a development viewed by pundits as a major vindication of the suspended NPA boss and a testament to the source of her reforms, the chairman of the Economic and Financial Crimes Commission (EFCC), Abdulrasheed Bawa, last week disclosed that the anti-corruption agency recovered $100 million from INTELS on behalf of the NPA.
Bawa stated this in Abuja when he appeared at the weekly ministerial briefing organised by the Presidential Media Team at the State House.
He recalled that the commission recovered $100 million for the NPA from some of the outstanding remittances INTELS owed the country.
He noted that he did not refer to any serving minister in his submission on how a minister purchased a multi-million naira property through a bank chief.
On successes recorded by the commission since he took over in the last 100 days, Bawa said the agency does not make recoveries for only the federal government but all victims of fraud.
