Hadiza Bala Usman was appointed Managing Director of the Nigerian Ports Authority at a time the agency was plagued by corruption and inefficiency. Ten months before her appointment, Swiss prosecutors had named four former top shots of the NPA in a $20.7 million bribery scandal involving a joint venture partner of the agency, Dredging International Service (Cyprus) Ltd.
In this interview with Editor-in-Chief Musikilu Mojeed and Nicholas Ibekwe, Ms. Usman explains how she is checking corruption and making the agency more efficient.
PREMIUM TIMES: We want to start with the inaugural statement you gave to your colleagues in 2016. Specifically, you talked about how you would tackle corruption and invest in equipment, infrastructure and services to make the NPA an efficient regulator of the nation’s ports. How far have you gone in achieving these lofty dreams?
Ms. Usman: Thank you very much for taking me back to the beginning of this journey. A year, seven months since I started working and I am very clear on the fact that we need to rid our institutions of corrupt practices.
One of the things that I saw in NPA is that quite a number of contracts have an existing third-party contractor and are skewed in favour of the third-party contractor and this for me is where a lot of the corrupt practices are entrenched within the Nigerian ports. So, we have sought to do reviews and ensure compliance. In instances where we noted that payment or request were made whereby services were not provided, we declined those payment.
In instances where we noted that the emergence of the third-party contractor was not done in line with procedure, in line with the Public Procurement Act, we terminated such contracts. So, these are significant areas where corrupt practices were entrenched in NPA.
We also sought that payments need to be made directly to our account, so that we do not have any attendant revenue leakages for the authority.
Also, in instituting for example, the Treasury Single Account, that also provided another avenue where corrupt practices were checked to the extent that the government provided the TSA as a way to prevent revenue leakages as a way to ensure that all government revenue goes into government coffers. So, ensuring that all entities comply to TSA is also an integral part of our anti-corruption drive within the authority.
PREMIUM TIMES: What about investing in equipment?
Ms Usman: Ok, in investing in infrastructure, we have noted for example, Ikorodu is a terminal that is here, and the jetty is in a bad stage of collapse, we have awarded a contract for the full rehabilitation of the Ikorodu terminal. We also designated it as a terminal for agriculture processing which will facilitate the drive of the federal government on improvement of agriculture. We also identified several jetties which contracts have been awarded for rehabilitation. We also felt the need to test our boulders to see how strong they are, we have instituted that. We have also sought to have an expansion of our channel management. We have noted, for example, the Ijegun area, there are quite a number of jetties in that location and the depth of a draft is not sufficient to enable it take vessels. So, we are investing in having good area to have it drenched to have the necessary draft that is required to facilitate access.
PREMIUM TIMES: Last May, Swiss prosecutors named four former NPA officials in relation to bribery investigation. At the time, you promised that you were going to help the anti-corruption agencies to do everything to get to the root of the matter. What is the latest on the matter?
Ms. Usman: Well, I have written to the Attorney-General as I mentioned, to draw his need to investigate. We have also written to the EFCC drawing their attention to sanctioning not just Nigerian Port Authority staff but several members of, I will say, federal government, and private citizens mentioned in that list. So, we have submitted those documents to EFCC and Attorney-General. We have not received any response from them or any queries, so I am not aware if they are instituting any investigation outside of NPA. But as far as NPA is concerned, we have not been contacted as it relates to investigating people that were said to have been compromised within the Swiss sanctioning.
PREMIUM TIMES: But that case concerns one of your business partners, a company that you have a kind of MOU with, you are doing business with, yet you continue to do business with them. Why is that the case?
Ms. Usman: As part of our letter to the Attorney-General, on one side we had written to them informing them of the people that were said to have been provided with certain inducement within the sanctions. We also wrote to the AG seeking for legal advice on certain relationship. It is a company that we have a joint venture with. We do joint venture for Bonny Channel management with the company. The Attorney-General has since replied us to say that the sanctioning does not affect our relationship with them, that we should proceed with our relationship, as it were. On that basis, we communicated to the company that this is the position of the Attorney-General. Just to further say that following the sanctioning, I at the board meeting of the joint venture, presented the fact that NPA is concerned about its relationship because of this but we will be seeking the advice of the Attorney-General, whatever the outcome is that will determine our relationship. So, the response of the Attorney-General was now sent to the company which says, we should proceed with our relationship with the company.
PREMIUM TIMES: So, did you ask for explanation from the company? Why did they pay what is now considered bribe to personnel of the NPA?
Ms. Usman: They had submitted to us detailing what it was that informed the basis of such payment, which I forwarded to the Attorney-General as well. They had indicated that the Nigerian Ports Authority was not forthcoming in the invoices. It is a joint venture for dredging, so they sent invoices for us to pay and NPA had withheld their invoices for a long period and NPA officials were demanding for inducement to enable then to facilitate those payment. So, it was on that basis that they paid them those monies. They also cited security concern, because they are operating in the Bonny area, that resources are being demanded from them for security of their operations and the monies were given to those persons so that the operation remains safe.
So, these were the two reasons they formally actually tendered the Swiss court as the basis those monies were paid to the NPA officials and other Nigerian citizens and companies.
PREMIUM TIMES: Let’s talk about the traffic on the Oshodi-Apapa Expressway. We know that a new road is being built by Dangote, what other steps has the NPA taken to handle transportation of cargoes to alleviate the gridlock on that road?
Ms. Usman: The construction and rehabilitation of the road need to be done. We also need to institute inter-modal transportation system for cargo evacuation. So, we need to strongly encourage the use of barges and NPA has engaged with private sector companies that are now having barge movement and evacuation of cargoes from our terminal to Ikorodu to facilitate in-flow and out-flow using the barges.
So, we have connect-rail, for example, they started operation in the last three weeks and they are moving export cargoes to APM Terminal and also moving cargoes from APM terminal and Dangote Terminal for evacuation. So, we seek to ensure that we explore to the fullest inter-modal transportation, so leaving our inland waterways is something that is very important.
So, we encourage private sector to come and invest in inter-modal transportation system. Come and invest in the use of inland waters for cargo evacuation, this would greatly assist in the decongestion of the Apapa and Tin Can Island area.
We, also, are working with Nigerian Railways to strengthen cargo evacuation using the rail. We have set up a task team between NPA and Nigeria Railway to work on how to facilitate the improvement of the service. Our terminal operators are working with Nigeria Railway to fine-tune what is required. But indeed, there is a need for additional capital investment, Nigerian Railway through the Minister of Transport is discussing the concessioning with General Electric. That is a critical and important thing that will facilitate rail evacuation.
In addition, we included in our 2018 budget an extension of the rail line from our terminal to EML Terminal, all the way to the quay wall, so that we can have an enhanced cargo evacuation using rail to the quay side. We are doing that for 2018 and also repairing all the linkages internal within the port, to ensure that we have our rail connection more efficiently.
What is more important is that critical investment. To the extent that the Ministry of Transportation is unable to conclude with GE, we need to take some quick decisions on deploring rail, because inter-modal transportation is the only way we can address the gridlock.
We also identified that the shipping companies are bringing in empty containers into the terminals. That is also a congestion issue and we have given them directives that all empty containers need to go to a holding bay outside the port location. At the time when the vessel is ready to be loaded, then they can arrange the sequential time when the container will go in to this port locations. This position has instituted sanctions of withdrawal of service to two shipping lines and three weeks ago these shipping lines have now adhered to utilization of empty containers holding bays. We believe that if we have empty containers taken away from the access to the port location, at all times we would have a reduction in the number of empty containers that are plying that route.
We have also identified the need to remove tramping on the road. Tramping is where you have trailers just being on the road waiting for business. They literally use our road as parking.
There is a need for private sector to invest in holding bays outside the port location, so that you have only trucks that are called up to pick up cargo or deliver cargo are on the way to do that. NPA is deploying the call-up system, where we are calling on private investors to acquire locations and get the necessary lincensing from Lagos State government to develop a trailer, truck terminal or holding bay, on which basis the NPA will connect its call up system to that and then we can reduce the number of trailer that are plying the road when they have no business being on that road.
PREMIUM TIMES: There was a stand off between the NPA and is it the Calabar Channel Management over payment for dredging. You claimed they didn’t do dredging and they said they did. Where are you on that?
Ms. Usman: I would say there are two legs to the issues with Calabar. There is one issue we really have attributed with the emergence of the technical partners. We had noted the non-compliance in the Public Procurement Act, we had noted the concern that people had raised, on which basis we sought and obtained an approval to terminate the joint venture partner for the processes in which the company emerged.
We have terminated the company, we are currently in court with them, and they are taking us to court to challenge the termination of the joint venture partnership. So, regarding the payment they had invoiced Nigerian ports for certain payment of dredging works. We have been unable to verify and confirm that that part of dredging was done.
We have refused to make any payment. We are in court with them challenging the claims they have made on the volumes and dredges they claimed to have made. No payment is being made. There is an EFCC case that predates my joining the NPA on these payments of unverifiable dredging works.
The NPA and EFCC had commenced the process of engaging international surveyor to come and determine the volumes and determine the depth to see if there is a possibility that such dredging was done.
PREMIUM TIMES: Can that be done now? Year after the job had been concluded?
Ms. Usman: Well, it can to a certain extent, because the siltation rate will be computed, so you know how much siltation could have happened within that period and there is also the claim of components of capital dredging and component of maintenance dredging.
So, we will be able to determine indeed if those volumes have been done, might not be to the letter, but able to determine if it’s been done.
PREMIUM TIMES: You were claiming that even the ship they claimed to have used for dredging was, perhaps, somewhere else at that material time. When you put that to them, what was their explanation to you?
Ms Usman: Well interestingly, it’s subjudice so I think I would not want to speak of that because we are in court with them on those issues. But all our records from Calabar Port indicated and provided those evidences, so we tendered those evidences in court, which question the fact that at what point did this vessel come because the duration it was required to do that dredging work it could not have done it because certain instances it never came to the port. In an instance it came and left within… like I said, it’ s subjudice, I wouldn’t want to discuss that.
PREMIUM TIMES: In a related matter, you have this system in NPA where you form joint ventures with people and then you give them a long-term contract maybe ten years and then you renew, effectively shutting out to other players from competing for those contracts. Whereas NPA does not even receive substantial revenue from that joint venture. You seem to have continued with the same system, why is that the case?
Ms Usman: We have articulated all the concerns, the observation had to do with if it is a joint venture company, are we making money from the joint venture? What is the basis of the sustained relationship vis-a-vis value for money? So, we have made the presentation through the board of JV that NPA would like to terminate. I have initiated the process of exiting the joint venture relationship, to institute a management contract. It was a formal submission to the board of JV from NPA to the extent that we want to exit the joint venture. The technical partners have made the submission articulating their observation on the issues that we raised.
One of the things that they have raised is the fact that JVs will be expiring within a year and half and the process of exiting and terminating the JVs will take a year and a half, so they would like for us to conclude the period…
PREMIUM TIMES: All the JVs?
Ms Usman: We have two JVs
PREMIUM TIMES: But you also have JVs for like maintenance, cleaning and all of that, did you not have such JVs?
Ms. Usman: No, we don’t have that JVs. What it is, is that it is a subsidiary company of ours that does…
PREMIUM TIMES: Why are you into cleaning? Why are you into all those kinds of cleaning? Why are you into forming subsidiary companies? Your core business is clear, so if you are forming subsidiary companies to go into areas that other players should venture into, that should be a concern. It seems to me that NPA has formed the habit of circumventing the Public Procurement Act, do you agree?
Ms Usman: Just to take you off the issue of our core business. All ports make money outside of their core business. Just to give you an example of the New York Port, eighty per cent of their revenue does not come from port operations, they do real estate, they have a huge investment outside of their core objectives. So, indeed ports around the world do embark on investments that are outside of their mandate. With that in mind, Nigeria Port Authority now has a subsidiary that does property development. In doing property development, we included facility management as part of property development, meaning that this property development company would provide cleaning services in port locations of common user area.
Just as you have mentioned, that is our concern. I have presented to the board that this should no longer be involved in doing that service. It should be opened for competition and to the extent that you are able to compete favorably with other facilities managers, then you will need to comply.
But in order for us to do our segment, we need the facility manager work into lots, so we needed to do an assessment of all the facility management work that is being done and put them into lot that are of similar work and advertise them.
So, we hired a consultant and just last week submitted the report which launched into large lot which will be advertised.
We have put in place the process which will exit that. I strongly believe that property development, yes, facility management, possibly no. But to the extent that even if you would do facility in a competitive environment, so that you are competing with other facilities managers and if you are able to compete favorably, then you can have the work. But even if that conflict to Public Procurement Act, then NPA should not compete in facility management because what is important is for a job to be done and be done professionally without limiting the threshold to within what you can approve at NPA. So that is what I inherited.
PREMIUM TIMES: Even if NPA’s subsidiary is competing for contract NPA is awarding, of course, there will still be some conflict of interest, because, of course, they may have access to insider information.
Ms Usman: Which is why I said, I think a provision within the Public Procurement Act which limits such… For example, a subsidiary company to compete in a tender that that company’s parent company is issuing. So, you know we will clarify from the Public Procurement Act if that is in it, then NPA would not compete. But importantly, you know, you giving yourself an award without a competitive process is completely unacceptable. So, I have commenced the process of exiting that and they have submitted the document.
PREMIUM TIMES: The Public Procurement Act is old; 2004 or thereabouts. What do you think was the thinking by your predecessor in setting up these JVs and subsidiaries?
Ms. Usman: I think they were coming from the period of being an operational port whereby they were doing everything. Then there was a concession, the concession took away the terminals they were operating.
So, the Nigerian port now sought to keep some items or some activities. It is just like when you have children and some of them have grown, so you hold on to the younger ones. So I remember saying that at the point of where you might have entered into this JVs, you might have felt that was the right thing to do, because we were coming from an era of doing everything in a hundred per cent to the time when you have left all the terminals. So I will say ten years after that, even those JVs that you have instituted, now is the time to also let them go. At the point where it might have been challenging for Nigeria Port to completely handle private management. For example, the dredging in totality, which was why they might have bought into the JVs. But nevertheless, it is ten years after that, so it is important that journey for you to re-access where you were ten years ago to see that yes, ok this might be a time to let this service go to a hundred per cent in some management contracts.
One of the things that were raised in NPA’s involvement in sustaining a JV is that if you have a management contract, you will not have direct oversight control over the dredging work that needs to be done. Just to give you an example, we have the fertilizer project that is being spearheaded through the National Sovereign Investment Agency, so they require for us to sweep and dredge certain locations in Onne. So, if you are on the management contract, it will be difficult for you to ask them to dredge their location.
Another instance is the Ijegun area that I mentioned that NPA want to expand into that, so if it is a management contract, it is difficult for you to expand into that allocation.
Recently, we got a request from MRS, when they had a new jetty type that will facilitate bigger vessels. So at that time, we were able to say, let this make economy sense because this is the trend and we ask that the joint venture company will now get to the level, dredges to that draft.
On that management contract, NPA is now limited to what that contract stipulates. So, you will not be able to have any immediate intervention involvement in the operations. It is also to do with, I will say now we have the FPSO coming, the huge Egina FPSO that has come, so there is a need for specialised navigational aid that we need to put in. So we have not factored that. For example, if you are doing a 5-year management contract, we did not have the Egina project you are aware of, so when the Egina project came with the type of navigational aid that is required, we now factored through the JVs to say, we must now procure this type of specialized navigational aid to facilitate the entry of Egina. So, these are some of the advantages to you being a shareholder in the company.
There are other attendant disadvantages, just to tell you that they usually declare a profit of N250 million. But, this year they declared N1.3 billion. So it’s really the first time they will declare such dividend in this magnitude. So it’s an indication that when you are very clear to them that this dividend are not good enough, how are you charging them and also reducing some of the naira and dollar inflows and outflows, you would be able to have, I would say, a better revenue stream. So, we are moving from a N250 million dividend to a N1.3 billion dividend. But I would give you the exact number so you can see.
PREMIUM TIMES: Even though there are people who will argue that that N1.3 billion is still paltry. Maybe if the job is competitive you will pay less.
Ms Usman: Okay, but you see, it is difficult to do competitive dredging year in year out. So it has to be long-term. So you do a long term. What I sought to do is you do long term block of a management contract which would be like a 5-year or 10-year management contract. So even that is a one off, you will not be competing every other year, it is a one time competition
PREMIUM TIMES: But the point is that you can negotiate. You hardly negotiate with your JVs, they send you invoices.
Ms Usman: Yes, the JV is for a 10-year period, the same way the management contract will be a 10-year contract. So the difference between it would be that you have the survey data, the dredging volumes that you intend to do for the year that is given to the management contractor fully to implement. So, with a joint venture company, you give the dredging volume that you need to do and then you will discuss these are the areas you want and this is how you want it done. One of the important aspects we sought to take control of is the audit. When you have the audit being done by the JV institutes a challenge. So taking the audit out of the JV where NPA will pay the audit and owns the audit, that will bring about the conflict that you see. How will I being audited pay for the audit? It has to be external. So that is what we are taking out of the…
PREMIUM TIMES: In fact, that was going to be my last question. It’s so ridiculous. How do you allow a vendor to audit itself and then based on that audit, you get invoice and then you pay? How did that kind of arrangement come about?
Ms Usman: One of the things I have realised also, in checking all the documents as we were removing the audit from them, is that all the audit domiciled with NPA, when NPA refuses to pay their invoices. I think we have to be responsible in government to ensure people’s invoices are paid. Sometimes the payment of invoices determines the contractual relationship. Nobody wants to be tied to the government because the government refuses to pay you unless you induce the officers. So, as a result, they would rather go and be paid by the JV because every time the invoice comes to the NPA, the personnel sit on the invoice and refuse to pay.
PREMIUM TIMES: Why do they sit on invoice?
Ms Usman: In our board meeting, the Bonny Channel Management and Lagos Channel Management made an official submission that this is the first time since they have been operating with the NPA that their invoices were promptly paid; they have never had that before.
PREMIUM TIMES: But why will people paid to process their invoices sit on them?
Ms Usman: I think the people will be called to answer that, considering that a company has been sanctioned for giving them that inducement and the company had indicated that that is the reason. These people should be called to explain why. So, when they formally made the submission at the board meeting that this is the first time their invoices were treated, approved and paid on time without any inducement, I also noted that it is a two-way thing. Third party contractors would want to create a legal relationship that moves them away from payment by government because government will not pay, will sit on your payment. There are some procedural things we need to improve upon, even our procedures are cumbersome. So, beyond our procedures are cumbersome, some officers requesting for inducement, some officers are just incompetent. So over all, we need to improve on our procedure to make sure that payments are made, this is operationally also so nobody sits on anybody’s payment.
PREMIUM TIMES: What have you done to ensure that even under you, your staff are not sitting on invoices.
Ms Usman: As I always say, I turn around my things within 24 hours. Any payments that are not made, I actually go to the finance department to ask them where are your documents? Why have you not paid these people? We are also doing a review of our procedures completely. We are engaging the Deloitte and a group of technical consultants to work on our procedures so that we can eliminate some of these processes that are not necessary to fast-track payment. Because indeed, while third party contractors have their own issues, we also need to look into what it is that is making them run away from anything that has to do with payment collection from us. I can even move to, for example now, this issue you mentioned can be discussed within the context of the TSA with Intels. One of the things they have said is that when the money go to the government, government will take a long time to pay them..So they would rather owe government money and give government what is due them than for the money to go to government and wait and collect it. So just to continue on Intels, cause when they have raised those concerns I noted it and I said yes our procedures and proceedings need to be improved upon, but we are willing to even give you interest on delayed payment, so if we do not pay you within seven days of submission of the invoice to Central Bank, you can start charging us interest on delayed payment.
This is in recognition of our bureaucratic procedures. This is in recognition of the fact that our payment procedures are cumbersome. So, if you know we now say this delay of payment attracts an interest, so officers know that if you are responsible for that delay, NPA is getting to pay this amount, so everybody needs to work. But of course, Intels declined that offer.
PREMIUM TIMES: The issue of Intels was on for several weeks and you were able to hold your ground. There was a part where they claimed that they paid the $18 million but they said they haven’t made some other payments later and everything comes to $42.6 million. But the question is how were you able to manage the entire situation? Intels is a huge company, a lot of pressure would have come from various sources on you to, I mean mellow down a on your stance with Intels. I mean how did you manage the pressure? How did you cope with that to have even forced a huge company like the Intels to apologise?
Ms Usman: Well I think it is having the support of the highest position of leadership. We have all the necessary support from the Presidency in ensuring that this compliance is done. So, I would say NPA just stood its ground. It was legally evident that Intels should not collect that money and we just maintained our position. I would say that private companies tend not to understand that your role as regulator and asking people to comply is really something that government should do, and government needs to do. So, I would say that we just weathered the storm and we just remained resolute on the fact that no entity is above the law. So even the seeming politicisation of the request for Intels compliance was not able to hold water, because as it was evident that Intels had been actually using politics to not comply. So, they are the ones that have always had a political leg to everything they do and a political leg to their non-compliance.
PREMIUM TIMES: There was a time the House of Representatives tried to compel you to back down. Apart from that and we heard that the ministry (Ministry of Transportation) was also asking you to reconsider your stance. How did you resist all of those pressure?
Ms Usman: I would say I asked for, can you give me a legal basis which says I will not do this? This is my job, this is the clear position of the law on this, so through which method would Intels not comply? And for every time I am asked to do that, I actually replied in writing and detail what the relationship is and how Intels is not complying and urge the party to respond and indicate how it wants Intels to not comply. So, I think people should, head of agencies should, be very firm and strong and be resolute in their duties, because if you maintain what you know is the right thing to do, if you know what you are doing is in line with the law, it is difficult for anybody to force you to a certain extent. The president has been very supportive of this and he has ensured that the Nigerian port is allowed to do its work unhindered by any influence.
You mentioned the National Assembly, they had asked us to suspend it, we did no such thing. We proceeded to what has been done in terms of notice of termination. So, they recently invited us for public hearing last week to present why we terminated Intels. Interestingly, Intels did not come for the public hearing and we made our submission. So I would say the committee itself, having been availed with the details of what transpired, was actually, you know, I would say, taken aback and they kept saying Intels had made this case and today Intels has refused to turn up. I think the whole thing is now overtaken by events, Intels has apologised, Intels has complied. so Intels probably really just wants the public hearing to just disappear but because they have put their legs out there before they need to.
PREMIUM TIMES: So, the House, did they feel like they had eggs on their faces? They said you should rescind this but Intels has apologised.
Ms Usman: I hope they do. I hope they understand, if you come out to support illegality and the person that have been doing the illegality now comes back to say that yes, I apologise. Am sure you must feel some sense of remorse, on your part, you must feel to some certain extent.
PREMIUM TIMES: Because even proceeding with a public hearing with all that had happened, apology, payment, settlement and most of those are on the pages of the newspapers. Perhaps money had been voted for that particular public hearing and it must hold whatever the situation.
Ms Usman: On our part, we were invited, and we went with the relevant documentation and we made the presentation as required of us.
PREMIUM TIMES: Did you help in funding the public hearing?
Ms Usman: No, we don’t fund public hearings.
PREMIUM TIMES: But from time to time when there is need for public hearings they ask agencies to…
Ms Usman: But they have never asked me.
PREMIUM TIMES: You are lucky.
Ms Usman: Yes, I have never been asked to fund a public hearing.
PREMIUM TIMES: NPA gave Intels two weeks ultimatum to pay certain amounts, they made some which have been confirmed but we are still about confirming some others, which they claimed they have paid. What if it turns out they have not made the second batch of the payment, what would be the next course of action by the NPA?
Ms Usman: You see, we have issued a notice of termination, we have written to the Attorney-General to say that Intels has complied and apologise so we would want to withdraw the notice of termination. So, to the extent that they are not paying our balance, then the withdrawal of notice of termination will not be done. One of the things that we are working on is pre-SOP. Pre-our intervention, Intels gives the NPA an amount it determines every month as how much will come to NPA from that revenue. So, there is a revenue that is being collected, Intels takes 28 percent as its management fee and the balance of 72 percent is shared between NPA and Intels for amortisation of … But historically, there is no sharing formula. Intels was giving $3.75million, after a while every month it’s $4 million. But the last agreement they wrote the NPA was they would be paying $4 million every month, but they did not pay that $4 million from November 2016 to November 2017 which amounted to $48million. So, what we sought to do is that instead of having that in capped figure, we decided to have a sharing formula. So on the 72 percent, you take 70 percent for amortisation, NPA takes 30 percent. We felt the need to make it a percentage to the extent that we have an increase in oil and gas trades, so it means that we will have more revenue. So if you peg it at $4 million and there is more revenue then, how do we now benefit from this increase? That is why we felt the need to…
PREMIUM TIMES: But if there is less revenue, you also get less than stated.
Ms Usman: Yes, we also get less than $4 million dollars. But then, even that $4 million dollars was at their discretion. It wasn’t part of the original agreement, it wasn’t part of any documentation. So $2 million, its however they want so we want.
PREMIUM TIMES: What kind of agreement is that?
Ms Usman: Yes, they actually said that it was a gentleman’s agreement at a public hearing and I said to them you cannot have a gentleman’s agreement with the monies of government. It is not your decision. There is nothing personal about it, you cannot have discussions of millions of dollars of government resources and you say that it is between you…
PREMIUM TIMES: So, you mean government did a gentleman’s agreement on revenue sharing with Intels
Ms Usman: Yes. It was not part of the agreement how the revenue would be shared post the deduction of the 28 per cent, post the deduction of the amortisation. It was we give you $3 million, then after a year or two they say we would give you an amount of money. We want it to be part of the agreement so there is no ambiguity I will say. No one decides what to give. So just to take you there. Now, post this termination, so we fought for it to be a sharing formula. So Intels now wants to use that sharing formula to compute what they owe us. So, instead of the $4 million per month, now they want it to be the 70:30. They round the numbers into amount to $32 million dollars as opposed to 48million dollars for the period. So that is why we are trying to make a payment which would reflect the 70:30 sharing formula of the historic indebtedness. I have said to them that this 70:30 sharing formula is applicable from when we complied to TSA going forward. It is not applicable to the historic indebtedness. That is why they are trying to pay what they have computed as 30 per cent of that revenue and we have told them that it is $4million/ $48million, so that is the amount of money you need to pay. It is also money that Nigeria Port Authority needs to pay Intels for the Onne 4B project. In the course of implementing the project, there was a huge indebtedness to about $600 million, I am not too sure of the exact numbers, which NPA needs to pay them and we have said that well, we will pay you from this revenue stream.
So ab initio, the project we started it with the concept that payment will be made from this revenue, so this is the payment that will be made from the revenue stream even if it is going to take years. Because one, I questioned the basis on which the Onne 4B project was started. Because, have we fully utilised the terminal that you have? What is the capacity utilisation of Onne to determine why you need 4B? Because you need to have a fully utilised port so the decision to invest I think $2.4 billion dollars into Onne 4B was flawed from the beginning. And then you have now entered into an agreement whereby Nigeria Port pays for the cost of funds, pay so the whole Onne 4B project itself was wrongly conceptualised. So, we suspended the project, it is about 24 per cent completion. We asked them to put that 24 per cent into commercial use and we can now determine if we ever go back to doing it. But just to say indeed that project itself, the government of Nigeria has no business going to build a port when the one you have is not at full capacity.
PREMIUM TIMES: So, you were paying for cost of funding?
Ms Usman: Yes.
PREMIUM TIMES: That is strange. It means if they borrow money to execute the job, the interest or whatever that accrue to them on borrowing, you then pay.
Ms Usman: Yes. We questioned them that why would we pay for that? And NPA was not even privy to… how do you pay for cost of loan when you don’t have the details, how do you pay for a thing when you don’t know the interest or what basis they arrived at those interest rate? We are not privy to the, I always say to them, if Ministry of Works issues a contract to JV, what is the business of Ministry of Works with Guaranty Trust that lend the money to them? We have no business for you to pay for cost of fund. As a result, there is a huge amount of indebtedness accrued over the period.
PREMIUM TIMES: The Lekki Deep Sea Port. In 2007, the International Container Terminal Services abandoned the project. They claimed that the NPA and the Lagos State government who are partners in the deep-sea port were delaying, that there was unnecessary delay in the project taking off. Since they left, the work was supposed to have at least the container terminal part of the port completed in 2016. That did not happen. As we are talking now, we don’t even know, since they left if another company has been awarded the contract to build the terminal? The turn-around group suddenly announced that they had funding from the international development organisations but as the tour leaves January, it now became obvious that all the international development organisations have practically backed out. So there was no financial closure on the deal. What is the problem with the port?
Ms Usman: Well, Lekki Deep Sea Port, there is no problem now, and they are doing turn around, they have started. But you know, the construction of the breakwaters. Just to say that NPA, we have 20 per cent shareholding in the port. And I felt that we should not have more than five per cent. Our shareholding should be a comfort shareholding that should not be more than five percent. So we reduced our shareholding from 20 per cent to five per cent and we fully paid for our five per cent. We do not think that the Nigerian government should invest millions of dollars into, I think our share, the value was about $106 million dollars or so, and we have paid about $24 million dollars fully for our five per cent fully and in terms of priority, I do not believe that Nigeria government’s priority is investment in port development. It is private sector driven, government should be regulating, we should have a comfort shareholding. They resisted that for quite a long time. I had quite a battle in getting that but I remained firm on it. There was a submission by Lekki Deep Sea Port Tolaram Group that it would discourage investors and I frown on investments and I find it laughable. Because any international investor seeks to have minimal government shareholding. Nobody likes investing in companies where government has more share. So, for you Tolaram Group to say that Nigerian government reduction in shares will discourage investors, is a joke. Because it is as if you want to build the port with government money. So if you have federal government of Nigeria through NPA 20 per cent, Lagos State government 18.9 per cent, Federal Government of Nigeria through the Viva Methanol project has another 20 per cent in Tolaram Group shareholding. So, if you sum it up, government – federal and state would have over 60 percent. I think its 20:20:18. So I felt that one, we would reduce our shareholding, two that federal government shareholding in Tolaram Group, that Viva Methanol grant should not be a grant, our contribution should be recognised.
PREMIUM TIMES: Why was there a grant?
Ms. Usman: I questioned that. In fact, I wrote to the Ministry of Finance to question that investment in Lekki Deep Sea Port that they had said that the shareholding would take effect after five years of commercial operation of the port and would be sold at a public offering. So, I did a memo to question the basis.
PREMIUM TIMES: Government invests this money in a project, but it will not take effect, that investment will not be recognised until five years after commercial operation.
Ms. Usman: Yes. And that commercial operation was from a failed project of Viva Methanol with the Tolaram Group I think during Obasanjo’s regime. So there were monies the government gave to Tolaram Group for Viva Methanol Project, the project never saw the light of day; then we transfer those obligations to Lekki Deep Sea Port. But I felt that money should be recognised like right now as government shares. And the issue of you saying you are going to give public offering of a port, I questioned that because how many ports are listed in the stock exchange? But just as a background, currently they have written to us that they are having an AGM, we have nominated our board representative, Lagos State Government has nominated the chair of the board of Lekki, they have commenced the construction of breakwaters, China Harbour has come in to take shareholdings within the structure. So, the financial closure has been extended to one year. So, I can give you the date but I am not sure when the financial closure of the deep sea project.
PREMIUM TIMES: While the president was away last year, the vice president issued some executive orders including that the Apapa port should commence 24 hours service. Where are we on that?
Ms. Usman: We commenced 24 hours operations, Nigerian Ports and the terminal operations are providing a 24 hours service for all our services. What is challenging is that the customers don’t come to clear their goods for 24 hours. We have made clear the challenges they have with the 24 hours operations, the concern about security, state of the roads will not permit them to come access the port outside of the official working hours. I have made a request to the vice president that maybe the government should consider giving concessionary rates for off-peak that will encourage people to come and clear their goods and utilise the service off-peak. Other agencies of government have been mandated to operate 24 hours. They had started coming for 24 hours but the attendant lack of patronage has now discouraged other agencies of government from providing the services. Because they are there for 24 hours and nobody comes to clear it. I think on the one hand, addressing the issue of security and access to roads, on the other hand also consider having concessionary charges for off-peak periods.
PREMIUM TIMES: We are told you have just one scanner that breaks down every time. And some agencies also have refused to vacate the port because there were some agencies that actually should vacate. So, when you have just one scanner, let’s assume that people show up, how do you handle clearing of cargoes?
Ms. Usman: The Nigerian Customs is responsible for providing these scanners. The scanners have broken down, Nigerian Customs is in the process of working with NPA on procuring. So, they have been doing 100 per cent physical examination on all the cargoes. So even that 100 per cent physical examination, if we can do it faster we can start at 9 a.m., if all government officials can work till 5 a.m. If they can work on weekends and off-peak hours, that would help, even the physical examination will be enhanced. So, a lot of time we position the container for examination, our government officials don’t turn up on time, they turn up at 11 -12, they examine a few, so that hinders it. Of course, you cannot even compare physical examination with scanning. So the spoilt scanners is an emergency that needs to be done. We need to get our acts right in making sure that all the port locations have all the necessary equipment.
PREMIUM TIMES: You are a Bring Back Our Girls activist, I don’t know if you are still a Bring Back Our Girls activist. Since 2014 like the rest of us, there have been campaigns for the return of the girls that were abducted from Chibok but we suffered a huge setback recently where over 100 girls were abducted from their school in Yobe, what do you think of that?
Ms Usman: Just as you say, it is a huge setback. You know, we have seen girls being returned, girls being rescued, and attendant reduction in the activities of Boko Haram. But this abduction has set us back and there are things that we need to ask. There are questions that need to be answered. For example, how can you have a boarding, lets not even say that it is a girls’ school, how do you have a school not been protected as it should? Even if it is a day school. How do you have a boarding school, girls boarding school not being protected as it should? So, there are many questions that we need to ask. Having experienced what we did with the Chibok girls, we cannot now have a similar situation existing in the same environment -the school is not secured, no military deployed in that situation, I think a committee has been set up so we look forward to what it is they are going to tell us.
In addition, I will say that the response. One of the issues around Chibok girls and the abduction in 2014/15 is to do with the seeming denial of the government of accepting that an abduction has happened. Seeming denial of the extent of the insurgency. So to the extent that now you see there is recognition and acceptance that yes people were abducted, recognition and acceptance that yes, we need to work on rescuing these girls, work on the abduction status and also investigate how it could happen, having claimed that we have made significant milestone in achieving reduction in insurgency. I would say this is a huge step back and it questions quite a lot of things that we should have put in place to prevent a re-occurrence. You cannot have our schools unprotected. You cannot have boarding schools unprotected in the northeast as these are soft targets.
PREMIUM TIMES: Thank you very much.
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