Eromosele Abiodun
The Nigerian Ports Authority (NPA) has offered clarifications to the Senate Committee on Public Accounts on the debt sum of N1 billion, which the committee said was not clarified in the report of the Auditor General of the Federation (AuGF).
Contrary to media reports, the NPA said a total of $232,354,156.43 out of the $852,093,731.10 cited in the AuGF’s report had been recovered.
Managing Director of the NPA, Mr Mohammed Bello-Koko, who appeared before the Committee said that the House Committee on Public Accounts in the 9th Assembly had thoroughly verified the money and gave the NPA a clean bill of health.
Bello-Koko explained that the misunderstanding between the position of the Senate and House of Representatives Public Accounts Committees arose from the continuous repetition of sums dating back to the period before the year 2006 Concession of the authority, which the current NPA management had already accounted for but the sums had yet to be expunged from its books.
Bello-Koko exhaustively explained the facts of the matter to the senators, stressing, “Most of the debts date back decades. I mean legacy debts from companies like Nigerian National Shipping Line Ltd and from pre- concession period.
“But we have been carrying these debts in our books and we have been impairing the amounts, thereby making provisions for all such debts. We have written to Auditor-General of the Federation on the procedure to take them out of our books and solicited for the support of the Senate Committee in this regard. In the spirit of public accountability, we will always be open to give account.”
He explained that the debt figures were composed of estate rents, lease fees and throughput charges among others as stipulated in the Concession Agreements.
According to him, “The debts date back to the period 2006 to 2019,” adding that “There have been recoveries within the period under review, and they are unrecoverable debts owing to issues such as Volume Change, Gross Minimum Tonnage (GMT)/Penalties, Encumbered Areas. etc.
“Volume Change – Means volume adjustment. The Executed Contract Agreement stated that if the percentage variation between actual/ performance and projected volume is within minus 10% to plus 10% the lease fee will be paid in full. However, if the percentage variation performance is more than minus 10% to plus 10% the lease fee payable will be adjusted by an equivalent percentage. Therefore, the adjustment is against the lease fee payable by the percentage change in volume.
“Encumbered Areas – Refers to areas that are inaccessible due to factors not caused by the tenant such host community hostility, marshy land etc. Guaranteed Minimum Tonnage (GMT)- This to the projected tonnage pledge by the Concessionaire to achieve, this arises from the inability of the Concessionaire to meet up the pledge.
“Unpaid VAT- This relates to the VAT element of the unpaid Lease Fees arising from adjustment brought about by the volume change defined above. Penalty- Refers to financial burden suffered for failure to meet terms of payment in a contractual agreement. It is as a result of the Concessionaire not paying within the specified time /days allowed in the contractual agreement. Simply put, it refers to a charge for late payment.”
He continued: “The figure quoted in the press relates to the 2019 Auditor General’s report and it doesn’t reflect the current position of indebtedness to NPA. It would be pertinent to clarify that out of the amount of $852,093,731.10 cited in the Auditor General of the Federation’s report and being circulated in the media, a total of $ 232,354,156.43 have been recovered.
“The balance $504,663,452.37 constitutes uncollectible portion due to volume change and Contentions, $54,663,452.37 constitutes uncollectible portion due to Gross Minimum Tonnage (GMT), $19,619,459.00 constitutes Portion due to Encumbered Areas, $11,908,355.82 constitutes various penalties imposed on the terminal operators for not meeting set standards and $ 28,693,607.07 represents VAT of said amount .
“In relation to the concessionaire debt of N1.8billion, a total of N269million has been recovered leaving a balance of N1.6billion which represents encumbered areas of the terminals. As regards the outstanding estate rent, Ship Dues and service boats of $67million a total of $10.6million has been recovered.”
