The conflict climaxing in the Nigerian Ports Authority finally cancelling lucrative pilotage contract it had entered with logistics giant, Intels last week, took a long time coming.
Aside the much publicised controversy over the Nigerian government’s Treasury Single Account and the failed bid by the NPA to get Intels to enroll into the scheme, PREMIUM TIMES also traced an old conflict on the monopoly enjoyed by the logistics company in handling oil and gas cargoes.
This newspaper has reviewed documents dating back to 2006 detailing a tumultuous relationship between the two parties and the policy rigmarole that complicated the business partnership.
In May, PREMIUM TIMES reported the raging feud between the two sides and the decision by the NPA to seek the intervention of the Attorney General of the Federation, Abubakar Malami.
Below is a timeline of the titanic battle the parties have fought for over a year now.
BATTLE ONE: The war over TSA
- On June 28, 2016, NPA wrote Intels directing it to transfer service boats pilotage revenue accruing to it to the maritime agency’s TSA account at the Central Bank of Nigeria. The letter followed a meeting the previous day on the matter by the two parties at the NPA headquarters in Lagos. The Authority reminded the logistics company that the TSA policy demands that revenues collected through commercial banks must immediately be swept into the relevant account in the CBN.
PREMIUM TIMES has not seen any record that Intels replied that correspondence.
Officials said there were several other meetings in 2016 between the two parties. Intels stood its grounds that it would not be able to comply with the TSA policy.
- On January 16, 2017, the NPA wrote to the Chief of Staff to the President, Abba Kyari; the Attorney General of the Federation, Abubakar Malami; and the Minister of Transportation, Rotimi Amaechi, highlighting its efforts to get Intels to comply with government’s TSA policy and seeking advice on the way forward.”Intels should be made to cooperate and partner with the Authority to conclude the review of the agreement to ensure strict compliance with the Federal Government TSA policy so as to engender robust service boats revenue management that will increase revenue to Government,” the agency said in the letter.
- On March 15 2017, the NPA wrote to Intels again pressing it to comply with the TSA policy.
- On March 27, 2017, Intels replied, saying it was unable to comply with the TSA policy because it had loan commitments with some commercial banks guaranteed by the deposits.
- The NPA, apparently angry, wrote Intels again on April 19, 2017, saying the government’s policy on TSA is “sacrosanct and must be complied with”.
Intels replied on May 5, 2017 insisting that going by the agreement it signed with the NPA, it would be difficult for it to comply with the government’s TSA policy.
- Fed up with what an official described as Intels’ intransigence, the NPA wrote to the Attorney General again on May 31, 2017, seeking “professional legal advice” on how to handle the logistics company’s refusal to comply with a key policy of government.
- On September 27, 2017, the Attorney General responded with a verdict, saying “the conflict between the Agreement (with Intels) 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.”
- On October 10, 2017, the NPA terminated its contract with Intels based on the advisory from Attorney General Malami.
- Intels fired back via an October 11, 2017 letter to NPA MD, Hadiza Bala Usman, issuing a seven-day ultimatum to the maritime agency to reverse the termination of the agreement or be ready to meet it in court.The ultimatum expires tomorrow, October 18, 2017.
BATTLE TWO: MONOPOLY IN HANDLING OF OIL AND GAS CARGOES
- In 2006, the Olusegun Obasanjo administration concessioned 26 ports in the country to private businesses.
- The 2006 concession grouped the ports into three major categories namely: Containerized or Container cargo, Bulk cargo and Multi-purpose or general cargo.After the concession agreement was signed, the Bureau of Public Enterprises (BPE) added a fourth category “Oil and Gas”, which was not in the original agreement. Subsequently, the Onne, Warri and Calabar ports were asked to receive oil and gas related cargoes.
But a series of conflicting directives by former Presidents Umaru Yar’Adua and Goodluck Jonathan on how the concessions were to be implemented resulted in controversies among the concessionaires.
- In 2008, Mr. Yar’Adua’s administration reviewed the agreement and issued a circular to the effect that the designation of Onne, Warri and Calabar ports as oil and gas terminals notwithstanding, importers could approach any port of their preference for business.The directive came after the then Minister of Transportation, Diezani Alison-Madueke, asked the BPE to re-categorise the ports so that Intels could be given exclusive right to handle oil and gas cargoes. Mrs. Alison-Madueke’s circular also appointed Intels as managing agent in Lagos Pilotage District.But in a letter to his chief economic adviser, the minister of transportation and the managing director of the NPA, Mr. Yar’Adua reversed the re-categorisation because of its “potential damage” to the Nigerian economy.
- However, in April 2015, then President Jonathan, gave a counter directive that handed Intels exclusive control over all oil and gas cargoes at its terminals in Onne, Warri and Calabar.A competitor, Ladol, which felt the directive was against the concession agreement it entered with the government and therefore inimical to its interest, responded with a lawsuit against the government.
- In May 2016, the Minister of Transportation, Rotimi Amaechi, wrote President Buhari regarding various issues affecting the concession of Nigerian ports to private businesses.
- In July 2016, the presidency forwarded the letter to the Attorney General of the Federation (AGF), Abubakar Malami, for his legal opinion on the various bottlenecks and a review of some of the policies that were adopted since 2000.In his report, the AGF said the categorisation of the terminals in Onne, Warri and Calabar as exclusively oil and gas terminals “is not only unknown to the shipping industry, it encourages monopoly and therefore inimical to the investment climate in the country.”
- In April 2017, President Buhari approved the recommendations of the AGF which included the reversal of the exclusive handling of oil and gas cargoes at Intels controlled ports.Following the approval of Mr. Malami’s recommendations by Mr. Buhari, Ladol withdrew its suit against the federal government from the Federal High Court, Lagos.The NPA then wrote Intels informing it of the presidential directive breaking its monopoly.
- On June 4, 2017, Intels approached a Federal High Court in Abuja to challenge the reversal of the policy terminating its monopoly.The case is still in court.
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