Termination of Pilotage Agreement: Bala-Usman shops for replacement, as NPA gives Intels 3 months to quit

*Ports Authority sacked Intels for evading TSA – Management

*Says it’s not unaware of fear of job losses, but promises workers will be absorbed

The NPA boss blamed Intels for refusing to pay revenue into the Treasury Single Account (TSA) of the Federal Government.  Bala-Usman said all efforts made at resolving the issue peacefully in the last 15 months had been rebuffed by Intels.  She said the NPA relied on the advice of the Attorney General of the Federation (AGF) and Minister of Justice, in terminating the contract, adding that the legal advice was sought after more than one year of futile attempts to get Intels to comply with the TSA.

Less than a week after terminating its boats pilotage monitoring and supervision agreement with Intels Nigeria Limited, the Nigerian Ports Authority (NPA) has advised the logistics company to commence transition process that would last three months.

The Managing Director of the NPA, Hadiza Bala-Usman, said in Lagos on Monday that the authority would proceed on an arrangement to engage another firm.

This is just as the two bodies disagreed over the developments that led to the termination of boats pilotage monitoring and supervision agreement between them.

The NPA had terminated the agreement with Intels based on the decision of the federal government that it violates the Nigerian Constitution.

Reports have it that the pilotage agreement gave Intels the authority to collect revenue on behalf of the NPA, at a 28 percentcommission. The management of Intels has since vowed to fight the termination of the contract, describing it as “clearly preposterous and the consequences highly injurious to the interests of Nigeria.”

The NPA boss blamed Intels for refusing to pay revenue into the Treasury Single Account (TSA) of the Federal Government.

Bala-Usman said all efforts made at resolving the issue peacefully in the last 15 months had been rebuffed by Intels.

She said the NPA relied on the advice of the Attorney General of the Federation (AGF) and Minister of Justice, in terminating the contract, adding that the legal advice was sought after more than one year of futile attempts to get Intels to comply with the TSA.

The NPA boss said the first such correspondence was through a letter written by the former Executive Director, Finance and Administration, Mr. Olumide Oduntan on June 28, 2016, directing Intels to pay all revenues collected on behalf of the NPA into the TSA sub account domiciled with the Central Bank of Nigeria (CBN).

She said all efforts to get the company to obey the directive was met with various excuses until the NPA wrote to seek the AGF’s legal advice on how to proceed with the NPA/Intels relationship in a letter dated May 31, 2017.

She said: “The legal advice contained in a September 27, 2017 letter addressed to the Managing Director of the Authority, Hadiza Bala Usman, by the Attorney General of the Federation (AGF) and Minister of Justice, Mallam Abubakar Malami (SAN) expressly  stated as follows : “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.”

She further stated that as a responsible agency, the NPA has proceeded to act as advised, stressing that it was now determined more than ever to terminate the contract forthwith.

“The Authority has taken note of threats by Intels to withdraw its investment plans in Nigeria and must point that business thrives in favour of everyone involved only when the laws of the country of operation are adhered to. No organization is above the Nigerian constitution and it is only when all corporate entities obey the laws of the country that everyone benefits. There must be a level playing field for all players in the sector and this is the commitment of the Authority,” she said.

She also said that the management was not unaware of the fear in some quarters which has to do with job losses, adding that the workers would be absorbed by any entity that took up the job.

The management of Nigeria’s oil and gas logistics giant, Intels Nigeria Limited says the present management of NPA deliberately frustrated attempts to address the issues raised by introduction of the TSA in the execution of its pilotage agency agreement.

Intels also said that the termination of its pilotage agreement with NPA was done at the expense of government revenue, huge investments and several jobs, contrary to the position of fairness and objectivity.

Intels spokesman, Bolaji Akinola yesterday said series of meetings, letters and proposals on how to resolve the TSA imbroglio was rebuffed by the NPA Managing Director.

Intels said the issues arose because the pilotage agency agreement, signed in 2010, did not envisage the TSA, and as such did not factor it in its implementation. The company said it borrowed $1.4 billion (N428.4 billion) from banks to execute the agreement with the understanding that the debt would be offset from monies realized from the pilotage services paid directly to the banks.

“Deliberate stumbling blocks were placed on the path of resolving the issues and this is indicative of a sinister motive,” Akinola said.

Akinola said that on 5th May 2017, Intels sent a letter to NPA proposing the opening of a jointly signed account between the company and NPA on which the boat service revenues would have been directed, but that this proposal, like many others, was rebuffed.

He also faulted claims by NPA that the contract was terminated based on the advice of the Attorney-General of the Federation.

“At what point are revenues eligible to be paid into the Consolidated Revenue Fund? NPA acting on behalf of the Federal Government entered into a profit sharing agreement with Intels. 72% of the revenue goes to NPA while 28% is for Intels.

“The objective interpretation of the Constitution should be that the revenue due to the Federation should be the 72 per cent due to NPA,” he said.

Meanwhile, the Federal Inland Revenue Service has denied sealing off Intels’ office in Onne, saying it only placed a demand notice at the company’s premises to remind the organization of their revenue obligations.