NPA: Nigeria’ll Save $326.89m from Agreement with INTELS
*Says private firm waived $193m debt
*Discloses huge revenue lost to NPA’s handling of pilotage
*Praises Oyetola for ‘putting Nigeria first’
*Atiku insists divestment in company not reversed
*Declares new directive won’t benefit him
Nigerian Ports Authority (NPA) has disclosed that the country would save a whopping $326.8 million, roughly N227.86 billion, from the agreement it reached with INTELS Nigeria Limited on the contentious pilotage contract.
On the whole, NPA said the federal government would further earn benefits to the tune of over $500 million. It said this was taking into consideration the interest waiver of $193,317,556 and reduction in interest rate on the outstanding debt from six-month London Interbank Offer Rate (LIBOR) + 6.5 percent to six months Secured Overnight Financing Rate (SOFR) + 3 percent.
NPA stated that the benefits also involved the spread of the repayment of the debt over 15 years, with the first two years being interest-free, and the reduction in commission from 28 percent to 24.5 percent.
It praised the Minister of Marine and Blue Economy, Adegboyega Oyetola, for working tirelessly to ensure that the INTELS issue was resolved and, by so doing, putting Nigeria first.
But former Vice President Atiku Abubakar denied any benefits from the alleged restoration of INTELS’ contracts with NPA, which were cancelled by the Muhammadu Buhari administration, saying his divestment in the company has yet to be reversed.
Atiku, who was the Peoples Democratic Party (PDP) presidential candidate in the 2023 general election, described insinuations that he was a beneficiary of the contract restoration as untrue.
In a statement titled, “Setting the Record Straight in Respect of Service Boat Monitoring Operation in Nigerian Ports Authority: Reinstatement of INTELS Nigeria Limited as Management Agent,” NPA decried the misinterpretation in a section of the media (not THISDAY), citing a letter issued by the Port Manager, Lagos Port Complex, Apapa, and addressed to Shipping Companies on the matter.
NPA stated, “It has become necessary to put the record straight for the benefit of the public and the generality of stakeholders in the port industry. This is also to avoid distortions and conjectures, which may arise by reason of wrong interpretation of the aforementioned letter. “
Giving a breakdown of the agreement, NPA said it agreed to a waiver of $100 million, being part of the accrued interest as at July 31, 2023 on the indebtedness to Deep Offshore Services Limited under the Phase 4B agreement.
It added that there had been a further waiver of the interest accruing on the outstanding debt under the Phase 4B agreement for the period of two years commencing from July 1, 2023 and ending on July 30, 2025, which was estimated to be $93,317,556.
NPA said, “(There is ) a reduction of the interest rate on the indebtedness to Deep Offshore Services Limited from six-months LIBOR rate + 6.5% to 6-months SOFR rate + 3% effective from the date of execution of supplemental agreement.
“The Authority will be saving a total sum of $ 326,895,226 as a result of waiver of part of accrued interest and reduction of interest rate from 6.5 percent to 3 percent on the debt over the next 15 years.
“(There’s another) reduction of the agency’s commission on pilotage collections from 28 per cent to a lower commission of 24.5 percent as opposed to increasing it due to astronomical rise in cost of operations.
“The proposed spread of the debt of $522,433,453.25 to be paid back over a 15-year period will, of itself, earn for the Authority a huge benefit in terms of preservation of funds to meet its other operational needs over the period. “
NPA said the above facts represented the true position on the matter, adding, “The interest of the authority is to ensure that services are provided in line with international best practices and to enhance the revenue profile of the federal government.”
In order to mitigate the attendant loss of revenue and surmount the legal impasse created by the dispute, the authority proposed a settlement initiative with INTELS, which was submitted to the federal government through the Ministry of Transportation.
The statement said, “INTELS also made proposal for settlement on behalf of itself and Deep Offshore Services Nigeria Limited. Protracted negotiations followed and the parties eventually reached a settlement following remarkable concessions by INTELS/Deep Offshore and verifiable gains by NPA/the federal government.”
It added, “The parties agreed to the following proposed Terms of Settlement: waiver of the sum of $100,000,000.00 on the outstanding indebtedness of the authority to Deep Offshore Services Limited, a further waiver of interest which may accrue on the outstanding debt to Deep Offshore Services Limited over a period of two years between 1st of July, 2023 to 30th June, 2025, which is estimated in the sum of $93,317,556.
“Reduction of interest rate on the outstanding indebtedness to Deep Offshore Services Limited from Libor+6.5 percent to SOFR+3 percent, reduction of the agency commission on Service Boat Pilotage collections from 28 percent to 24.5 percent. The agreement to be renewed for a further period of 15.”
NPA maintained that the federal government considered the proposal and approved same on August 18, 2023.
It stated, “The federal government further directed that the withdrawal of the cases was to be carried out by filing Terms of Settlement by the parties and for the court to adopt same as Judgement of the Court. The authority was also to discontinue the un-concluded procurement process, which process was in dis-obedience to the Orders of the Federal High Court, Lagos.
“The Parties executed Terms of Settlement on the 24th of August, 2023, and same was adopted as the Judgement of the Federal High Court in Suit No. FHC/L/CS/1058/2020 on the 21st of September, 2023 by Honourable Justice A.M. Liman. Arising from the foregoing, the authority also filed a Notice of Withdrawal at the Court of Appeal, Lagos, in respect of the appeal at the Court of Appeal, Lagos.
“Following the Judgment of the Federal High Court, Lagos, the Nigerian Ports Authority and INTELS Nigeria Limited executed the managing agency agreement, while a Supplemental Agreement with Deep Offshore Services Limited for the Phase 4B Port Development was also executed in view of the fact that the initial Agreement was suspended.”
NPA further disclosed that the federal government lost enormous revenue in the period it took over the management of pilotage.
It said, “After the expiration of the Service Boat Management Agreement, the Authority took over the performance of the service through various Departments and Divisions.
“However, due to the constraint of not having the requisite technology to monitor the operations, the expected revenue dwindled and it resulted in the drastic reduction of revenue generation for the Authority.
“An analysis of its impact on the authority’s revenue showed a sharp decline from $216 million and $209 million in 2014 and 2015 respectively under INTELS agency to $130 million and $99 million in 2020 and 2021, respectively, after take over by NPA. The situation in 2023 is even worse as the collection up to June 2023 was only $55.3 million.”
NPA insisted that the agreement reached with INTELS was done in the national interest, adding that revenue generation would increase as a result of the effort.
While praising Oyetola for working diligently to ensure that the crisis was resolved, NPA said the minister was disheartened by the needless loss of revenue as a result of the impasse, adding that he showed concern and patriotism in resolving the dispute.
While admitting that errors were made by the past management of NPA, the authority stated that prior to the expiration of the Service Boat Monitoring Agreement, it commenced the procurement process for the engagement of service boat operations monitoring agents.
NPA stated, “Several companies submitted bids and the Parastatal Tenders Board of the authority considered the proposals and approved to forward the four companies considered qualified for the next stage of the process to the Ministerial Tenders Board for further procurement processes in line with the requirement of the Public Procurement Act.
“The four companies are: Pacific Silverline Limited, Nexttee Oil and Gas Trading Company Nigeria Limited, ICA Logistics Limited and Ishasha Investments Limited.
“Shortly after the opening of the bids, INTELS Nigeria Limited and Deep Offshore Services Limited instituted a suit no FHC/CS/L/1058/2020 at the Federal High Court, Lagos against the Authority seeking orders of the Court to restrain the authority from engaging new Service Providers to carry out the monitoring of Service Boat Operations in the Exclusive Economic Zone.
“INTELS further claimed that the authority was in breach of the management agreement and sought reliefs including that the contractual status quo remains. Deep Offshore claimed that the termination of the Managing Agency Agreement will negatively affect process of recovery of the Project cost from the Authority.
“The Federal High Court, Lagos per Justice Oweibo by an Order of Interim Injunction dated 24th July, 2020 restrained the authority from giving effect to the Public Notice calling for Expression of Interest for the provision of the Service Boat Operation from interested entities in line with the Procurement Act.”
The statement stressed that NPA notified INTELS Nigeria Limited vide its letter dated August 5, 2020 of the expiration of the Service Boat Management Agreement on August 8, 2020 and of its intention to take over the provision of the said Service Boat Operation.
It said a public notice was equally issued to all Service Boat Operators requesting them to deal with the various port management on all Service Boat issues.
NPA added that the orders of the Federal High Court should have effectively stalled the procurement process, adding that despite the orders of the court, the authority continued with the procurement process and forwarded the names of the companies to the Federal Ministry of Transportation.
“The procurement process was subsequently put on hold based on the advice from the Federal Ministry of Transportation that the authority should comply with the orders of court,” the statement said.
The authority said it was thereafter sued by the four firms seeking declarative reliefs and an injunction restraining the Authority from awarding the contract in the four pilotage districts.
It said, “In order to mitigate the attendant loss of revenue and surmount the legal impasse created by the dispute, the authority proposed a settlement initiative with INTELS which was submitted to the federal government through the Ministry of Transportation.
“INTELS also made proposal for settlement on behalf of itself and Deep Offshore Services Nigeria Limited. Protracted negotiations followed and the parties eventually reached a settlement following remarkable concessions by INTELS/Deep Offshore and verifiable gains by NPA/the federal government.”
Atiku Denies Reversal of Reinvestment in Company
Former Vice President Atiku Abubakar denied alleged restoration of INTELS’ Nigerian Port Authority (NPA) contracts that were cancelled by the Muhammadu Buhari administration, saying even his divestment in the company has yet to be reversed.
The PDP presidential candidate in the 2023 general election described the reported contract restoration as untrue, and added that the new directive would not also benefit him
Reacting through his X account, Atiku said, “In January of 2021, I made public the sale of a major chunk of my shares in the Integrated Logistics Services Nigeria Limited (Intels) to Orlean Investment Group, the parent company of Intels.
“The phased sale of those shares that commenced in 2018 reached its peak in December of 2020. Intels also made public my exit from the oil and gas logistics company, meaning that those shares I sold are now owned by a different entity.
“My divestment from the company that I co-founded has not been reversed. Consequently, I cannot by any stretch of imagination be a beneficiary of the reinstatement of the pilotage monitoring business that was taken away from Intels by the federal government.
“Therefore, the insinuation that I am a beneficiary of the decision to rescind the cancellation of the contract between Intels and the federal government is untrue and should be seen for what is: mischief.”
Source: thisdaylive.com
